Why It Is Essential to Plan Your Post-Divorce Budget

Divorce is a profound and challenging life transition that demands significant emotional and financial adjustments. As you navigate this difficult period, taking control of your finances allows you to restructure your economic landscape and move forward with greater confidence.

This is why a comprehensive post-divorce budget is one of the most important steps for your financial future after the legal dissolution of a marriage. A budget provides a clear picture of your new financial reality: 

• It helps you manage support payments and related expenses, 
• It empowers you to make informed decisions about major assets like the family home, 
• And it sets you up to build long-term stability.

The experienced family law attorneys at Robbins & Licavoli can provide the dedicated legal support you need during this time of transition, helping you understand your financial options.

How Are Support Payments Determined in a Divorce?

Support payments, such as child support and spousal support (alimony), can significantly impact your monthly post-divorce budget. Understanding when and how these are assigned is crucial for accurately forecasting your income and expenses.

In Michigan, child support is calculated using a formula that considers both parents’ incomes, parenting time, and other factors. It is common in most divorces involving minor children. Spousal support, on the other hand, is not automatic. A judge evaluates numerous factors before awarding it, including the length of the marriage, each spouse’s earning ability, and each spouse’s age and health. Your budget should include the payment or reception of both of these forms of support, as fitting for your circumstances.

What Happens to the Family Home in a Divorce?

Deciding the future of the family home is another critical financial decision to factor into your post-divorce budget. As it is often the largest asset, couples must decide whether to sell the house and divide the proceeds, have one spouse buy out the other, or continue to co-own it. Each option carries different financial implications:

• Selling the home provides immediate cash but means you must find new housing.
• A buyout could strain your finances if you are the one buying, or provide a lump sum if you are being bought out.
• Co-ownership can reduce the financial burden, but it may not be feasible depending on your relationship with your ex-spouse.

An accurate budget will help you determine which path is most viable for your future financial situation.

What Are Unique Budgeting Needs for a Divorce After a Long-Term Marriage?

A divorce after a long-term marriage often presents financial challenges that require careful budgeting. Individuals may be closer to retirement with less time to rebuild savings, and the division of retirement accounts and pensions can become more complex. Furthermore, a spouse who has been out of the workforce for an extended period may face difficulties re-entering it. Creating a detailed post-divorce budget in advance is crucial in these cases for assessing your current financial standing and planning for a secure retirement on a single income.

Plan Ahead Now for Your Financial Future After Divorce

Strategic financial planning is essential to navigating life after divorce. By creating a detailed, accurate post-divorce budget, you can gain control over your finances and build a stable foundation for your new life.

The dedicated attorneys at Robbins & Licavoli are committed to providing the individualized attention your divorce deserves. If you need help with your divorce settlement or post-divorce plans, we will help you understand your options and advocate for the best possible outcome. Contact us today for a consultation to learn how we can assist you.