One of the least pleasant discoveries a divorced man or woman makes is that he or she has less money than before. In fact, for some divorced people, the end of the marriage signals a new austerity that for some people ends in the poorhouse and bankruptcy.
To avoid these unhappy outcomes, divorced people generally make budgets. For some this is a first-time experience.
Making a budget is not particularly difficult. First, all sources of income should be listed, including alimony and child support.
Second, all expenses should be listed, starting with the fixed or recurring expenses, such as rent or mortgage payments, car payments, utilities, and insurance, then moving on to credit card debt.
After the expenses are listed, comparing income to expenses may reveal a noticeable lack of balance. This is where the pencil work begins. Brown bagging is cheaper than eating out at lunch. That weekend movie night costs more than a DVD rental. Sometimes creditors will work with borrowers. Eliminating unnecessary expenses eventually produces money left over at the end of the month.
Now comes the hard part. Staying on budget requires self discipline.
Budgeting teaches the difference between wanting and needing.Considering wants versus needs may make the difference between bankruptcy and solvency, and economic survival may mean taking a red pencil to everything in the budget except needs. This means priorities shift.
Budgeting teaches life lessons, including that many “goods and services,” as economists term, are really “bads and disservices” and not really necessary at all.