How to manage your finances during divorce proceedings

One of the major reasons why people don’t initiate divorce proceedings is due to the costs associated with the process. When you consider that getting a divorce not only means losing the income of your spouse, but it can also mean time away from work, increased costs associated with childcare, travel costs, court costs, and other associated costs with a divorce. Your income, in other words, will be taking a hit and your outgo will be increasing- at least temporarily. This is not an easy position to find yourself in and may be a strong motivating factor to remaining in a marriage that is otherwise well suited for a divorce. 

Being able to keep track of your finances during a Texas divorce is among the most important factors associated with finding success in a divorce. However, we at the Law Office of Bryan Fagan want to share with you some helpful information about how to manage your finances during a Texas divorce. We know that it is difficult to stay disciplined enough during a divorce. Many times, people who are going through a  divorce expect an experience of one sort during a divorce only to find that the case is 180 degrees different than he or they would have expected. Rather than being that person who is caught off guard by concerns over finances. The attorneys with the Law Office of Bryan Fagan want you to be ready for a situation that differs from what you had believed that you were signing up for

What are the finances for divorce?

The term “finances” can mean different things to different people. Personal finances, business finances, and case related finances are just a few of the types of finances that may be relevant to your family. However, in the context of a divorce, you need to consider the type of finances that will be the most helpful to you in this format. Here are some helpful pieces of information relevant to personal finances during a divorce

A budget can help you keep track of your money both now and in the future. I have spoken to clients about the idea of doing a budget and the common refrain that I receive is that it is a non-starter at that time. There is so much going on in your life and that of your spouse that you all may rationalize over-spending as a direct consequence of going through a stressful and complicated divorce. With that said you can put your household income and outgo expectations onto a piece of paper to determine how best to allocate the funds that you do have coming in. This is important for many reasons. Here are a few of the most important ones from our perspective. 

Why is it beneficial for you to budget during and after a divorce?

Getting into the habit of creating a budget for yourself can be a tool that you use over and over in the years to come following your divorce. When you are going through a divorce you need to be aware of the challenges that are poised to take on. For example, if you and your spouse both works then there is an immediate challenge that is part of your divorce in that you are losing a chunk of your household income. Depending on the size of the income that you are losing you should be able to determine what parts of your budget are fine to stay in and what items must be removed due to your not being able to afford them. While you may have some doubts about how a budget fits into your life make no mistake that it can be of the utmost help in conjunction with planning your household finances to be able to see in black and white where the money is coming from and what you need to do to keep your head above water for the time being. 

Again, you may be looking at a budget that is not at all promising. It is a helpless feeling to look at that budget and see that your necessary spending items are not going to be covered. We can talk about minimizing costs and other areas of spending all we want but the reality is that most people spend their money on items that are necessary for terms of a household budget. Working people do not spend money on frivolous items. Rather, money can be spent in a variety of ways that are practical and effective within the budget. The budget does not constrain you, but rather the budget permits you to spend the money that you do have. The opposite of having a monthly budget is to sit there at the end of the month and wonder where the money went in that household. 

Rather, what you can do as an experienced budgeter is watch trends on where you are spending money to identify potential areas to save from here to there. The budget tells you where you spend, how you spend, and what you spend your money on. This is extremely useful information for you to consider as you move forward with your life after and during a divorce. We know that divorces are not inexpensive but at the same time, there are ways to understand how much you can afford to pay an attorney. Everyone makes mistakes in budgeting during the first few months. There is no surefire way to budget with complete accuracy. Three or four months into budgeting you should start to notice trends in how you spend money. From there you can identify potential sources of problems for you in the future. While others make money, spend money, and then wonder where the money went at the end of the month you can rest easy knowing that there is documented evidence of how you can prepare for the following month by looking at how you spent money in the prior month. 

In the short term, you may have no idea how much money you have coming out of your home each month. Subscription services are a major cost that can sneak up on you because you simply forget how many subscriptions you have. Some of those subscriptions you may utilize every day. Other times these costs are ones that you never use with any regularity. That is where you can take advantage of what the budget has to offer you. Remove those items from your spending and you will see your tight budget loosen just a tad. Do enough of this and your income starts to look much more competitive and substantial. 

Are you telling your money where to go at the end of each month? Or are you wondering where it went? These are the dual sides of a coin that can be flipped based on the circumstances that you are in. Not knowing where your money is going at the end of the month can be a helpless feeling. Here you are doing everything you can to earn an income for yourself and your children until you find out how the divorce is going to look for your family now and in the future. A budget can be an introduction to post-divorce life and surely can be a way for you to become more in tune with your spending. The time to do this was yesterday, but the second-best time to do it is now. Relying on your spouse for their income is a normal expectation during a marriage. However, once you go through a divorce their income is likely not to go out the window and into their bank account. You need to focus on yourself and your ability to provide a stable income for yourself and also for your children. A budget is one of the clearest cut and most direct ways to live more efficiently.

You would be surprised, I think, to learn just how much having your finances under control can help you when it comes to the organization of the rest of your life. If you think that you already have a good grasp on your family finances, then a budget very likely will turn you into a professional budgeter and spender. Your grasp of household matters and their expenses will allow you to think proactively in your new life rather than simply reacting to all the stimuli around you.

When it comes to a household budget it does not matter the format that you choose to budget. The only thing that matters is your accountability to the process and yourself. If you want to use a computer program to do it then knock yourself out. However, you can get great results by doing the budget on something as simple as a yellow legal pad. Whatever you choose to do with your budget the most important thing to bear in mind is that you cannot see any improvements in your household finances without doing the work to complete the budget in the first place. 

Choose your attorney wisely

One of the areas of a divorce case that many people overlook when it comes to finances is how to pick an attorney that will not present extra costs. Most people choose an attorney based on the cost or the location of their home. These may be important factors to you, as well, but you should also consider some additional factors before deciding on which attorney to hire. 

If you plan on hiring an attorney for your divorce, then there are certainly going to be several options available to you in the Houston metropolitan area. You can throw a stone on any busy street corner and the stone is liable to hit at least one attorney. Because of this competitive marketplace attorneys will do their best to try and help you understand why they are different from their competitors and how hiring them will lead to better results for your case. Only you can determine whether these positions are credible and meaningful to you as you head into a divorce

Having an attorney on your team costs money in most cases. Although, if you find the right lawyer in the right situation, he or she may be willing to represent you in your divorce at no or a very limited cost. Many times, attorneys will do so out of concern for you or your children. Or the attorney may simply decide to take up so many cases per year on a “pro bono” basis and your case just so happened to be one that he or she chose to take up under that designation. It happens that you can find a lawyer who will work with you under these circumstances. You just have to find a lawyer who is willing to do it and then discuss your options with him or her. 

An alternative to this would be to work with an attorney who can represent you based on a limited-scope relationship. Most people going through a divorce are represented by an attorney who takes up their case and represents them throughout the case in all facets. The attorney prepares documents, performs research, prepares for hearings, attends mediation with you, answers phone calls about misunderstandings about the temporary orders and the list goes on and on. 

Some attorneys, our office included, are willing to represent you in other capacities as they pertain to the divorce. For example, if you want an attorney who is just going to attend a trial with you then that can be arranged. A trial is the most important part of a divorce (if you must have one). You can represent yourself up until you reach the trial and then bring in an experienced family law attorney as you head into that final stage of a case. This can save you money up until that point and then allow you to have representation as you close out the case. 

Or, you can have an attorney work with you to review documents presented to you by your spouse. These types of relationships are available if you are willing to discuss them with an attorney and if the attorney is willing to represent you in some atypical and unorthodox arrangements. Note that these arrangements are not standard and not all attorneys are willing or able to meet you in the middle and represent you based on these types of limited-scope relationships. However, our office is an example of a law office that is willing to do so. 

Regardless of the scope of the relationship between you and your attorney, having representation can help you when it comes to decreasing the likelihood that mistakes are made in your case. No, that does not guarantee that you will achieve any particular result in your divorce, but it does mean that the odds of your case suffering due to mistakes being made when it comes to drafting documents incorrectly or missing deadlines will not occur. These occurrences can and will cost you money in your case, so it is wise to reduce the likelihood that they happen. Some clients of our office came to us from situations where they were representing themselves in a divorce and found the process to be more than they could handle o their own. That doesn’t mean the person is not capable. It just means that getting a divorce is like any other process in life. It has rules and procedures to follow and if you are not familiar with those rules and procedures then your case will suffer. 

One of the most important aspects from a financial perspective of having an experienced family law attorney represent you in your divorce is that an attorney can help you to make sure that you are paying the “correct” amount of child support or spousal support during the case. You may be wondering why I put correct in quotation marks. Well, sometimes paying these two things to your spouse in a divorce is unavoidable. There may be fault grounds or circumstances that put you in a spot where you need to make these payments to your spouse- at least temporarily. In that case, it is better that you do so based on a solid reason and your income rather than on the wishes of your spouse alone. 

All in all, there are so many different facets to a divorce where your finances come into play that we could discuss this subject all day and all night without covering them all. With so much at stake in your divorce, it is no wonder that you may feel overwhelmed by where to start. If you are in the information-gathering stage of the process then there is no better source than the attorneys with the Law Office of Bryan Fagan. 

Questions about the material contained in today’s blog post? Contact the Law Office of Bryan Fagan

If you have any questions about the material contained in today’s blog post, please do not hesitate to contact the Law Office of Bryan Fagan. Our licensed family law attorneys offer free-of-charge consultations six days a week in person, over the phone, and via video. These consultations are a great way for you to learn more about the world of Texas family law as the potential impacts on you and your family were a divorce or child custody case to be filed. 

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