Knowing that you need to file for divorce but not having the financial strength to do so puts you in a vulnerable position. The nature of your situation is one where you may be in a relationship that is not healthy for you and your children. You know that you must begin taking the steps necessary to end the marriage. However, you may also have financial realities that have been holding you back from doing so. Where can you go from here and how should you proceed?
The answer is not to bury your head in the sand and pretend that you do not have to do something about this situation. For many of you pondering divorce, there are going to be tradeoffs in this process. Like with any other sacrifice or difficulty that you go through this is going to be a time where you need to dig deep and find out what you’re made of. It may sound like I’m about to go into a rousing halftime coach’s pep-talk. We won’t be going that far today but the point is that we at the Law Office of Bryan Fagan are here to help you.
In today’s blog post we are going to share with you some ideas regarding how to fund your divorce. These are going to be tips and ideas that can provide you with an immediate benefit. We want you to have as much knowledge as possible so that when it comes time to begin the process you will know how to move forward. Even worse than having to go through a divorce is delaying the inevitable. Putting off a divorce for no other reason than you aren’t set up financially to handle the case is reasonable. Never figuring out how to fix the problem is another matter altogether.
Assessing your finances- where do you begin?
Trying to figure out how to begin a divorce from a financial perspective can be a challenge. There are so many elements to your financial life that if you have never attempted to organize them it will take some time just to get your house in order. This could look like creating a budget, downsizing your expenses, and then determining what your representation options look like. Let’s take that roadmap and start there as far as where we are going to begin our journey towards a divorce.
If you do not know where your money goes each month then you cannot know how much money you can spend on a divorce or even where your finances are overall. A budget does not force you to not spend money. A budget provides you with an honest, unvarnished assessment of your household finances. You cannot lie in the face of a budget. Those numbers come up in black and white and tell you what you need to know about your financial health at this moment. However, if you have never created a household budget before then you need to know how to create one.
The budget for your household does not need to be complex. You can complete a household budget by considering your income first. Your income is all sources of money that come into your house each month. This should include things like child support, long-term disability pay, salaries, commissions, and bonuses. Any money that you have coming into the house consistently should be counted as income. Put this amount of money at the top of the piece of paper.
Underneath that you should begin to calculate the expenses of your household each month. This can range from items like subscriptions for streaming services to major expenses like school tuition. Add all of these up and you will have a good idea of where your money goes each month. It may be that for the first time in your adult life, you have a good idea of where the money is going in your home. For many households, this is the major step in the process of financing a divorce.
You can see now where your household expenses stand and if you can reduce them. Think of it like going on a diet. When you go on a diet that means you are reducing your calorie intake however possible. Cutting out nonessential foods in favor of essential foods is what dieting amounts to. This is what budgeting can do for you. Looking at your household finances to assess the status of your income versus your outgo. It does not have to be any more complicated than this.
Once you have completed the following month’s budget you can better assess your financial strength. In many ways, this is the most optimistic forecast for your household’s finances. Very few people can improve their financial outlooks during a divorce. This not only has to do with increasing expenses but also having your household income reduced. It is more a divorce thing than a lifestyle thing in most cases. However, you do need to be aware of overspending because of your divorce.
Overspending as a coping mechanism
When you are going through a divorce it can be easy to justify spending money on things that you ordinarily would not. Going through a difficult or traumatic event like a divorce tends to cause us to do things that are out of character for us. Spending on things that are out of your price range can happen during the divorce.
This will end up costing you in multiple ways. For one, your temporary orders in a divorce will bar you from spending on non-essential items during the divorce. Is this order violated with some regularity by spouses who are not held accountable? Yes. However, it can cause you pain towards the end of the case when you look up and see that you spent more on your divorce than you otherwise would have due to overspending on impulse buys.
If you need to, find an accountability partner who can help you keep your spending under control. You know who you are. If you have problems with spending money then the reality of the situation is that a divorce is not the time to learn self-control. None of the steps that we are going to talk about today are incredibly difficult from a head knowledge perspective. A wise financial expert once opined that personal finances are only 20% head knowledge but consist of 80% behavior-based steps and learning that must be undertaken.
The credit card- a necessary evil but a hidden way to overspend
Many if not most of us own at least one credit card. These credit cards have become the way that many Americans save for a rainy day. A budget would be the ideal way to save for a rainy day but short of putting in the work to complete a budget, a credit card will have to do. When you have an emergency, it is tempting to use that credit card and ask questions later.
Have you ever wondered why Amazon is so successful? If you think because they sell everything from an app you are getting close. There is relatively zero “friction” when it comes to buying items on Amazon. Compare the situation at Amazon to how it works to buy an item from another online retailer. I am going to guess that there are more hoops to jump through when it comes to buying something on a competitor’s website than on Amazon.
This same principle applies to using a credit card. There is relatively little friction when using a credit card. You pull the card out of your pocket and then the spending starts. What’s more, you don’t use your money to do the spending. You receive a bill at the end of the month which tells you how much money you owe to the credit card company. If this sounds like a recipe for disaster when it comes to spending, you are on to something.
You may want to consider not having a credit card during your divorce. If you can avoid it that may help you to keep your finances in line where you can avoid issues with overspending. We know that there are going to be new expenses that come up during a divorce. One of the best ways to prepare for a divorce is to have a plan on how you are going to spend. Not overspending during the divorce may simply be a matter of not using your credit card.
Minimizing costs associated with your divorce
There are several ways that you can minimize the costs associated with your divorce. As with anything else, it is a matter of tradeoffs when you consider where you can cut costs and try to save money. You will need to make decisions based on the specific circumstances of your family when it comes to where you are going to cut costs.
The longer your divorce case takes the more expensive it will become. Family law attorneys bill by the hour, meaning the more work performed on your case the more you will be billed. Therefore, if you can minimize the length of your divorce then you can effectively reduce the costs of the case, as well.
When you look at a divorce you can more directly attack the issues of your case by negotiating with your spouse. Even if you are not happy with him or her know this is still a better option than going to court to sort out your disputes. The more willing you are to work out these issues with your spouse the better you can control costs.
Figuring out the best way for you to negotiate with your spouse is an important part of the case. In some situations, you and your spouse will be able to work together directly on these issues. This is a key point to understand. Talk to your spouse about how and when to have these negotiations. Different people can handle negotiations differently. We often see some spouses who can sit down face to face with one another to negotiate. In other situations, it may work better to be able to negotiate through your attorneys.
Avoiding a trial or temporary orders hearing are two of the best ways to minimize the costs of your divorce. When you must go to a temporary order hearing or trial you are paying your attorney to prepare for the hearing and to attend. Those hours add up quickly. Rather, if you and your spouse can do the negotiations yourselves then this will minimize the likelihood that an expensive trial or hearing will be necessary.
How are you going to pay for the divorce?
Ultimately, all the planning and steps we have gone through so far in today’s blog post are intended to help you be able to figure out how to pay for a divorce. To begin with, you may have some money saved up that can be used to pay for your divorce. This is a rainy-day fund that you can tap into for emergencies. A divorce would certainly be an emergency if you are unable to plan for it.
Having cash on hand to pay for the divorce puts you in the strongest position throughout your case. The more time that you have to plan for and save money regarding the divorce means that you will be less reliant on other people. Start to look at your bank accounts and get an idea of what you have in savings. You can meet with one of the experienced family law attorneys with the Law Office of Bryan Fagan to learn more about the likely costs of a divorce.
We have already talked about how credit cards may represent a necessary way to finance your divorce. Choosing to put the costs and expenses of the divorce on a credit card would allow you to be able to defer them to the end of your case. Those debts would end up being divided in your favor after the divorce is over. Again, what you do not want to do is run up a large amount of credit card debt just because you can.
Some people who go through a divorce will do so after receiving financial assistance from their family. If you can be able to talk to your family about paying for part of or all of your divorce that may be a conversation that you would like to have. You would need to look at the dynamics of your family to determine if this is a good option or not. In some situations, your family would not be a great source to help finance your divorce. If Thanksgiving Dinner isn’t going to taste the same if you owe your family money, then you may want to consider other options.
Talk with the attorneys with the Law Office of Bryan Fagan about the different attorney-client arrangements that we can offer you. For instance, we can help you draft the language for your final decree of divorce, attend one hearing or mediation with you, or just work to get your divorce filed. These are ways for you to ensure that you have an attorney speaking into your case without having the expenses of a traditional attorney-client relationship.
Closing thoughts on how to navigate divorce finances
Without a doubt, getting your divorce off the ground is one of the toughest stages in the entire case. It can take a lot to just convince yourself to file the case. From there, almost every person who files for divorce will have questions about the best way to go about doing so. At the top of your list of concerns is likely a real worry about how to go about paying for the case. You may have delayed filing for divorce because you have legitimate concerns over whether you can afford to even begin a case.
We hope that the information provided to you today has been helpful. All our circumstances are unique so what works for you may not work for your neighbor when it comes to paying for a divorce. However, the more information that you can take in the better prepared you will be to move forward. Sometimes you can come across a potential payment method or source of money that you never would have considered.
The Law Office of Bryan Fagan posts unique content about the world of Texas family law every day. We hope that you will join us again tomorrow and look forward to meeting with you if you have questions about anything you read today.
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 well as about how your family’s circumstances may be impacted by the filing of a divorce or child custody case.