There is no way of avoiding a simple truth about divorce: it is not fun. You may have a sense of satisfaction when your divorce is finished but you will not feel anything close to enjoyment as a result of the process. After all- you are separating yourself from the person who you at one time believed to be your life partner. Now you are faced with the prospect of making improvements in your own life to best ensure your success moving forward. Change is hard. Divorce is hard. There seems to be some degree of correlation here…
For starters, consider that it is now easier than ever to take control of your financial fortunes in order to put yourself in a position to win. On the other hand, it is now easier than ever to find yourself tempted by pretty, shiny distractions that can limit your time spent on making worthwhile changes to your habits and lifestyle choices.
The math of your new life is not that complicated
Personal finance is more about your behavior than it is about knowledge regarding spending, savings or anything having to do with our economy as a whole. As the title to today’s blog post would indicate, if you can control the person staring back at you when you look in the mirror you can control your finances. That is easier said than done, however. If we could control our spending and our eating habits we would all be rich and thin.
That self control and fiscal restraint is going to be pushed now that you are a divorced person. Gone are the days when your household had two incomes contributing to it. Now you find yourself as a single person with the possibility of additional outputs like child support and spousal maintenance. Your unfamiliarity with a budget is not an excuse for messing up payments or failing to make them altogether. You need to learn quickly how to budget your money and spend accordingly.
In the past your earning capacity may have been able to compensate for problems associated with your overspending. If you busted a hole in your family’s metaphorical financial wall, all you had to do was plaster over it with some extra money made while driving for a ride share company or something similar. Now you find yourself with less wiggle room and the only way to make up that difference is to change your habits.
Budget to make the math work
Once you have figured out what your expenditures are each month it is a good idea to lay out what money comes into your home each month and how much will need to be allocated for each of your financial obligations. Part of doing this is keeping accurate records of your bills and when each needs to be paid. If organization is not a trait you possessed during your marriage life there is no better time to develop your organizational skills than during the time period immediately after the conclusion of your divorce.
Creating a budget that will work for you now and into the future
Even if you are still in the middle of your divorce it is worthwhile to create a budget. If you can get a firm grasp of what your future expenses and income look like you are in the driver’s seat in terms of your ability to negotiate from a firm position as far as your finances go. While your spouse may only be guessing at what he or she “needs” in a post divorce life, you can be in a position where you are more or less certain about what your needs are.
A judge could also use your estimates in order to gain a better understanding of the likely financial situation that you will find yourself in after a divorce. Child support and spousal maintenance are dependent upon your income so keep that in mind. Compare what your income and outgoes are during your divorce and in the time period afterwards. Doing so can help you pinpoint exactly where you need to make changes to your spending habits.
You can be as detailed as you wish when it comes to the creation of your budget but the more detailed you make it the better prepared you will be. The world of technology offers many a website and app for your phone that can track expenses and income in order to quickly help you set up your budget.
Spousal maintenance as part of your monthly budget
Texas recognizes spousal maintenance as payments made in a set amount over a set duration of time after a divorce concludes. Similar payments can be made during a divorce in Texas but those payments are known as temporary spousal support. These temporary payments typically are used to ensure that you as a spouse can care for your minimal basic needs.
Spousal maintenance can be ordered as long as you and your spouse have been married for at least ten years. The longer you were married the longer spousal maintenance can be ordered for. Your budget can contradict estimates of future costs presented by your spouse and can allow a judge to allocate future costs more evenly. If you earn significantly less than your spouse and lack an education that could compensate for that discrepancy in pay then you may increase your chances of being awarded spousal maintenance.
What to do about health insurance after your divorce?
Another important component in your budget will be health insurance. You may have previously been covered by your spouse’s health insurance plan through their provider. While your temporary orders may have barred your spouse from removing you from the policy during your divorce that is probably not going to be the case after your divorce has concluded. As far as your children are concerned you and your ex-spouse will need to make sure that health insurance coverage continues to be made available to them.
From a dollars and cents perspective it could be logical for you to continue to have your spouse and you remain on the same auto insurance. To do in a prudent manner would be to contact your auto insurance provider to let them know that you are divorcing your spouse and need to make changes in regard to the policy.
Taxes- beginning the discussion on everybody’s least favorite subject.
Nobody likes to pay taxes. Nobody likes to talk about paying taxes. Your filing status may have changed as a result of your having divorced your spouse. In the event that you are now receiving spousal maintenance and child support as a result of your divorce you will need to take these items and note them as income in the case of spousal maintenance and as a non-taxable item in the case of spousal maintenance.
As far as claiming a child as a dependent on your taxes, you are no longer able to alternate years of doing so with your child. You must be the custodial parent to your child in order to do so. If your child is under the age of thirteen you are able to take tax credits for providing the child with care while you work and other expenses as well. Finally, if you are in a position where you are paying for your child’s medical expenses then you can deduct these costs even if you are not your child’s custodial parent.
Questions about any of the subject matter we discussed today? Please contact the Law Office of Bryan Fagan, PLLC
If you have any questions in regard to the material that we covered today I recommend that you contact the attorneys with the Law Office of Bryan Fagan, PLLC. We represent clients across southeast Texas and would be honored to do the same for you and your family.
To schedule a free of charge consultation with one of our licensed family law attorneys please contact us today. We offer consultations six days a week where we can address your questions and concerns directly and in a comfortable environment.