Tips for budgeting after divorce

Revisit your financial priorities

Be prepared for one-off expenses

In the months immediately following the divorce, be prepared to pay off several one-time bills. This may include legal fees, down payments on a new home or rental, and advances to set up new utility services in your name. After you take care of those one-time payments, you can focus on your regular expenses and work toward long-term goals. Remember that some of what you receive in the divorce settlement may be illiquid, meaning you may not be able to convert it into cash as quickly as you’d like. Work with your available cash on hand or things you can quickly change to cash when you create your budget.

Create your new budget

Once you've decided your priorities and have a grasp of your new financial standing, you can build a budget that works for you. Make sure you dedicate a portion of your budget to essential expenses, retirement savings, and short-term savings. You can always adjust as your needs change, and it’s best practice to check up on your budget regularly to make sure it still fits your needs.

Build an emergency savings fund

Make sure you have an emergency fund to help stay out of debt and reduce financial stress. Start with a goal of saving $1,000 and work your way up from there. Ultimately, the goal should be to save 3–6 months of living expenses. If 3–6 months is not realistic immediately, try committing to a regular contribution to your emergency fund, paid like any other bill, while you tend to more pressing matters.

Plan for your future

With so many changes happening all at once, it’s understandable that planning for the future might move down your priority list. Remember to set yourself up for success and keep long-term goals in mind. Make room in your budget for manageable contributions to your retirement accounts, and be sure to update your investment mix strategy based on your new financial situation. Your new strategy should include your assets, income, liabilities, risk tolerance, and investment horizon.