The Real Cost of Divorce: How to Budget for Your Post-Divorce Life

From Two Incomes to One (or One to One): Creating a Realistic Financial Plan for Your Next Chapter

Let's talk about the elephant in the room... going from a two-income household to a single-income household is financially brutal. Even if you're the primary breadwinner, divorce changes everything about your financial life. And if you've been a stay at home parent, the shift can feel terrifying and make you want to shut down.

The bills don't change. Your kids still need the same things. But suddenly you're covering expenses on one income instead of two. Or maybe you've been out of the workforce and you're trying to figure out how to support yourself for the first time in years.

And while the financial transition is hard, knowing what you're dealing with—actually seeing the numbers—helps you negotiate better and plan smarter. And, it transforms anxiety into action.

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Why Creating a Post-Divorce Budget Matters

We all know understanding your budget has endless benefits, but in divorce it can mean the difference between surviving versus thriving. Here are the benefits of knowing what your financial realities are before and during divorce:

You can't negotiate a fair settlement without knowing what you actually need. If you don't know your post-divorce expenses, how can you know if the proposed settlement will actually work? You can't.

Divorce is a massive financial event. You're taking a single household and creating two. Everything costs more when you're maintaining two homes instead of one.

You need to know where the gap is. Once you see the numbers, you'll know exactly where you need to focus: increasing income, reducing expenses, or negotiating for more support.

It prevents that terrifying moment six months after divorce when you realize you can't actually afford your life. Better to know now and plan for it.

As one family law attorney told me: "Not looking at what you would financially need is one of the biggest mistakes people make during divorce. You need to look down the road and figure out what you actually need to survive."

PRO TIP: Put every financial decision you need to make during divorce through my 5-5-5 rule of negotiation.

Start With What You Spend Now

Before you can create a post-divorce budget, you need to understand what your household actually spends right now. You're looking at three types of expenses, and trust me, you need to track all of them. Start by:

Pull the last 3-6 months of:

• Bank statements

• Credit card statements

• Cash spending (estimate if you don't track)

Fixed Expenses (The Same Every Month)

• Mortgage or rent

• Car payments

• Insurance (health, auto, home, life)

• Phone and internet

• Subscriptions (streaming, apps, memberships)

• Childcare or tuition

• Loan payments

Variable Expenses (Change Month to Month)

• Groceries

• Gas and transportation

• Utilities (electric, gas, water, trash)

• Dining out and entertainment

• Clothing

• Household items and maintenance

• Medical copays and prescriptions

• Kids' activities and expenses

• Pet expenses

• Personal care (haircuts, etc.)

Periodic Expenses (Not Monthly)

• Property taxes

• Car registration and maintenance

• Insurance premiums (if paid annually or semi-annually)

• Holiday and birthday gifts

• School supplies and fees

• Summer camps or activities

• Home repairs

• Vet bills

Pro tip: Most people underestimate their spending by 20-30%. (Yes, that much!) Track it honestly. Just because you don't want to see the scary numbers, doesn't mean they don't exist. Knowledge is power, and understanding your financial realities now benefits you short term and long term.

Creating Your Post-Divorce Budget

Now comes the hard part: figuring out what your life will actually cost after divorce. Here's a breakdown of the biggies to take into account:

1. Housing Costs

   This is usually the biggest change and the scariest one to tackle. Maybe you're keeping the family home, which means you're covering the full mortgage instead of splitting it. Or you're looking at rentals in your area and realizing what "realistic" actually means for your budget. Some people move in with family temporarily to get their feet under them (there's no shame in that!).

   
   

   Here's what people forget to budget for:

   • Staying in the family home? You'll need to cover the full mortgage, not split it.

   • Moving to a rental? What's realistic in your area?

   • Moving in with family temporarily? What will you be able to contribute or save?

   
   

   And don't forget:

   • Utilities in your name only

   • Renter's or homeowner's insurance

   • HOA fees if applicable

   • Maintenance and repairs are all on you

   
   

2. Kids' Expenses

   If you have children, then you'll still be dealing with the cost of childcare or after-school care, school tuition (including fees and supplies), extracurriculars and lessons, clothing (because kids grow constantly), medical copays and prescriptions, and all the activities and entertainment. And if you've got kids who are almost driving age, planning for those costs will go a long way to curb any budget hiccups.

   
   

   Who's paying for what? These need to be crystal clear in your settlement:

   • Child support covers basics

   • Who pays for extracurriculars?

   • Who covers medical expenses beyond insurance?

   • What about school activities and field trips?

   
   

3. Transportation

   • Car payment (if you need to get a vehicle post-divorce)

   • Insurance in your name only

   • Gas

   • Maintenance and repairs

   • Registration and taxes

     
     

4. Insurance

   • Health insurance (if you were on spouse's plan, you need your own)

   • Dental and vision

   • Life insurance

   • Tax payments

Reality check: Individual health insurance is expensive. COBRA is temporary and even more expensive. Get quotes now so you can incorporate the right amount into your projected budget.

Your Personal Expenses

You still need to live. That means groceries and household items, personal care, your phone, clothing, entertainment and a social life (yes, this matters for your mental health!), therapy or counseling (which I highly recommend), gym or fitness, and hobbies and interests.

I see people cut everything personal from their budget in an attempt to make the numbers work. Don't do that. A life with zero joy isn't sustainable, or realistic.

Emergency Fund and Savings

Even if it's small, you need something set aside. There's ALWAYS an emergency—the car breaks down, the water heater dies, your kid needs emergency dental work. You also need savings for periodic costs like car repairs and home maintenance, and retirement contributions. Don't stop completely if you can help it, even if it's just a small amount.

The Income Side of the Equation

Now that you know what life costs, let's look at what's coming in. This includes employment income (current or projected), child support if applicable, spousal support or alimony if applicable, investment or rental income, and any other regular income.

For stay-at-home parents who are returning to work, you need to be realistic. What's actually achievable in your chosen field right now? Do you need training or education first? How long until you're earning your full potential? Can you negotiate temporary higher support during this transition period?

Check out 15 Side Hustles You Can Do to Earn Extra Money for practical ideas.

If you're already working part time, look at whether you can increase hours, if there's room for raises or promotions, and whether you need a side hustle to bridge the gap.

Finding the Gap (And What to Do About It)

Here's where math meets reality. Once you add up your projected expenses, then compare to your projected income and make a plan for any and all shortfalls. Don't think in terms of bare minimum, plan for every possible situation.

If there's a gap, you have four options:

• Negotiate for More Support. If the numbers don't work, that's data for negotiations. You can ask for higher spousal support, longer duration of support, different asset splits that generate income (like rental properties or investments), or have your spouse cover specific expenses like the kids' college.

• Reduce Expenses. Look at your budget honestly. Can you reduce housing costs? What subscriptions can you cut? Where can you trim without destroying your quality of life? What's temporary reduction versus permanent?

• Increase Income. This might mean side hustles that fit your schedule, freelance or gig work, transitioning back to full-time work, or career training and education.

• Some Combination of All Three. YOUR BEST BET! Usually the answer isn't just one thing. It's negotiating better support AND reducing some expenses AND finding ways to increase income.

Common Budget Mistakes to Avoid

People constantly underestimate costs. They forget about car maintenance and repairs, kids growing out of clothes and shoes constantly, holiday and birthday spending, medical copays and prescriptions, and home repairs and maintenance.

Or they overestimate income, especially if returning to work. Entry-level pay might be lower than you expect, benefits might not kick in immediately, and it takes time to ramp up in a new job.

There's also the transition period nobody plans for—that gap between when divorce is final, when you're employed, when support kicks in, and when you've actually reduced expenses. That gap can be brutal if you haven't planned for it.

One more critical thing: waiving spousal support. In some states, if you waive it, you can't get it later. Don't make that decision without understanding your long-term financial picture. And make sure you're making this decision based on the numbers, not your ego.

Tools That Make This Easier

All of the above can feel intimidating, that's why I created The Divorce Planner's Monthly Budget Calculator. It's specifically designed for divorce situations. It was developed with input from financial planners and CDFAs who specialize in divorce. It's not just a generic budget—it's built for this exact situation! It walks through every possible expense category, does the math automatically, helps you see both current and projected budgets, shows you exactly where the gap is, and is compatible with Excel and Numbers.

The Ultimate Divorce Prep Bundle includes the budget calculator plus helps you tackle the emotional side and gathering all the other things necessary for a divorce attorney or mediator to get to work—asset logs, what to gather worksheets, financial planning tools, everything your attorney needs. (How's that for easy?!)

Special Considerations

For Stay-at-Home Parents: You face unique challenges with no recent employment history, a gap in your resume, potentially lower earning potential initially, and you may need training or education. Don't shortchange yourself in negotiations. You contributed to the marriage by enabling your spouse's career growth. That has value. Check out the post Complete Guide for Stay-at-Home Moms that has detailed strategies for how to prepare in your situation.

For High Earners: Even with good income, divorce is expensive. You're maintaining two households on income that supported one, lifestyle expectations might need adjustment, tax implications change everything, and support obligations can be substantial.

For Long-Term Marriages: After decades together, retirement planning gets complicated, Social Security decisions matter, pension division requires special handling, and healthcare costs increase with age.

The Emotional Side of Budget Reality

Let's be real: seeing these numbers can be terrifying. Looking at a budget that doesn't balance is anxiety-inducing, but without it you'll put yourself in the position to make poor decisions and not be able to navigate the real changes coming your way.

But here's what I tell clients: When you know the numbers of your life, you can make a plan and change your future.

Knowing the numbers means you can:

• Make informed decisions instead of guessing

• Negotiate from reality instead of fear

• Create an actual plan instead of hoping it works out

• Take action on things in your control

Living in denial and then drowning financially six months after divorce? That's worse. Invest in your future by putting yourself in the best position today.