If you’re splitting from your partner, you may be feeling worried about managing your finances as a single parent.
While it can feel daunting and overwhelming, there are plenty of effective ways to manage money as you navigate this new chapter of your life.
Here, we explore how to create a new budget post-split that’ll help you feel in control of your finances.
Evaluate Your New Financial Situation
Firstly, it’s important to evaluate your new financial situation. Get to grips with your monthly income which may include your wages from employment, child maintenance and/or spousal maintenance.
If you’re getting a divorce, make sure you reach a fair financial settlement outlining how you’ll separate your assets.
For instance, it may state how you’ll split your savings, investments, property, household contents, and debts.
This will give you a clear idea of your financial situation moving forward. It may be worth speaking to divorce financial settlement solicitors who can help you reach an equitable agreement that’s fair to both parties.
Prioritise Essential Expenses
Once you’ve got an accurate picture of your finances, you can start to create a realistic monthly budget.
To do this, you need to calculate your essential expenses, such as your mortgage/rent, utility bills, insurance, and council tax.
Minus your essentials from your monthly income to see how much you have left. You can then create an accurate budget for both saving and spending.
For example, you could follow the 50/30/20 plan which means allocating 50% of your income to essentials, 30% to discretionary spending (such as entertainment or eating out with your kids) and 20% to saving or paying off debts.
If you want to free up more cash by cutting the cost of essentials, there are plenty of effective ways to do this.
For instance, you could try switching your energy provider, buying non-branded food and clothing, and cancelling subscriptions you don’t need.
Build Financial Security
If you have room in your budget, it’s worth setting cash aside each month to create a financial safety net. This is often referred to as an emergency fund.
Typically, an emergency fund contains around three to six months’ worth of essential outgoings that you can fall back on should you need it.
You could set up an easy-access savings account or ISA that pays interest. That way, you can earn interest monthly or annually depending on which account you choose.
You should also take some time to review any debts you have and how you’ll clear them.
Navigating a split is never easy – and organising your new financial situation can take a toll on you mentally and emotionally.
Make sure you set aside some time to do things you enjoy during this time and get specialist advice if you need it.
You could contact your divorce solicitor, financial advisor or an organisation like Citizen’s Advice for help and support.