There is always certain stress when it comes to money issues after a divorce. A usual dual-income family could now need to survive on a single income which could be just half of what the family used to enjoy. With such drastic reduction, it is common for the custodial parent to feel stress about providing for the family. In some cases, children might also react badly to the lack of funds if they are used to a lavish lifestyle. Nonetheless, a simple budgeting method could help a parent go a long way.
Budgeting has a bad name that is associated with being poor and having to torture yourself with unfulfilled wants because you have no money to buy all that you want. Budgeting is definitely not that and in fact, can be fun and exciting to see those digits growing in your bank account.
In the simplest form, your monthly salary can be looked at in three ways:
- – Money for your Expenses
- – Money for your Savings
- – Money for Everything else
This is the money that you use to pay for your bills, debts and loans on a regular basis. It includes utilities bills, phone bills, mortgage, insurance, cable Tv and the likes. Expenses also include irregular expenses such as yearly magazine subscriptions and yearly newspaper subscription renewal. Calculate all these expenses into a single amount and make sure that you save this amount every month in order to cover all your expenses.
This is the money that you put away as savings in a separate bank account. A separate bank account is ideal because once you transfer the money into this saving account; it should not be touched unless there is an emergency or a withdrawal for the goals that you are saving for. There are many kinds of saving goals that you can set for yourself. For example, you can save for emergency funds, vacation funds, your children’s university funds or investing funds. Similarly to your expenses, calculate these monies into a single amount and save it regularly into a separate bank account.
3) Everything else
This is the money that you are free to spend. It is basically whatever you have left after putting away expenses and savings. You can spend it anyhow you like, be it groceries, your children’s new clothes, an occasional treat for yourself or a special outing with your children. However, do take note of this amount as it is easy to overspend and end up withdrawing from your savings account to take care of necessities later on.
This is a very simple way in learning to budget your income for everything so that your children can be provided for. There is bound to have a major change in lifestyle but once you adapt to the new lifestyle, things will be easier to manage and with proper budgeting, you will be well on your way to a new comfort level in your life.