Post-Divorce Budget Planning

While it is always important to build a budget, it’s essential when you go through a significant financial change like one that follows a divorce. Budgets should include everything from necessary, known expenses to measurable, planned expenses and also include estimates for items that are often overlooked or harder to predict.

Planning future financial needs is crucial in your divorce because it helps you illustrate the details of your financial situation and helps you build a case to receive maintenance. During and following your divorce, budgeting can give you peace of mind and security during a time of uncertainty. 

In this post, we outline standard expenses to include in your budget, as well as eight items that are often overlooked as you plan your financial situation.

Standard Budget Items

Some expenses are easy to plan for post-divorce because they are predictable, easy to estimate, and known financial commitments. These items include:

  • Mortgage or rent
  • Car payments, gasoline, and insurance
  • Food 
  • Entertainment
  • Utilities 
  • Clothing

However, splitting your household into two and taking on the sole responsibility for some expenses can lead to costs being underestimated, overlooked, or not well-defined. That’s why it is critical to include additional budget estimates for items that are harder to predict.

8 Items Often Overlooked

Building an accurate budget means understanding whether you’ll have enough money to comfortably live and respond to the unexpected. Here are eight critical budget costs that are often overlooked, especially during and after a divorce.

Insurance Costs

If your health insurance was covered through your spouse’s employer, you may be surprised about your out-of-pocket costs post-divorce. Usually, decent plans are offered by many employers at minimal costs to employees because employers help pay monthly premiums. When you are on your own, these expenses quickly rise. One option includes filling out COBRA, which is an extension of your current insurance plan through your ex-spouse’s plan where you are required to pay for the full monthly premium (available for up to two years after divorce). Another option is your state’s health insurance exchange (in Colorado, this is called Connect for Colorado). If you need specific coverage for prescriptions, check how your new insurance covers those prescriptions. On the auto and home insurance side, if you buy a new home or car as you start to rebuild your own life, you may incur higher insurance costs that you didn’t anticipate. 

Childcare Costs

Following your divorce, you may no longer be able to build a schedule in which you don’t need childcare, even if you previously worked out a schedule with your spouse or other family members. Typically, your need for childcare will increase as a single parent. This is critical to calculating as it is included in your sworn financial statement. Child care is also included on the child support worksheet in Colorado and influences obligation amounts. Therefore, it is critical to have a clear expectation of these costs during the year (and how the costs may vary during the school year and throughout the summer). Especially if you are expected to work more hours than you did during your marriage, it is important to get ‘credit’ through child support from the other parent. Also, consider pet care. If you plan to rejoin the job force, for instance, you’ll need to pay for services for your animal while you are working, even though your spouse and you may have been able to share these responsibilities and build work schedules around them in the past. 

Emergency Savings Account

Having up to six months of living expenses in an emergency fund provides peace of mind. You may need to rebuild this by putting money aside each month to create an emergency fund for things like job loss or a significant home repair.

Retirement Savings

Many divorcees need to rebuild their retirement savings. Participating in an employer retirement plan can make this easier as they often provide matches to help you reach your retirement goal. If you have been out of the workforce for a long period of time and you are trying to support a case for maintenance, it is important to include necessary retirement savings needed on your sworn financial statement in order to reasonably retire if your current assets and growth are not sufficient to do so.


Often, memberships to everything from fitness clubs to Amazon Prime include a family rate. After a divorce, you’ll take on 100% of these costs as you secure your own memberships and subscriptions to important experiences and opportunities. Plan accordingly because small costs can add up quickly.

Gifts and Special Occasions

When your budget is tighter, you may feel the impact of holiday gift giving or a vacation a lot more than you did with two incomes. Consider setting aside some month each month in your budget to pay for these experiences and gifts.

Home and Car Maintenance

While it is easy to plan for monthly car and home payments, and even approximate gas and electrical costs, budgeting for unexpected repairs is trickier. Without extra money set aside, you could find yourself significantly dipping into your emergency savings fund for things like this. Consider the total cost you want to spend on home updates in a year and budget accordingly, on a monthly basis. For auto issues, plan for at least one significant expense a year and set aside money monthly to fund this emergency repair.

Future child expenses

If you have young children, some of the following items might not be on your radar yet, but they should be addressed in your parenting plan and future budget when they become applicable. Planning for and having agreements outlined in your parenting agreement reflecting how some of the following items will be handled can be extremely helpful. You are not obligated to agree to these expenses, but being proactive and setting expectations is key to successfully funding these future costs, lowering future stress and can provide the framework for a better co-parenting relationship. You can define these expenses as part of your divorce decree and parenting plan agreements:

  • Cell phone costs
  • Car insurance
  • College savings/costs 

Future Budget Planning

Creating a successful budget is critical to your financial future. At A.M Financial, we help ensure that you are set up for future success after your divorce with thorough planning and advanced financial expertise. Capturing 100% of your expenses, no matter if you are a single parent or past retirement age and on a fixed income, helps reduce stress and create more certainty about your finances. Contact our team to learn how we can help with this critical part of your financial planning.