Stay at Home Moms: Learning to Budget Post-Divorce

In my work supporting divorced individuals in the Colorado area along their financial journey, I see one particular group of clients who struggle more than others. Long-time stay-at-home mothers who weren’t involved with managing the finances or individuals who may have fully handed off financial management to their former spouse tend to have significant struggles during and after a divorce. 

In this post, I highlight the two main insights I have about this group. If you identify with this group, I’ll share ways you can change your perception of money to better support your financial goals. Lastly, I’ll offer ideas and tips to make the transition to post-divorce budgeting easier.

Money is a Limited Resource

Many stay-at-home moms had access to what may have felt like unlimited funds in their marriage. Some may have had a credit card that their spouse paid off and managed and used it freely for groceries, gifts, items the kids needed, registration fees for sports, spa days, and the list goes on and on. After a divorce, individuals who weren’t involved in financial planning or didn’t directly generate income for the family go through a period of relearning budgeting as they now likely have a fixed income and must fit their spending needs into a monthly allocation of maintenance and/or child support (along with any other supplemental income they might have such as now working outside the home). It takes time to fully recognize that money is limited, especially if it didn’t feel that way in their marriage. Only when we learn that money is limited can we really understand the true ‘value of a dollar and money in general.

If you previously were not involved in money management of the home, you may be pretty far removed from all the expenses required for day-to-day living. If your spouse was a single-member CFO in the relationship, you may not even see all the bills that were coming out of your account via direct deposit each month or you may not have a clear understanding of the cost of maintaining things like a home, car, and more. You may even be overwhelmed by setting all this up yourself and making sure you have enough money in the right accounts for regular bills, checks, and payments to clear.

If you weren’t involved in the day-to-day finances and budgeting in your marriage, you were likely also not part of retirement planning. Therefore, you may have a significant blind spot around how to budget and invest for retirement, how these decisions impact your taxes and the importance of planning for the future. It’s critical to get the help and support you need from a financial professional to ensure you don’t end up with a surprise tax bill or worse, end up unprepared with the resources you need for retirement.

Most stay-at-home moms I work with post-divorce go through a process that leads them to understand money’s value firsthand. This comes through having to make hard decisions about what’s most important on a monthly basis, and learning how to make decisions when you have competing financial demands by creating a budget that aligns with your values.

Budgeting is Key to Success

Budgeting and money management can be extremely difficult post-divorce. It requires discipline, prioritization, and sacrifice. In order to create a budget that truly works for you and your family, you must first spend time outlining your values and aligning your limited money with those values. This process of understanding your financial priorities leads to the most life satisfaction when finances are tight.

For example, if experiences are important to your family, such as vacations, nights out, dinners, and events, then you’ll have to make sacrifices elsewhere to prioritize spending in this category. If you appreciate and want to prioritize a nice home that is fully decorated, professionally cleaned, and landscaped, and have friends over regularly to enjoy it, your social finances might be spent in this category instead. It’s important to get clear about where items like new clothes, organic food, and putting your child in competitive sports fall on the value spectrum for you so that you can align your budget accordingly.

As you work through the process of developing a values-based and realistic budget, have grace and patience with yourself and your advisors. As you get closer to understanding your financial limitations, you may want to share those more broadly with your family. Depending on the age of your children, you may want to create transparency around financial priorities in your post-divorce life and even get them involved in the planning and balancing of your budget. Similarly, you can share the amount of money you have budgeted for the holidays with close family members in an effort to align gift-giving expectations with your finances.

A financial advisor can help you create a budget that not only aligns with your values but also improves your financial confidence by setting spending boundaries for you and your family. Committing to an ongoing relationship with a trusted financial partner means you can revisit this budget often to understand whether you must supplement it with part-time or full-time work and to ensure you are saving enough for retirement and emergency expenses. Budgets must also evolve with your changing family. Your teen children won’t have the same financial needs as your toddlers did, and your values will continue to change over time as well.