Budget, planning for divorce

[jobae1234]

Hello all!

I'm potentially separating/divorcing my spouse and I'm starting to get my financial ducks in a row.

I'm self-employed and my income fluctuates somewhat but is reliable on the whole. I can definitely bring in more than 5k/mo post tax but I don't want to have to work extra hard to inflate my lifestyle.

I have no debt except my car.

I'd need to buy my own house. We have a lot of equity in our current house so I'll have somewhere between 175k and 200k to put down, and I'm looking at places that cost 350k or less. So the mortgage payment listed here is a high/realistic estimate. 

We don't have childcare expenses. As of now we're not officially divorcing, so I can stay on his health insurance.

I have no idea if I'll pursue child support. STBX makes about 400k/yr so I'm certainly entitled to something. If I get it, I'll accelerate car/mortgage payments or college savings.

I put 2k/mo in an SEP IRA and I'm on track to retire at 61. I could scale this down and work longer if needed.

Our efund is 20k so assuming we split it, I'll have 10k.

We have one kid, elementary age, and we would do 50/50.

BUDGET 5,000/mo
Mortgage PITI 1500
Electric 400 (high if I end up in a condo, accurate if I end up in a small/old house which is common around here)
Trash 50
Internet 100 (need good wifi for my work)
Netflix 20
Car payment 415
Gas 100 (everything in my life is within a 2 mile radius and the new house will be too)
Cell phone 100 (??)
Peloton 40
Groceries 500
Car insurance 83
Entertainment 300
Dining Out 300
Clothing 200
Hair 100
Kid college savings 150
Kid spending 150
House savings 500


5008 (close enough)

What categories may I be missing?

I feel like I have a good handle on where I could cut if needed. This is not a bare bones budget. I just haven't budgeted on my own in years and I'm not sure what I'm missing!

[simpsongal]

Glad you're planning, I'm sorry things are not working out in your marriage. Divorce can be very expensive, do you have some funds set aside for attorneys fees? The more amicable, the cheaper it may be, but definitely make sure your interests are represented for child support and perhaps alimony.

Comparing to my budget, you might be missing:
water/sewer
charity
streaming services
prescriptions/copays/contacts/glasses?
life insurance
vet bills/food (if you have a pet)

So much of our spending is random Target/Home Depot trips. But you could probably siphon from other categories to cover that type of stuff.

[ellipses84]

PP mentioned most of the categories I noticed you were missing. The other one would be yearly fees like car registration, AAA, Amazon Prime, etc. and more buffer for unexpected and save to spend categories like vacation. Don’t set yourself up to live month to month if you don’t have to. I realize there are some buffer categories. Make sure your emergency savings and retirement are enough of a safety net for some worst case scenarios. IMO self employed single parent requires more of a safety net and if you end up needing ACA for medical expenses it can be a few hundred a month.

I’m sorry you are facing this. It’s a big life change so it can be hard no matter if you know it’s the best decision. I think you 💯need to get child support (at least for a divorce, even for a separation if it’s long). Even if you have 50-50 custody and visitation, with your income differential you will be entitled to a lot, and that money can go to pay for costs like kids activities, college fund (housing and food). Your state should have a calculator for it. STBX should be paying his fair share and have things in the agreement, like he provides medical coverage and extra expenses for the child and pays for college/ pays child support until the end of college, inheritance, etc. Even if you trust him to do what is best for your child, life circumstances change, people change and sometimes there are unintended consequences (like if he got remarried and died the next day, his money would go to his spouse if he didn’t have a will and if inheritance is not in the custody agreement, he could change his will later). Also, if he controls the money for the child, you should still have a say in the decisions- like if he pays for extracurriculars can he say no to something you want the child to do that he says is too expensive? If you get child support you could split costs equally or pay for things that occur on your own time. Consider costs that would change in the teen years like vehicle and phone expenses. You should be eligible for half of all shared assets including his retirement, and may even be eligible for alimony.

If you haven’t yet, please have a consultation with a lawyer so you understand your rights and responsibilities. A divorce can be amicable and fair to both parties.

[fryjack2]

May I ask why you wouldn't pursue child support? You say you don't have childcare expenses but you have an elementary age kid. Do you anticipate never using a sitter? Your SBXH makes substantially more than you do. Childcare costs like sports, music, camp etc. should be hashed out to be fair-which doesn't always mean equal amounts spent by each party.

A lawyer can also help you in terms of what else you may be entitled to such as retirement funds. Doesn't mean you have to take them, just may want to know what your options are.

Some budget items I don't see are:

CVS/drug store for tampons and laundry detergent, etc.
Gifts
Charity or supporting friend's causes- if you do that and want to continue
Groceries seems a little low based on prices now, but you know your spending there better than I do
Trips/vacations

[jobae1234]

Jun 17, 2022 16:58:16 GMT -5 fryjack2 said:

May I ask why you wouldn't pursue child support? You say you don't have childcare expenses but you have an elementary age kid. Do you anticipate never using a sitter? Your SBXH makes substantially more than you do. Childcare costs like sports, music, camp etc. should be hashed out to be fair-which doesn't always mean equal amounts spent by each party.

A lawyer can also help you in terms of what else you may be entitled to such as retirement funds. Doesn't mean you have to take them, just may want to know what your options are.

Some budget items I don't see are:

CVS/drug store for tampons and laundry detergent, etc.
Gifts
Charity or supporting friend's causes- if you do that and want to continue
Groceries seems a little low based on prices now, but you know your spending there better than I do
Trips/vacations

I guess I would pursue child support. It's just weird to think about.

Yes, with my job I only work during school hours. I currently do all drop off and pick up. It's pretty great, actually. And we have local family, and each other, as sitters. But something to think about. 

I'm a vegetarian so grocery bill is lower.

VACATION, needs to be a priority!

[jobae1234]

This is really helpful to hash out. I added many of the suggestions on here. It shows me that I need to either 1) work more hours, 2) reduce my discretionary spending, or 3) lower my housing costs.

Dollar for dollar, I have more in retirement than him. This is a major point of pride for me considering the discrepancy in our earning! I got started earlier than he did and I contribute a much bigger percentage of my check. I always have. So it's making me giggle that you all are encouraging me to go after his retirement, but really it's him who should be going after me! I rule! (Ok not really, I only have like 30k more than him so we're very close in total, but I STILL RULE!)

[samanthamkm]

Jun 17, 2022 19:05:46 GMT -5 jobae1234 said:

This is really helpful to hash out. I added many of the suggestions on here. It shows me that I need to either 1) work more hours, 2) reduce my discretionary spending, or 3) lower my housing costs.

Dollar for dollar, I have more in retirement than him. This is a major point of pride for me considering the discrepancy in our earning! I got started earlier than he did and I contribute a much bigger percentage of my check. I always have. So it's making me giggle that you all are encouraging me to go after his retirement, but really it's him who should be going after me! I rule! (Ok not really, I only have like 30k more than him so we're very close in total, but I STILL RULE!)

Be careful with retirement, the courts could make you give him some since you have more.

[awkwardpenguin]

Honestly you should pursue everything you’re entitled to. Child support is usually done by a formula, not based on actual expenses. You’re probably eligible for alimony in many states. And you need an agreement about higher education funding. His income counts for financial aid purposes, so your kid(s) will not get any financial assistance.

You also need to plan for health insurance and expenses. He should have to keep the kids on his insurance and pay the premiums.

I’d talk to a lawyer soon.

[plutosmoon]

Divorced lady here. Get the child support, in my state it can't be waived if owed. Include divisions of extracirrculars, medical, college, etc, in your agreement, use your state calculators. If you are owed spousal support get that too, this can also be used as a negotiating tool and traded for assets if that makes sense in your situation. In my state an ex spouse can stay on their former spouses group plan, I don't think that many states do that, but check if your state is one. A lawyer will walk you through everything. My take home income including child support is lower than yours, but my housing is about your estimate, I still add to my savings most months.

When my ex moved out my expenses went through the floor, food went down 40%. Less laundry, less dishwasher running, no video gaming, less lights on in different rooms, I think my electric bill dropped in half, household supplies and toiletries last longer. Another adult in the house is expensive, you might be surprised at the drop in some costs. I'd at least price out health insurance for yourself and add it as a budget line, at some point you might not want to be in separated limbo. Save it until you need it, but at least plan for the cost to be there.

You may have to give up a bit of your retirement, I did and I'm not going to lie that stung the most out of everything. I had my statements from about a month before we were married, much to the shock of my ex's lawyer, since we'd been married almost 15 years, I was able to protect my premarital balance from division. If some predates the marriage and you can prove it, they might let you protect that amount.

[sadlebred]

As others have said, the first thing you need is a good divorce attorney. They can help you navigate your state's laws to figure out what you may owe and what you are owed (alimony/child support). It's worth paying for a good one. In some states, the higher earner may be required to pay for the lower earner's attorney.

[idahome]

Regarding health insurance if you go the legal separation route his employer may require you to be dropped as his dependent. You’d then have the ability to stay on the plan through COBRA. Given your income discrepancy I’d ask your attorney about requiring him to cover your medical premium for a period of time during separation and after you’re divorced if they does happen.

Another option with health insurance is the marketplace. There are subsidies in place right now that are significantly reducing the amount people are paying out of pocket for that coverage.

[formerlyak]

You can’t decline child support. That is money owed to the kids, not you. That’s how it was explained to me. You can determine how it is spent if you don’t need it. I didn’t collect the child support as long as ex agreed to use it toward a two bedroom apartment so DS would have his own room at his house. I made more money, but DS is with me 80% of the time, so ex owed me the child support. But I knew he couldn’t afford a two bedroom if he gave it to me, and I could afford to stay in our house without it. So I figured this way it was still supporting the kid. In exchange, he waived his right to alimony (which is allowable).

[heygrey]

Jun 17, 2022 18:53:33 GMT -5 jobae1234 said:

I guess I would pursue child support. It's just weird to think about.

Yes, with my job I only work during school hours. I currently do all drop off and pick up. It's pretty great, actually. And we have local family, and each other, as sitters. But something to think about. 

I'm a vegetarian so grocery bill is lower.

VACATION, needs to be a priority!

Your time here is worth money!! It is great for you because you get to spend time with your child everyday even days (presumably) that they will go to dad's overnight, but if you needed to take on longer hours or a new career, it will cost your ex in childcare for that service you can no longer provide. He should be paying for this. Figure out what before/after care costs in your area and he pays a prorated amount for the days he has custody, but you provide childcare. Do you work in the summers? Do you stay at home for school holidays? If so, he should be paying for those as well. 


I've been helping a good friend navigate her divorce the last ~6 months and this has been a sticking point. She is a teacher and able to do the vast majority of childcare for their 2 children, and he just expected she'd keep doing that for free (because of course!). At first she didn't ask for payment because she saw the value in spending time with her kids everyday, but he wanted to nickel and dime a lot of stuff in their divorce agreement so now she's pushing back on the childcare. In our area it would be impossible for him to find reliable care for just he days he has the kids. You have to pay full-time to maintain a spot, so paying her half is very reasonable. Also, like many divorce stories I hear, hers started very amicable and now it isn't. As things get closer to finalization, he's getting nasty. Figure out everything you are entitled to and get it written into the initial draft of your divorce agreement. You can take less down the road, or save the extra money for your child, but it's really hard to ask for more later if you need it. 

[brooke77]

Speak with an attorney. I think you should consider adding a line item for house maintenance (especially if you end up in an older house) for things like plumbers, electricians, etc. Also help with snow removal/yard maintenance.

[sent]

This is how I see divorced families play out in my office when the child needs orthodontic treatment and there is an out-of-pocket of thousands of dollars involved. Just something to think about since your child probably hasn't reached the age where this issue has come up. I'm going to present the scenarios as if the mother brings the child to the initial appointment but sometimes it's the father.

1) We present the fee, the mother handles all the financial arrangements. Sometimes we don't even realize the parents of the child are divorced because it doesn't ever come up. Sometimes we know because the child has 2 insurances and the mother tells us, but everything goes smoothly so it's a non-issue financially.

2) We present the fee, the mother says "well his father owes half." We let the mother know that we will not split the contract and set up separate payment plans for each parent but the other parent can call us or come in and make a payment on the child's account. What usually happens is the mother sets up a payment plan for her amount and the father just makes a large lump sum payment for his amount.

3) We present the fee. The mother takes it home to give to the father. When we follow up, we find out that the father "feels it's too expensive and wants another opinion." My observation is that this is usually pitting the child in the middle of their custody issues and it is a power play. This isn't about a $100 or $500 discount to make the fee less expensive because all the other offices near us will have a similar fee if they really want the child to have the treatment.

4) The mother comes to my office because after the divorce, her new lower income qualifies the kids for Medicaid. She wants to see if the kids will be eligible for braces under the Medicaid guidelines and we are a Medicaid provider. Before the divorce, the kids were on the dad's private medical/dental insurance and for whatever reason after the divorce, the kids are no longer on that "better" insurance. If they don't qualify for braces under the Medicaid guidelines, then we see any one of the above 3 scenarios play out.

Also I know that in my state, I could still be on my ex-spouse's medical insurance even after the divorce. It is allowed.

[Mushe]

I work in the child support world and am happy to talk it through with you, if you’d like. I’m an attorney, but this wouldn’t be legal advice, who specializes in intestate, so I’m familiar with many states’ formulas.

[mofongo]

I don’t have experience, but I would def get whatever you can! Sorry you’re facing this.

[dr.girlfriend]

I agree with the other ladies. Things can change a lot in the coming years. You could have to get a new job that requires childcare. You could have health problems that limit your ability to work. You could get a heavy burden of caretaking your family nearby instead of them helping out. I had a friend who had three small kids and they had never budgeted for childcare because both mother-in-laws were retired and eager to share the load. While the kids were still pre-school age both MILs contracted long and serious illnesses and then passed away, and it was terrible all around. Sorry, don't mean to be all doom and gloom, but I would definitely talk to an attorney and accept what you're entitled to.

[Deleted]

I would speak to a divorce lawyer about child support. Just because you can afford it NOW without it doesn't mean you can in the future. Plus it adds value to your child's life such as affording fun activities, vacations, toys, books, and a standard of living they would have in a two income household. You can also front load his college savings should you not need the child support now and taper off when he's older and that money can go towards a car when he's a teenager.

I'd also speak to a lawyer about stopping your retirement savings or reduce it until you know the implications.

For your budget, I don't see a line item for yard work/maintenance. I rent but I even have items for my lawn care and flowers (this is if you get a house and not a condo of course). Eventually you will likely need your own health insurance and I would build that in for now just in case (and use the budget items for your lawyer costs). I assume "house savings" is for emergencies and stuff to replace hvac/water heater/plumbing repairs/ etc. May want to increase it in case you have to replace your car, medical bills, etc.

[Roc A Bee]

You should most definitely get the child support. You can stick it straight in savings for college/future car if you’d rather spend it that way. But definitely get all that you are entitled to.