Facing Divorce? Use These Four Tips to Develop Your Budget

By Karen Chellew, LL
My Divorce Solution

Updated: August 8, 2023

Preparing your budget in divorce

The mere mention of the word “budget” can trigger a range of responses, from a distant gaze to almost panic. Due to its emotional weight, many financial writers and planners now prefer the term “spending plan.”

Regardless of the term used, crafting a budget is crucial for your financial well-being. The absence of a lifestyle and post-divorce budget can lead to negative effects on your financial future through settlement agreements and court orders.

Why is this important?

Recording historical family income and expenses is vital for demonstrating your established standard of living and financial needs. During and after divorce proceedings, spousal maintenance/support and child support hinge on historical validation. Furthermore, a post-divorce budget is indispensable for assessing settlement options realistically.

Mapping a lifestyle analysis is among the initial tasks to undertake when facing divorce. To facilitate this process, it’s advisable to set aside emotions and focus on fact-finding. While complete success might not always be achievable, maintaining this objective will prove beneficial.

Here are four starting points:

1. Avoid Getting Overwhelmed

Begin by tracking expenses for two months. You don’t need to categorize every receipt beforehand. Start with known expenses and proceed to more complex ones.

I advise my clients to begin by tracking their expenses over a two-month period—a solid starting point. You might assume that every receipt and expense must be meticulously categorized and arranged beforehand, but that’s not necessary.

Begin with the expenses that are readily apparent and input them onto your spreadsheet. Gradually proceed to the expenses that require more effort to monitor and calculate.

Various methods exist for expense tracking, such as using an app or manually noting transactions on a spreadsheet. For those of you who like to track on a spreadsheet, here’s a budget worksheet that I provide to my clients beginning this process.

Select the approach that suits you best. Be aware that your choice might differ from recommendations by friends or family. Recognize that each of us has a distinct approach to discussing money. Embrace how you personally connect with finances and engage in money-related conversations.

2. Begin with a Lifestyle Budget

As you navigate divorce, develop a lifestyle budget, temporary budget, and post-divorce budget.

Begin with the historical family lifestyle budget, which is intended to capture the standard of living the parties had during the marriage. This does not include expenses that are incurred in anticipation of a divorce, according to the Attorney at Law Magazine.

3. Gather Documentation

Collect paystubs and other income documents from your tax return. You will also need to calculate how much overtime, bonus money, tips, commission, investment / retirement income, etc., that you and your spouse average each month.

As for expenses, you will want to track and itemize essentially anything you spend money on, i.e., essential bills like a mortgage and utilities to more trivial matters like entertainment. Collect several months’ worth of bills, including but not limited to, activities for children, clothing, gifts, hobbies, utilities, cable, Internet, cell phone, medical, day care, pet care, car repair, lawn care, etc., to help determine an accurate figure for your average monthly expenses.

4. Categorize Your Expenses

One of the most important parts of tracking your budget is understanding the differences between fixed, variable, and periodic expenses. Knowing what types of expenses you have can help you track and set the stage for other budgets which you will later develop.

Here’s a breakdown:

Fixed Expenses

These are the expenses that don’t change month-to-month. Your mortgage or rent, real estate taxes, car or other vehicle payments, cell phone payments and insurance are examples of fixed expenses.

They may vary slightly from year-to-year (i.e., rent increase or insurance premium increase/decrease) but overall, you can count on them to stay the same for at least a year at a time.

Variable Expenses

Just as the name says, these are your expenses that will vary month-to-month and are probably the largest spending category. Variable expenses can be broken down further into the categories of necessary and discretionary.

Necessary variable expenses include such things as groceries, gas for your vehicle, utilities, and clothing. Discretionary variable expenses are items that you can spend more or less on at your discretion such as vacations, entertainment, hobbies, spa appointments, etc.

By keeping track of these expenses over time, you can get a better idea of how much you’re spending each month and plan accordingly.

Periodic Expenses

These are the hardest expenses to plan for and the ones most likely to take you by surprise. Periodic expenses include things like annual vehicle registration, car repairs, and gift-giving.

For expenditures you know are going to come up at least once a year, set aside a little bit each month to cover the cost.  Once everything is gathered, total up the cost of every expense and divide by 12. Now take that number and add it to your budget. This is the amount you need to save every month in order to cover your periodic expenses.


While this may seem like a significant undertaking, breaking it down step by step and using the advice I’ve shared can make it much more manageable. The perceived challenge hinges on factors like your spouse’s cooperation, estate size, financial intricacies, and your commitment to a calm and deliberate approach.

Trust me, the effort is well worth the reward. These steps are crucial to prevent post-divorce lifestyle vulnerabilities due to incomplete information and inadequate planning.

Remember, the tips I’ve offered are just initial strides towards establishing the groundwork for your lifestyle budget and subsequent budgets. Enacting these suggestions will aid in devising your savings strategy, charting your course to achievements, and bolstering your confidence as the driving force behind your newfound independence.

Taking one step every day towards your objectives is an empowering practice, one that guides you in making sound financial choices for both yourself and your family.

Karen Chellew

Karen Chellew is Co-Founder of My Divorce Solution. She has worked in the legal field as a paralegal and business manager for over 30 years.

During her career, she served as an affiliated member of the Pennsylvania Bar Association and President Elect of the ALA (Association of Legal Administrators).

Karen now serves clients and the professional team in her role as legal liaison. She is also a certified QDRO Administrator, Founder and President of Sisters U Foundation, and an Auditor of East Rockhill Township.

As the mom of three children and two granddaughters, Karen is extremely passionate about helping women in all that she does.

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