Divorce – How Budgeting Helps You Prepare

Even with the high rate of divorce in Canada, approximately 40 percent of first marriages end in divorce, few people are prepared for the emotional and financial impact. The sudden realization that your marriage is over and life as a couple is about to end can be emotionally devastating, but you also must deal with living on only one income after years of being a two-income household.

It is essential to get a firm grasp on what your income, expenses and available financial resources will be after the divorce is finalized. Setting up a budget now rather than waiting until later is an excellent way to ensure you will not struggle when living on one income.

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When should you get started?

The best time to prepare a post-divorce budget is as soon as you know your relationship with your spouse is over. You might never have felt the need for a budget, but it can help to lessen the financial impact associated with setting up a household and managing to pay your bills on a reduced income. It also provides your divorce lawyer with guidance about your anticipated income, expenses and financial needs that could be useful when negotiating spousal support, child support and the other economic issues arising in a divorce.

Put emotions aside

Emotional upheaval is what people usually associate with the divorce process, and they are correct in many instances. Sitting down to prepare a budget is when you must put the emotions and your feelings about your spouse aside and think only in terms of income, expenses and assets. While you’re at it, you should also forego dwelling on how you and your spouse lived as a couple. Remember, you had two incomes as a couple and each of you must now learn how to live on a single income.

Sources of income

Take into account all sources of income you expect to have available to you in the future. These might include the following:

  • Wages and salary
  • Pension income
  • Child support
  • Spousal support

Be realistic about your income. Do not include overtime or bonus payments unless they are guaranteed.


The household expenses you had while married are about to change, so you need to project what you believe your post-divorce expenses will be. For example, housing becomes a factor whether

you plan to remain in the matrimonial home or buy or rent your own place. As with your income, it is essential that you be realistic about your expenses to get an accurate picture of what your financial future looks like.

The expenses you anticipate incurring after the divorce help your lawyer determine if a spousal support is available. Spousal support under the Divorce Act could be available if your income puts you at an economic disadvantage from your spouse, or it could become an expense item if you are the one ordered to pay it.

Spousal support is intended to balance the inequities in income particularly in those situations in which one spouse remained at home or sacrificed his or her earning ability to allow the other spouse to pursue a higher paying career.

A family lawyer can help

Gathering the financial records you need to create a post-divorce budget will also provide you with the documentation your lawyer needs to obtain a favorable settlement of the financial issues associated with a divorce. Discussing spousal support, child support and the division of marital assets with your lawyer helps to provide information you can use in preparing the budget.