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5 budget issues that can destroy post-divorce finances

On Behalf of | Apr 9, 2024 | Divorce |

There is no question that divorce is expensive, and a healthy post-divorce life requires a careful budget. However, many divorced people fail to anticipate a few common “budget busters” that can derail their carefully laid financial plans.

Here are some key expenses to keep in mind:

Moving costs

If you’re relocating after your divorce, get prepared for sticker shock. On average, a local move can cost anywhere between $879 and $2544, while cross-country moving services can cost $10,000 or more. The price goes up if you need someone to do the packing for you.

Security deposits

If you’re moving to a rental, you need to be prepared to hand over first and last month’s rent, plus any security deposit that your new landlord requires. You may also have to pay pet fees, if you intend on taking any animals with you.

Utility deposits

More than likely, you’ll have to put down a hefty deposit on all your new utilities. While that money will eventually come off your bills, it can be a painful out-of-pocket cost when you’re trying to restart your life.

Refinancing costs

As part of your divorce agreement, you may be required to refinance a car, credit cards or loans into your own name – and that costs money. Since you now only have one income, you may find that banks consider you a bigger credit risk, and that means your interest rate will be higher. That can make the resulting payments bigger than you initially anticipated.

Tax changes

You probably need to adjust your tax withholding with your employer to reflect your new marital situation. You also need to understand how any spousal support will affect your taxes. That change can take a bite out of your monthly budget.

Planning for divorce takes a lot of foresight and skill, and it’s always easier when you have experienced legal guidance by your side.