A Fresh Start in the New Year: Financial Considerations When Separating

January 20, 2021

To get started on a no-fault divorce, you and your spouse have to separate. North Carolina law requires that spouses live apart from each other for 365 days, which means paying for two households for at least a year.

The divorce attorneys at Breeden Law Office are here to help you navigate the financial aspects of separation. We will get you started creating a budget – whether you are staying in your home or moving – and saving up for the divorce proceedings’ costs.

To learn more, contact us online or call (919) 661-4970. We will set up your initial consultation right away.

Know Your Budget

Before you and your spouse separate, you need to calculate your budget. You might not need to know your finances down to the penny, but you should know how much you bring in, how much you pay in monthly or quarterly bills, and how much you can save.

It is not unusual for someone to contact our firm and not know these amounts. Your spouse or partner may have handled the monthly bill payments, leaving you unaware of your typical water bill. You might buy groceries without thinking of the cost. But on one income, you need to know how much it costs to feed you and your children.

Here are the basic things you need to know to calculate your budget:

  • Monthly income after taxes
  • Rent/mortgage
  • Utilities (water, gas, electricity, garbage, recycling, waste)
  • Phone
  • Internet
  • Renter’s/homeowner’s insurance
  • Auto insurance
  • Other transportation
  • Medical expenses (doctor’s visits, prescriptions)
  • Groceries
  • Debt payments (credit card, auto loan, medical, student loans)

Do you have other monthly, quarterly, or annual expenses? Consider the luxuries you and your spouse might pay for, like magazine subscriptions or streaming services. Will your child have school or sports fees in the next year?

When calculating your budget, be honest about what is a necessity versus a luxury. Like many people in North Carolina, you might be living paycheck to paycheck. During a separation, you may have to tighten your belt to afford a household on your own.

Are You Staying or Moving?

You have to decide whether you are staying in your current residence or moving out. If you remain in your current place, you have to know how much all the bills cost. Can you afford it on your own?

If you choose to go, you have to calculate how much you can afford in rent and utilities. Don’t forget to look at other expenses, such as any parking fees, pet fees, and renter’s insurance. You also need to budget for buying new furniture and necessities for your new home.

North Carolina has a housing shortage. There are not many rental properties to choose from, which means you may have to prepare to pay more in rent than you prefer. Preparing your budget ahead of time can help you save up for your deposit and first month’s rent.

How Much Does Your Spouse Make?

Another financial consideration during separation is how much your spouse earns. It matters if there is a significant disparity between your incomes. Your spouse might be able to comfortably pay for their household while you struggle to pay the bills.

If your partner earns a lot more than you, talk with a lawyer about pursuing spousal support (alimony) during a separation. You and your spouse can enter into a separation agreement that outlines how you will share the two residences’ costs.

Child Custody and Child Support

If you and your spouse share children, you have to consider who they will live with and who will pay child support. We highly recommend talking with an attorney about how to calculate child support during a separation.

It is crucial to figure out who the children will live with a majority of the time or if you will split their time 50/50. This decision influences the size of the apartment or house you need to rent.

Preparing for child support is essential for your budget. Knowing you will receive child support can help you pay your bills. Or knowing you will have to pay child support influences how much rent and utilities you can afford.

Protect Your Assets

As you establish two separate households, you have to consider your marital property and how you will protect valuable assets. Once you file for divorce, you and your spouse decide – or ask the court – how to divide your shared assets and debts fairly. North Carolina calls for the equitable distribution of the estate, which may not be 50/50.

During your year-long separation, you want your assets to retain their value. That means you need your family home to be maintained or, if something breaks, repaired. You need to prevent your savings, retirement, and investment accounts from being drained.

We highly recommend talking with a divorce lawyer about protecting your assets during your separation, mainly if you are worried about your spouse’s spending or motives.

Contact a North Carolina Divorce Lawyer Today

If you are contemplating separation and divorce, call Breeden Law Office at (919) 661-4970 today. Or you can use our online form to request a consultation. We will help you prepare to separate from your spouse.

 
 

Divorce In North Carolina: What You Need To Know

A book by Jonathan Breeden

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