How do I budget for a single income?

Going from partnered to single might mean that you have less income than before.
This deficit may feel like adding insult to injury, but cutting back doesn't have to be a punishment. Creating a budget — and sticking to it — is a way to take good care of yourself and your family.

Know your income
First, you have to know your income. That could be more than just your paycheck. Use a spreadsheet to record all your income sources. Remember to include everything that’s applicable:

• Your paycheck  

• Regular spousal or child support payments

• Social Security payments

• Income from real estate or other investments

• Any other income, such as residuals or licensing fees

If you have any lump-sum payments, like equity from a home sale, you can talk to your financial professional to come up with the best strategy for this money.

Need to have vs. nice to have
Once you have your income recorded, it’s time to take a look at your spending. Grab a highlighter and your bank statement and highlight all your “need to haves.” Then you’ll have to be honest with yourself about cutting back. 

Spending less may feel extra hard if you have children. But racking up debt to support your old lifestyle isn’t sustainable. Take this time to establish new family traditions, like making pizza at home instead of going out. Or take a “staycation” and explore your hometown during a school break.

When it comes to your own lifestyle, you may be tempted to slash all personal luxuries. But be sure to make time to care for yourself. Even if your budget is tight, you can find free events at your library, enjoy admission-free museum days and spend time at neighborhood cafes, catching up with friends over coffee. 

What about health insurance?
If you or your children were covered under your former partner’s insurance, you’ll have about 60 days to switch to your own. If your former partner was on your insurance, you have about the same amount of time to remove them. One less person to cover may save you some money too.

If you and your children are left uninsured, you’ll have to find health insurance on your own. Do your research because you might qualify for a lower cost policy.

Remember your retirement

If you were married and your former spouse had a retirement fund, you may be entitled to a portion of the contributions they made while you were married. Generally, a spouse may be entitled to a portion of the contributions made while married. And if you’re the one with the bigger retirement account, you may owe a portion to your former spouse. 

Whether you’re the one gaining or losing a share of your retirement savings, you still need to save for retirement. When you’re creating your budget, remember to include a space for pretax retirement contributions. 

Another way to have more: Make more

When was the last time you got a raise? A life change like a divorce can be a motivator to make bigger, more positive changes for yourself. If your responsibilities and value to the company have increased, make a list of your accomplishments and schedule a talk with your manager.