Divorce will alter your lifestyle and it’s crucial to make sure you make a budget that reflects your post-divorce resources and needs. Check out these five steps to budgeting after divorce below.

Step 1: Record Only Your Essential Expenses

Know how much money you need to simply live. This includes things such as rent/mortgage, food, utilities, and gas. None of the extra stuff like a phone bill or Netflix subscription is factored into this calculation.

Step 2: Know How Much Money Is Coming In

Know your net income, not just your gross pay. You may make $100,000 per year, but you do not actually have that much money to spend after taxes, social security, and other things are factored in.

Step 3: Have a Conversation…

This conversation can be with yourself or – even better – with a chosen financial advisor. You can learn to evaluate your expenses and decide which ones are necessary, and which ones are not. Your advisor can hold you accountable for unnecessary expenses and teach you ways to reduce them.

Step 4: Record Any Other Expenses

These are your unnecessary expenses such as going to the movies or going on vacation. Although these expenses are the fun ones, they can cost you a tremendous amount of money. Once you recognize your unnecessary expenses it will be easier to cut them out, or at least reduce them.

Step 5: Create Healthy Spending Habits

Once you have tracked how you spend your money, it will be easier to create healthy spending habits. You will learn to recognize when you are about to make an expense that you don’t need, and therefore save money. For example, if you are an impulse buyer at the grocery store, you can learn how to control those impulses, or at least reduce them.