Divorce in MoCo

[Anonymous]

Anonymous wrote:I'm sorry that you are experiencing divorce (since this wasn't your choice).
My thoughts:
1) Ensure that you have an equitable arrangement with DH with daycare/health care expenses included in the mix. Get a good lawyer. Keep track of what you spend on children etc. (e.g. if you're making HSA contributions and then use it for a co-pay that's part of your spending on them). Don't think of this as nickel and diming your kids but rather a way to ensure that they will get the resources they need from both of you--and greater ability for you to preserve your assets to provide stability for them.

2) Figure out how student loans will be handled (talk with lawyer). Are you responsible for any of his? Just yours? Even split?

3) You don't list your retirement contributions. Are those part of what's coming out of your gross pay? If not, that should be set to max out--at your pay level you'll just be paying that in taxes anyway.

4) Don't drop life insurance. The lawyers may have an estimate of what you have to carry. It's not a big expense and it's necessary for your kids' well-being.

5) Don't get cable when you move. Let Amazon Prime/Netflix/Hulu or whatever combo you prefer fill your entertainment needs.

6) Do you have funds for a down payment on a house? If not, you probably can't/shouldn't get a house yet. Rent until you do if you can rent while keeping the daycare. Financial stability provides more stability than a house. It's not a huge deal to switch schools in the early grades if you end up not finding a house where you rent--teaches kids adaptability. Keep your rent under 3K/mo. if you can--the lower the better.

7) Your daycare sounds great--don't try to whittle that away.

8) Look on-line at budgets to see line items you might not be thinking about (cell phones, disability insurance--that's an important one if you don't have it).

Good luck!

Thank you!! This is very helpful

[Anonymous]

Rent in your neighborhood until you don't have to pay daycare expenses and try to save for a down payment and for an emergency fund. This also give you time to pay down student loans and to practice budgeting.

You don't mention savings and you might be shocked by how much home repairs can cost. You need to have a decent rainy day fund for this.

Would agree that disability insurance is a must since you are now the sole earner in your family. Try and get one that covers both short term and long term disability.

Would also agree with PP that you should keep excellent records of how much you spend on your children.

Consider contributing $50 a month to each 529 if you can afford it. It will make you feel better!

At your income level, the tax deduction for retirement contributions would be quite hefty and so you might be able to save more for retirement than you expect.

Look into your tax situation. You are likely to lose the benefit of married filing jointly. I know single rates are very high. Not sure if there is an intermediate rate for people in your situation. Find out as you might find that your take home is less than you expect.

[Anonymous]

I don't understand how you can begin to even figure this out until you know the terms of your divorce:

1) Are you splitting day care costs? Other costs?

2) Will you have to pay him child support?

And probably a million other questions that have financial impact. You don't yet have a realistic sense of what your expenses will be until this is all settled.

[Anonymous]

I think you need to take a year or two and get your bearings. Rent somewhere reasonably priced ($2,000ish) and get the hang of paying your bills and living your new normal. Maybe a condo, townhouse, etc. I’d pause everything and throw every extra penny at the student loans. They are killing you. Your kids are young so rent for 4 years, pay off your loans, and then you’ll have so much more money to buy a long term home. In 5 years you’ll have an extra $3k/Mo between Daycare and loans if you focus right now. Look for a not-updated condo or townhouse to rent in a good/decent elementary school district.

[Anonymous]

Anonymous wrote:I think you need to take a year or two and get your bearings. Rent somewhere reasonably priced ($2,000ish) and get the hang of paying your bills and living your new normal. Maybe a condo, townhouse, etc. I’d pause everything and throw every extra penny at the student loans. They are killing you. Your kids are young so rent for 4 years, pay off your loans, and then you’ll have so much more money to buy a long term home. In 5 years you’ll have an extra $3k/Mo between Daycare and loans if you focus right now. Look for a not-updated condo or townhouse to rent in a good/decent elementary school district.

PP here. Check out this one: https://washingtondc.craigslist.org/mld/apa/d/huge-3br-townhome-pet-lovers/6595867137.html