Money after divorce

Living on one income: the first year

Two incomes ran one house. Now one income runs one house, and it is the same house with the same bills until you change something. This page is the first-year budget, in the order the bills actually arrive.

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The rule

Housing under a third

Rent or payment plus taxes, insurance and HOA at or under 30 to 35 percent of take-home pay. Above that, the house is running you.

Support

Count it, then discount it

Maintenance ends; child support ends at 19. Budget as if the end date is next year, because a lender will.

Credit

Your name only

One account, one card, three credit freezes, alerts on the old joint mortgage until it is gone.

Insurance

The month it lapses

Health (COBRA up to 36 months), life to secure support, auto, and an HO-6 or renters policy from day one.

The short answer

Write two budgets before the decree is final: the household now, and yours alone in the home you will actually live in. Housing under a third of take-home pay, support counted only until its end date, one emergency month in cash before anything is spent on furniture. Most first-year problems are a house that fit two incomes carried by one.

The first-year budget, in order

HousingThe payment or rent, taxes, insurance, HOA, utilities and a repair reserve of about 1 percent of the home’s value a year. This is the number that decides whether keeping the house was realistic.

Support and taxesMaintenance is not taxable to the recipient for decrees after 2018 and not deductible to the payer. Child support is neither. Update your W-4 the month the decree is entered; a single filer with one household withholds differently.

InsuranceDivorce is a COBRA event: up to 36 months on the ex’s employer plan at full cost, or the Connect for Health Colorado marketplace with income-based credits. Life insurance on the paying spouse secures support; the decree can require it.

Debt assigned to youCards, the car, the student loan. Pay the ones in your name first; a debt assigned to your ex in the decree still hits your credit if it is in both names.

RetirementRestart contributions the month support starts, even small. The QDRO money is not spending money.

An emergency monthOne month of the new budget in a savings account before anything else. Two by the end of the year.

What people get wrong

Keeping the house for the kids without the number. The kids need stability; they do not need that address. A smaller home in the same school area keeps most of what they care about.
Counting maintenance as permanent. Colorado’s guideline ties it to the marriage length. Plan for the year it ends.
Paying a joint debt you were not assigned to keep the peace, then not being able to prove it.
Furniture before the emergency fund. Every family-law attorney has seen the new-couch-then-late-mortgage sequence.
Not telling the lender the truth about support. They will find the decree. Bring it.

Questions people ask

How much house can I afford on one income?

As a rule, a payment plus taxes, insurance and HOA at 30 to 35 percent of take-home pay, and a lender’s ratio under about 45 percent of gross with all debts. On $75,000 of income that is roughly a $2,000 all-in payment. What counts as income.

Does maintenance count as income for a mortgage?

Yes, with the decree, six months of receipts and three years left to run. If it ends sooner, that portion drops out.

Should I rent for a year?

Often yes. It costs a moving fee and a year of rent; it saves a 30-year decision made in the worst year. Rent or buy.

What help exists in Colorado?

CHFA and metroDPA down-payment help for one-income buyers, the senior property-tax exemption, LEAP for heating bills, Connect for Health Colorado for insurance credits, and 2-1-1 for everything else. Resources.

The next chapter, planned

We help people move from the marital home to the next one every month.

Downsizing after a divorce is not a step down. It is a household that fits one income, one calendar and one set of hands, chosen on purpose. Our team sells the big house, finds the right smaller one, and lines up the lender so the two closings work together.

If the honest answer is to rent for a year first, we say so. Nobody sells you anything.

The sale and the purchase timed together, or a rent-back so you move once

A written budget for the new place with taxes, HOA and utilities, not just the payment

One-income pre-approval with Mike Oswald at Rate, or any lender you choose

Movers, estate-sale and donation contacts who have done this with divorcing clients

Talk to the team

Where to go next

Plain-language education, not advice. Divorce Decisions is published by The Kenna Real Estate Group at Keller Williams DTC, a real estate team. Nothing here is legal, tax, lending or financial advice, and reading it does not create any professional relationship. Colorado law and lender rules change; confirm anything that matters to your case with a licensed Colorado attorney, a tax professional, and your lender. See our full disclaimer.

Call your Colorado divorce agent

Questions about the house, the deed or the decree?

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Call or text 303-955-4220

A live person answers. Not a robot, not a phone tree. Prefer email? homes@kennarealestate.com