Be Sure to Budget for AFTER the Divorce
A realistic post-divorce budget, based on present expenses, spousal support, debt repayment, and/or child support, helps divorced people steer clear of the financial wreckage that so often follows a divorce. Developing a budget during the divorce process helps a person set priorities during a divorce.
Many divorcing spouses seriously underestimate their living expenses when they produce their initial budget for temporary alimony (also referred to as “maintenance”), and later find that they aren’t able to cover all of their bills. One of the most common mistakes made post-divorce is the failure to budget based on one's new lifestyle. This is where the family home becomes a dead weight. One spouse keeps the house for the sake of the children or perhaps due to an emotional attachment. Because of the house’s high value, there are few other assets awarded in the settlement. The expense of maintaining the house and the lack of liquid assets often results in a rapid depletion of cash, leaving no choice but to sell the home.
A Certified Divorce Financial Analyst can project several years into the future and determine an individual’s solvency to support a lifestyle into the retirement years.
This analysis should be completed prior to a settlement because that gives a party time to request more assets, alimony or child support.
Useful Online Tools
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Resources & Tools
DIVORCE AND LIVING EXPENSES – The parents must consider the cost of living, including extracurricular activities and daycare and even transportation. Some state courts allow these expenses to be negotiated into the amount of child support paid.
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Basic Principles of Law for Construing Separation Agreements
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