As a couple, you need to have an understanding between the two of you as to how you will manage your money, cover expenses, accumulate savings and plan for the future.
In a divorce situation, dividing up and sharing assets is also an exercise in planning for the future. An amount of money that was sufficient for a family living under one roof may not be sufficient to finance a family now living under two separate roofs.
As I help couples come to terms with their financial planning, one of the first questions I ask is if they know how much they actually spend on living. Some people know, others guess, most have a vague idea. Some focus on their pre-tax income and don’t want to really face that the available spending money is actually post-tax, which often puts them in a position of using credit cards, increasing their negative balances and debt. Some may think they need $80,000 to live on, but they will soon realize that, in fact to net $80,000, they need to earn 30% or 40% more than that, depending on their tax bracket.
A necessary, and yes, very burdensome exercise, is preparing budgets. The budget is not necessarily about what you are spending today, but rather projects what you may need to have available tomorrow once you are living separately.
More often than not, people are surprised when they add up all the numbers to find out that the total is higher than what they anticipated, and it is often painful to face. Sure, it may be tempting to just “wing it” and try to make do as paychecks come in, and/or deal with expenses as they come up, but wouldn’t it be better to have a plan and know where you are going?
If making a budget is too stressful to do by yourself, your mediator will help you, so that you can start this new phase of your life better prepared. Scary? Yes, but as they say, knowledge is power, and once the budget is all done, you will feel more in control of this aspect of your life.
Need some help with your budget? Feel free to call me. I will hold your hand through the process, help you complete it and feel more empowered.
Have any helpful budgeting tips? Please share them in the “leave a reply” box below.
Comments From Social Media
Harsh reality you aren’t kidding. Many times clients are amazed at the reality of the situation and sometimes even brought to tears after doing a budget. Little expenses and purchases here and there add up and boy they can add up big time. Maintaining and managing your own home is not easy, for many they forget the contributions the other partner made, such as the husband or handyman who could fix the leaky faucet, repair broken appliances, hook up the new light fixture. Now these tasks may need to be contracted out to an outsider at a cost that must be accounted for (unless of course, you wish to tackle them yourself). Extra costs are coming in at every turn so the importance of this post separation budget is critical for both parties in helping each other understand how things are going to work out and where concessions and negotiations need to be made so that together they can get through it. Getting comfortable in a new normal and making the lifestyle changes necessary to plan and build a new life is not easy. Never underestimate the help of a financial divorce professional in this process, they may help you understand a bad choice and give you the tools to negotiate a better one. thanks for sharing Jennifer
jennifer safian. divorce and family mediator divorce and family mediation upper east side of manhattan (nyc) new york, ny (212) 472-8626 firstname.lastname@example.org connect on