01 Sep Number Crunching Time
Number Crunching Time
Most of us don’t exactly enjoy creating a personal budget. However, if you are about to begin divorce proceedings, it’s imperative that you take the time to do this now. This is the only way you can accurately judge what your current expenses are and what your future expenses will look like. This is especially important if there are children in the picture.
To start with, you should do your best to create a complete financial picture of what your current financial budget is presently, as a married couple or family with children. After, you should then try to put together a budget that will represent your expenses as a single person/parent.
I would suggest that you start by compiling a list of all your recurring expenses, including property taxes, mortgage and car payments, insurance, utilities, cell phones and anything else that is a fixed monthly or annual amount. You should then add to this, monthly amounts for groceries, clothing and pharmaceutical, gas and/or other transportation costs, and so on.
If you have children, perhaps the most important part of this budget is including all of their costs as this will more than likely represent what is referred to as special expenses. These are all of the extras that are not necessarily covered by child support and are unique to each family. This will have a huge impact on your settlement negotiations and it can be a very unpleasant surprise if they are not properly handled from the very beginning.
These special expenses include things like school tuition if your children attend private school, extra curricular activities, summer camp programs, medical and dental expenses not covered by medicare (braces and psycho-educational testing for example, can be very costly).
Once you have taken the time to think of everything that you can possibly think of and add it to your budget, you will now be armed with the tools you need to move forward. While this process can be a frightening abyss of the unknown for many people, taking these steps will reduce your anxiety and prepare you to move forward with your divorce.
It will also allow you to compare your combined incoming family income to your expenses and determine if you really know how much both you and your spouse are earning and how your expenses are currently being covered.
If at this point the numbers of what’s coming in and what’s going out aren’t adding up, now is the time to meet with a financial expert who can help you navigate this new chapter of your life.
Don’t hesitate to drop me a line if you would like some referrals to financial specialists that can help you with this step!
A budget is more than just a series of numbers on a page; it is an embodiment of our values. - Barack Obama