Those Pesky Numbers – Your Budget and Your Divorce
There’s a lot written about “divorce planning.” About how to get ready to get divorced and the things you need to do. Close bank accounts, reduce limits on credit cards and make sure that grandmaw’s china is packed away.
All of which is well and good, and maybe even some of it sound advice (maybe). But, in all of the articles I’ve read about divorce planning I’ve noticed one glaring omission – no one ever talks about a budget.
Which is an omission of the worst sort because if you’re planning to be divorced or you have a spouse who is planning to divorce you then one of the very first orders of business should be for you to make a budget.
Simple. You’re about to go from a two income/one household family to a single income/double household family. Income is going to drop but expenses won’t, and unless your name is Bill Gates or Warren Buffet you won’t have limitless income at your disposal.
You need to know how much you will have coming in each month, and how much going out (and where it goes). You need to know how you it takes to get from the first to the last of the month and pay all your bills.
Doing a budget is arguably one of the scariest, yuckiest things a person facing divorce can do. So much so that most just avoid it, and that’s a big mistake. Numbers don’t lie. It’s better to know what’s in store so you can plan to maximize income and minimize expenses, no matter how unnerving it may be.
Here are a couple of hints – do your budget in stages. An hour or so a day over several days is better than trying to white-knuckle it all at one time. Use historical averages (the monthly average over the last year or so) for things like utilities, groceries and clothing. Car and house payments are usually fixed amounts each month.
Be prepared to pare down expenses. I can’t tell you the number of times I’ve asked clients to prepare a monthly budget in advance of a temporary hearing in a divorce case, and what they’ve given me includes “entertainment” expenses of $200.00, $300.00 or even $500.00 a month! Trust me when I say that no judge will be particularly sympathetic to a parent who says he/she “needs” that amount each month to be entertained.
Look at taking a second job to augment income. And don’t forget to include child or spousal support you are likely to receive (your lawyer can give you guidance on the amount).
The bottom line is that no matter how bleak the financial situation may be, it’s always better to know of it than not. Always. Sticking one’s head in the sand is a bad way to approach divorce, financially. And if you’re the one who wants the divorce but your numbers tell you it can’t be afforded, then maybe you’ve found a reason to stay married. And, yes, that does happen. Don’t get divorced to only later discover that you’ve put yourself on the dole.
Grace and peace.