These are the basic steps to creating a post-divorce budget, so that you can gain clarity and control over your financial life as you build your independence.
Set aside two hours to take a detailed look at your finances. Beforehand, prepare your financial documents and login information for your online accounts.
Write down all the things you’d like to accomplish in the next year, and estimate what they’ll cost. These are your short-term goals. Then, consider the bigger picture and record broader goals like retirement or sending your children to college.
List and tally up all sources of money that you regularly receive, including those that may result from your divorce. This includes employment checks, alimony and child support.
Now, list your regular expenditures. This includes fixed expenses like mortgage and utilities, as well as variable expenses, like entertainment and dining out.
With your income and expenses in hand, you can fine-tune your budget, adjusting it to fit your lifestyle and goals. If your income doesn’t cover your spending, start by reviewing your variable expenses.
Make sure you are surrounded by a strong personal and professional support system. This includes accountants and financial professionals, as well as friends and personal advisors.
Now that you’ve created a budget, make sure you have a process for following and adjusting it. Your dream team, combined with budgeting software and other tools, can help you do just that.
The divorce transition hinges on the expertise of the professionals involved. Here is a list of the most important specialists to have in your corner, and the significance of their roles.
It is essential to partner with a legal professional whose integrity you trust and whose expertise you can rely on. It is also important that your legal counsel is in communication with your financial and tax advisors.
Accountants will examine the details of your present-day financial life, and they may be called upon to calculate the taxes on dividing property and the effects of child support and spousal support over a brief period. They may also perform an audit of account activity or to perform forensic accounting functions to help uncover “hidden assets.”
The role of the CFP® professional is to help you achieve their financial goals in the context of the divorce transition and over the long term. They will create financial projections based on certain assumptions and they will keep you moving toward stated objectives.
The role of the CDFA® professional is to help both you and your attorney understand how the financial decisions made today will impact your financial future. These professionals go through intensive training programs focused on the financial issues associated with divorce, so that they can identify and analyze potential issues related to property division, tax, pension plans, matrimonial homes, insurance, settlements, budgeting and lifestyle.
The easiest way to get objective, expert perspectives on today’s most pressing financial topics.