Jul 26, 2022
Why Should I Create a Budget?
Divorce and Finances
At the Alpha Center, many of clients want to know why they should bother to prepare a budget when they commence their divorce. Most divorces contemplate that a second household will be created. When and how that is done is a major component of the financial settlement.
Debbie Y. Schneider, Esq., an Attorney at Alpha Center for Divorce Mediation talks about why her clients need to consider to prepare a budget when they commence their divorce.
In our mediation practice at the Alpha Center, the creation of a budget is a step that we support and encourage. We have a detailed budget form, both on paper and electronically. We ask our clients to start by figuring out what they are presently spending to support their primary household. Some people know exactly what they spend out of their budget for everything, right down to the expenditures for paper towels in the kitchen. Many more people do not have a precise understanding of their spending habits; they just know that money comes in and it goes out. We also highly recommend that our couples create a budget reflecting the expenses for their children.
Once they have a clear understanding of where their money goes, then we ask them to move to a second budget. If the marital residence is being sold, then both parties need to budget for a new residence. If one of them is staying in the marital home, then that person’s task is to adjust the spending that is already happening in order to accommodate the second household.
For the person leaving the marital residence, figuring out a budget for a new residence is probably the hardest task of all. But creation of the budgets leads to many important decisions, such as where do I want to live; do I want to buy or rent; and the all-important question of what can I afford?
Often our clients at the Alpha Center find the creation of budgets to be empowering. They realize that they can make their cash flow work every month; they will be able to afford to live, and most importantly, they will have a life after their divorce.
Alpha Center for Divorce Mediation