|
Budgeting - If You Have Not Done it Up Until Now, You Had Better Learn.
It is a big shock to most people how their lifestyle translates into a budget when you have to have two households. It is far more expensive than most folks think to split the household. Lifestyle suffers!
Part of our divorce planning is simple budgeting. We need to help our clients understand how much it is going to cost because they need to know how much they are going to have to cut back on their expenses or increase their income. It is just simple math and you are made agonizingly aware of that dilemma when you sit down and make out a budget. As a coach, not only do we need our client's budget but we would like the other spouses budget too so that we can look at viability of spousal support and how it will affect both parties. Some opposing spouses balk at giving us a budget but they will have to do it anyway for the financial affidavit, so why not make the transaction transparent and give it up front. Once this is explained, we usually have no problem and the budget is forthcoming.
We want our client to be fully prepared for all aspects of the dissolution to make sure that there are as few surprises as possible. Part of divorce planning is - the planning part and a budgets plays a large part in seeing what life will look like after the divorce. Without good planning, disaster is just around the corner for many.
|
|
Top Financial Divorce Mistakes (Part 2)
 In February of 2005, Leah Hoffmann wrote, "Getting a divorce is a
messy business, both personally and financially. Don't be in such a
hurry to reach a settlement that you make these costly financial
mistakes, she states below:"
- Focusing on the present and not the future. Make sure you understand the financial implications of your decisions. Rather than accepting a BMW worth $35,000, for example, consider taking a mutual fund with the same current market value. The car will depreciate; the fund, if chosen wisely, probably won't.
- Forgetting to assess tax. Don't forget to factor in the tax costs of every financial decision you make. For instance, two stock portfolios of seemingly equal dollar value might really be worth completely different amounts, depending on capital gains.
- Overlooking important information. In the struggle to keep your divorce simple, make sure you have information on absolutely everything that will affect your financial future: all assets, investment funds, retirement pensions, and so on.
- Failing to untangle all joint finances. Keep your finances mingled and your financial future could be jeopardized if your former spouse defaults on payments, commits fraud, goes bankrupt, or becomes disabled. You might also be liable for any debt that your spouse has incurred under your name. Make sure you have worked out a way to cut or minimize all financial ties that bind you before the divorce rather than after.
- Failing to take into account the amount of time you'll need to get your career back on track. If you gave up your career when you got married, it probably won't be easy to jump back into the workforce. Don't be surprised when the costs - both financially and emotionally - of resuming your old business turn out to be greater than you thought.
Link to Part 1 of this series
|
If you would like to have a speaker for your Rotary, Kiwanis, Lion's Clubs or your networking group, send me an email or give me a call and I can get the particulars.
|
