The process of divorce is draining in more ways than one – in addition to the obvious emotional duress, you must also deal with logistical details (who gets the house, who takes care of the kids when, etc), and financial issues.
Unfortunately, many individuals in this situation fail to pay enough attention to important issues. One area that is often neglected is the importance of knowing your numbers. Understanding your financial needs is important both to determining a fair settlement and to planning for life after the divorce is finalized.
Blogger Nancy Hetrick shares valuable information regarding the importance of budgeting:
Do you have a budget? No, I mean a REAL, detailed budget that includes taxes and inflation projections? No? Well join the club. If you don’t have a firm grasp on what your projected spending is going to be, how will you ever begin to know if the divorce settlement will cover your needs? The first step to ensuring your financial dignity is to do a budget. Some people find it helpful to just track spending for one or two months. […]
Were you getting health insurance through your spouse’s employer? You’ll be able to stay on that plan for 36 months using COBRA, but you’ll have to pay for that yourself. Are you going to need to go back to school to get some more training or education? Will your children have needs as they get older and are involved in more activities? Where will you live? Will there be maintenance costs? How much longer will your current car last?
Of course, when you’re going through a divorce, the last thing you want to do is spend time dealing with these types of details. But the importance of understanding your financial needs can’t be overstated. Understanding how much money you will need in order to maintain your standard of living is essential while negotiating your settlement—and while planning for your future.
If you’d like to learn more about planning for the financial fallout of divorce, or if you’d like help with this process, please contact us today!