Financial Budgeting is not a mandatory legal requirement, but perhaps it should be. It is one of the most complicated tasks when reaching an agreement and frequently overlooked. Without proper budgeting, most Separation / Divorce Agreements are signed with little regard to the affordability of the Agreement. THIS IS VERY IMPORTANT. Signed agreements frequently break down simply because they weren’t affordable or practical prior to signing.
Budgeting is not a Family Lawyer’s / Attorney’s job. It’s the responsibility each separated party has prior to signing their Separation Agreement. Is this Agreement financially fair and affordable? Costs increase after separation, especially if one of the parties remains in the matrimonial home and the other person now has a new residence.
Your personal financial budget should consider your commitments for Child Support, Children’s Special and Extraordinary Expenses, Spousal Support / Alimony, plus Housing Expenses, Personal Expenses, Transportation costs, Life Insurance and your other daily, weekly, monthly and yearly costs. Make sure you have enough money to buy food and clothes. Most importantly, look after your children appropriately when they’re with you?
Before you sign your Agreement, have you considered what happens if you keep the matrimonial home, you arrange a new mortgage and your ex-gets laid off work? You may hope everything will be great. What if your ex doesn’t pay Child Support or Spousal Support / Alimony, etc.? What do you do? Plan for what you’ve agreed to but always budget for unexpected problems. Have a back-up plan to carry you forward for several months, if possible.
Most separating couples’ future expenses increase by $15,000 – $25,000 per year, or more. This money has to come from somewhere. Budget, budget, budget! Go through your bills, check book, credit card statements, bank statements, etc. Identify how you actually spend money and what your needed expenses are. Try to tighten your financial belt, but also do what you can to help your kids do well in all aspects of life.
When Parents Do Well, Children Do Well