Separation or Divorce – Finances

How Does The Budget Look Once We Are Separated?

Good question!  One of the biggest concerns when contemplating a separation or divorce has to do with finances.  How are we going to afford to live separately and apart?  Some couples have already thought it through and considered it to some degree, but there are many seemingly inconsequential details that have to be taken into consideration.

I believe that before we can move forward in any meaningful way, one of the most important things to be done is to fill out, what I refer to as, a post-separation budget form.

I have a form that I give to my couples at the first session in preparation for the next session.  We walk through it together prior to them filling it out to give them some things to think about since they may be doing some projections.  For example, the housing and utility costs for both of them once they are living apart – what is that going to look like?  How will they split the credit card debt, if any?  What about unreimbursed medical expenses for the children like co-pays and dental (if not on their plan)?  All of these things need to be accounted for and included in their respective budgets. The main line items (and of course, in much more detail on the budget form) are:

The Budget

• Housing (mortgage, rent, taxes, insurance, etc.)
• Utilities (gas, electric, phone, cable, internet service, etc.)
• Household maintenance (house cleaning, repairs, pest control, etc.)
• Food (groceries, take out, pet food, etc.)
• Clothing (including dry cleaning, outside laundry if applicable, etc.)
• Auto expenses (payments, gas, maintenance, tolls, etc.)
• Health Insurance (co-pays, optical, dental, prescriptions, etc.)
• Insurances (life, disability, etc.)
• Loans and credit cards (student loans, etc.)
• Educational expenses (private school, college)
• Children’s expenses (child care, tutoring, sports, etc.)
• Recreation (vacations, eating out, hobbies, gym memberships, etc.)
• Personal care (haircuts, cosmetics, etc.)
• Miscellaneous (holiday and birthday gifts, charitable contributions, etc.)

Once these items are clarified and quantified, we can get a better picture of what the monthly needs are for both parties and open up a meaningful conversation on the best way to move forward.