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Although you can anticipate some financial support from your spouse during and after your divorce, it is a very good idea to make your plan without depending on that source of income. Too often I have seen divorced clients coming back after a few months or years because their spouse has lost the high-paying job that was the basis for the initial alimony award. Evaluate your financial life from the perspective of what it would look like if you received no support whatsoever.
Maintaining two households costs much more than one. Try to have some way to address your financial needs and cover the increased expenses. In particular, evaluate your education and work experience. How old is it? What would you need to do to get more current experience? How much would refresher training at college or an applied technology college cost you?
Based on your anticipated monthly income, figure out a monthly budget based on what you are currently spending in your marriage. One of the purposes of alimony is to help you maintain a similar lifestyle to the one you enjoyed during the marriage. The court is not going to try to put you in a studio apartment if that is not how you lived during the marriage. Likewise, the court will not help you finance a 10,000 square foot home if that was not how you lived while married. You want to create a reasonable plan and expectation based on your current expenditures.
That generally means creating a budget. If you are not working currently, it may be difficult to accurately determine what you can earn on your own, but do not put too much focus on your potential income at this stage. Instead, figure out how much you need to maintain yourself going forward. If you and your spouse regularly saved money towards retirement, or consistently paid extra towards your home, include that in your lifestyle calculation. This initial part is critical in determining what your resources will be after the divorce.
One approach that can be very helpful is to create three different budgets, what I call (1) the Skeleton; (2) the Fat; and (3) the Normal. The Skeleton is just like it sounds, the bare minimum that you need to keep the lights and heat on, food in your belly and clothes on your back. You can think of it as the “worst case” budget, the one you would use if something terrible happened (you got very sick, you lost your job, etc.) The Fat budget is just the opposite of the Skeleton; this budget is how you would spend your funds if you had as much as you needed and wanted every month. The Fat budget could include large vacation or gift savings, or college accounts for your children or grandchildren. The idea is that the Fat budget would feel very luxurious and even a little excessive. Finally, the Normal budget is between the other two. It allows for some luxury and savings, but not as much as in the Fat budget. The Normal budget should allow you to live comfortably, without feeling like you have to watch every penny and bargain for every nickel. The Normal budget should still generally address your “what if” questions so you are not feeling enormous anxiety when you look at it.
Feel free to ask for help with this process. It can be challenging, especially when you are dealing with so many other issues. There are all sorts of information, articles, books and apps that help you create a budget. You can ask friends, neighbors or even us. It helps you feel so much more security knowing what you need and what you have as you move forward through this change in your life.
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