Divorce: Itemizing Your Knowns, Unknowns And Unknown Unknowns For Greater Clarity
Creating and sticking to a budget is difficult enough as is, but when divorce comes into play, budgeting can be a real nightmare. One of the first and most important steps you can take to get your finances in order is to itemize everything — including any expenses about which you remain uncertain.
Known Expenses and Income
This is the easy part of your budget. Make a list of all expenses, debts, and sources of income you know about, using receipts, bills, pay stubs, and canceled checks as documentation. Known expenses may seem minimal now that divorce has thrown everything into disarray, but a few expenses will remain constant. Known expenses may include your student loan bill, or your car loan. Other things (such as mortgage payments) may technically be knowns, even if you aren’t yet sure how you will divide them. List these expenses as well, making room in your budget for the worst-case scenario. At the end of this process, you should have a full understanding of your current financial status, including income, assets, debts, and expenses.
Your Ex’s Known Expenses and Income
Make a separate list indicating what you know of your ex-spouse’s income and expenses — this information can be used to determine potential child support and alimony arrangements. This will also ensure that you are aware if something fishy occurs, such as the sudden disappearance of assets.
The unknowns are expenses you suspect you’ll have, but aren’t quite sure of just yet. These could include alimony, child support, and court costs. Make as realistic of an estimate as possible, using D.C. calculators, forms and charts as a guide. Your attorney can also be a valuable resource as you strive to determine future income and expenses.
Some expenses appear seemingly out of nowhere. Perhaps you lose a source of income you assumed would always be there. Or maybe illness or injury leaves you with an unexpected medical bill. There should be ample room in your budget for these unexpected scenarios. As the well-known cliché suggests, it’s in your best interest to plan for the worst but hope for the best.
Divorce can be financially devastating, so it is important to plan for all possible scenarios. For assistance with the financial aspects of divorce, look to DiPietro Family Law in Washington, D.C.