As you are going through your divorce, something you are probably constantly pondering about is whether or not you will be able to support yourself and your kids after it’s all said and done. You are probably also wondering how all of these changes will affect your standard of living.
Understanding your cash flow is the first step in putting together your budget. No matter what your money situation looks like, the faster you get organized and begin understanding what’s going on, the faster you can take charge and move on with your life.
For starters we recommend that you download our complimentary “Taking Charge of Your Budget” worksheet here: http://www.cinderventures.com/resources/. When you open the document you will notice that we have you calculate your budget now and after your divorce is finalized. Be realistic about your actual expenses. Rounding down will skew your figures in an un-serving manner for future planning. If you are overwhelmed and don’t know where to begin, get in touch with your financial advisor.
Steps to figuring out your budget:
1. Calculate your income.
2. Calculate your expenses. Remember that it’s important to be accurate with these numbers. Don’t pad your budget hoping for more spousal maintenance or an extra bonus. Be prepared for surprises. Also keep in mind that part of your expenses needs to include your savings.
3. Create a picture of your cash flow by putting your income and expenses together. Net monthly income = total monthly income- total monthly expenses. Positive cash flow is a must so if your net monthly income is negative, go back and review your numbers.
Looking for more advice, resources and worksheets on getting your finances under control during and after your divorce? Check out our guide “A Woman’s Financial Guide to Divorce” that comes as a supplement to our book Cinder Without Her Fella. Written by Carin Thomas