Only the Baddest Babes Budget
Dreading that budget? Trust us, we get it! We’ve been there. Budgeting can be time consuming and is definitely not fun, but it’s also one of the most important financial habits you can adopt.
However, if you’ve never lived on a budget, or haven’t experienced all the benefits that budgeting has to offer, it’s easy to wonder why it’s such a prominent aspect of post-divorce financial planning.
In short, budgeting is important because it helps control your spending, track your expenses, and save more money. Additionally, budgeting can help you make strong financial decisions, get out of debt, and stay focused on your long-term financial goals, post-divorce.
So, yes, while budgeting is definitely not sexy, it’s critical for long-term financial success! To make your budgeting journey easier, we suggest you set aside two things: your emotions and the past. Instead of thinking about how a budget may limit your finances, we encourage you to think of budgeting as an opportunity to look straight into the present and plan for the future. If necessary, remind yourself that budget numbers are not about where you have been, but where you want to go. After all, you’re a bad babe!
“Budgeting helps you identify—and create—the lifestyle of your dreams. ”
Your goal is not to simply survive your divorce but thrive once it’s finalized. If you don’t know what’s coming in or going out, you can’t make a good case for maintenance.
Our goal is to help you master your divorce. We’re here to make sure you’re the Queen of the playing field. A well-documented budget proves without a doubt what standard of living was maintained during your marriage. Plus, a detailed budget helps you realistically set goals and theorize approaches to how you can live solely on your own income.
When it comes to addressing monthly budgets, there are three methods you can use.
Method #1: Monthly Income and Cash Flow
This method is useful for calculating your monthly expenses and how much income each party makes. The goal here is to ensure that both spouses have enough money to cover their expenses and taxes once they are on their own. Say, for instance, that historically your family has about $5,000 of after-tax monthly cash flow available for spending. Given this amount, it would seem pretty unrealistic for one party to budget $4,000 solely for themselves, right?
Method #2: Bank Statement Analysis
Do you pay your expenses from more than one bank account? You’re not alone. It’s become common for spouses to maintain separate bank accounts or have one joint account for family expenses. By tracking and totaling general withdrawals of funds on a monthly basis, you can determine your total spending on an aggregate basis.
Method #3: Detailed Spending Analysis
A detailed spending analysis results in taking every bank statement and every credit card statement and allocating each check and charge into an expense category. While this method is the most time-consuming to prepare, it’s also the most detailed. Which means that any financial questions that arise can be quickly answered due to your dedication to a complete and accurate spending history. When you’re trying to determine maintenance, keep in mind that the intention behind these methods is to identify what you have to spend to meet your needs. After needs have been met, then attention can be given to your wants.
“Creating financial micro-moments are key to a great money mindset.”
Creating financial micro-moments are key to a great money mindset.
Your first question might be, “What ARE micro moments?” Well, micro-moments are moments where you either act on a need to learn something, discover something, or do something. The first step in taking control of your financial future is to understand who you are today—and who you want to be tomorrow. Building a budget not only helps you figure out what maintenance you deserve post-divorce, but also how you can get to where you need to be.
The mindset you have around money has the power to shape everything you believe surrounding your wealth. It has the power to dictate how much you spend and save, how you manage debt, how much money you give away, and your ability to invest with confidence.
By looking for and intentionally creating financial micro-moments every day, you can identify ways to influence the thoughts, feelings, and actions surrounding money.
What does it look like when you imagine an incredible life for you or your family? While budgeting might seem like a long, complex process, at the most basic level budgeting refers to how much you earn vs. how much you spend. That’s it! It’s as simple as that. Budgeting helps you identify—and create—the lifestyle of your dreams.
To get started on your budget, consider the steps below:
List your current income and expenses. Don’t worry if you can’t think of everything. You’ll refine your budget as you go
Get tracking. Tracking income and expenses gives you a firm handle on where your money comes from and where it goes.
Think creatively. If your expenses exceed your income, think about ways you can increase your income and decrease expenses.
Draw up a budget and follow it! You’ll soon start seeing patterns in how you spend your money, so set monthly targets for your spending that align with your financial goals.
Revise as necessary. Don’t give up if you can’t seem to meet your budget. Go ahead and make adjustments. The goal is to create a realistic budget that works for you.
Pay Yourself. Even if you can only afford a few dollars each week, put aside some of your budget for savings, especially if you don’t have ready cash available for an emergency.
Your budget will be critical in negotiating your finances and there will probably be several versions of your budget that take into account various financial possibilities.
But you know what? By putting a strong financial strategy in place, you’re giving yourself the freedom to live the life you’ve dreamed of. So, go ahead and take the first step and get in touch!
Talking with a Certified Divorce Financial Analyst® can better prepare you by doing a thorough analysis of your finances and creating a budget that allows you to start chasing the lifestyle of your dreams.
Get Your Clarity On, Girlfriend!
Feeling a bit lost in the divorce chaos? I’ve got you covered. Dive into my FREE Masterclass, and I’ll help you peel away the confusion. You’ll learn how to confidently strut through those looming financial decisions without a doubt in your fabulous mind. 💅
