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Personal Budget Plan

Personal Budget Plan (Photo credit: Wikipedia)

Divorce creates the need to gather and track lots of financial information.

  • Your assets make up one set of financials.
  • Your expenses as you go through the divorce make up another. These may include money that you’ve spent on expenses the you should not have paid.
  • A final set may be based on the budget you may create.

This means that there’s going to be lots of numbers and papers floating around. How do you keep track of all this necessary paperwork during a time when you have so much other things to deal with?

Well some of you may already be using a spreadsheet to track the numbers. Still, you have to take the time to put everything in.

And then some of you may be scanning receipts and other financial documents to keep them all on one place, but you still have to take the time to enter numbers into your spreadsheet.

Wouldn’t it be great if you all you had to do was scan and then have the data automatically be converted to your Excel spreadsheet?

Well, there is — with a PDF to Excel converter.

Now we just heard about this and haven’t tried it ourselves. But it sounds like a great productivity tool and a good way to keep track of all of the financial data that can play a big role in the divorce process.

It seems as if you can buy these converters or get free ones online.

Have any of you tried this type of product? What tools do you use to keep track of financial data?

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Welcome to money-issue Wednesday.

The article we’ve reposted below has some great advice that lots of people don’t realize until it’s too late. Keep your emotions out of the process and pay attention to what it has to say before it’s too late for you and your children.

Managing Finances Through a Divorce
by Andrea Murad

Divorce is a trying time for anyone—especially when children are involved.

The separation process is long and filled with paperwork, especially when it comes to sorting out finances and budgeting for separate households. Experts advise parents strive to maintain their children’s lifestyle during and after the divorce to keep a sense of normalcy and planning a budget for potential custody or child support will help to make the split easier for all parties.

The problem in every divorce is that you have the same income but two households, says Randy Kessler, founding partner of Kessler & Solomiany. “Very few people make enough money to support a child the way they want to.” Lawyers and judges try to fix this problem by determining the minimum amount one parent can accept and the most the other can afford to pay for their children.

“Before you break up, become a better parent—take your kid to school, make them lunch,” says Kessler. Spending time with your kids as well as staying calm and saying nice things about the other parent, will help the custody case process.

Before heading into the legal process, work to create the custody outcome you want, recommends Kessler. If a judge has to make a decision about custody, he or she may keep the parents’ current arrangement. “If they share the child like they would in a divorce, they don’t have to pay a lawyer.”

Understand How Much your Child Costs

Maintaining a child’s lifestyle post-divorce requires parents to negotiate expenses and child support. “Every state has guidelines so a judge has a starting point for child support,” says Kessler. A judge will calculate child support and explain any deviation from the guidelines because of, for example, housing, extreme travel costs, medical needs or tuition for a child requiring extra training because of a learning disability.

Child support can be adjusted up or down after the divorce since a person’s income can change due to a raise or job loss. To avoid future trips back to court, Kessler suggests making payments a percentage of income.

To know how much you spend on your child, review 12 months of bank and credit card statements, says Tracy Stewart, certified public accountant and personal financial specialist in College Station, Texas. “Break down expenses for mom, dad and the children into categories like clothing, groceries, transportation and dining.” Also include summer camp and other activities. For categories like groceries that are shared by family members, figure out each person’s percentage of expenses. Adding up the numbers will help create a baseline for the money spent on your children in the last year.

It’s important to be clear about your expenses and that you’re able to live within a certain budget, says Suzanna de Baca, vice president of wealth strategies at Ameriprise Financial. “In general, the court will ask you for budgets or for you to provide records to help determine the amount of child support payments.”

While you review your child’s expenses, experts suggest examining your budget as a single parent. As a general rule, Jonathan Clements, director of Financial Education for Citibank, suggests keeping fixed costs like housing, utilities, food, insurance and property taxes at 50% of pre-tax income. The great litmus test is whether you can save on a regular basis—if you can’t, your expenses are too high and you’re probably spending too much on housing, says Clements. “You want to live within your income reasonably comfortable. Your finances will spiral out of control if everything is too tight.”

Experts suggest deciding whether you can spend the same amount of money on your children after the divorce. “If [child support] plus your income isn’t enough to maintain your child’s lifestyle, you’ll have to make tradeoffs for your child or yourself,” says de Baca.

Financially Protect Your Children

Consider insurance polices. The parent paying child support should have a life insurance policy, as well as disability insurance, recommends Stewart. The life insurance beneficiary should be the children or structure the policy such that the money is used to raise the children. Disability insurance will replace lost income if the person paying child support becomes disabled.

Negotiate medical costs. “You’ll want to look to the working parent to put the children on their health insurance,” says Stewart. Decide which parent will pay out-of-pocket expenses and how you’re going to pay and reimburse each other.

Prepare for the Future and Begin to Co-Parent 

You’ll have to make joint decisions for your children years after the divorce, says Stewart. In the future, they may have to discuss whether to send a child to summer camp of if a child can get a car, cell phone or tattoo. “You want the parents to be able to come to an agreement on these things in the future years. You cannot predict some expenses at the time of the divorce because you won’t know what can occur in the future.”

“Depending on the divorce situation, your spouse may not want to talk and the judge may decide on guideline support,” says Stewart. Parents who aren’t talking during the divorce may not talk after, which makes for uncomfortable parenting.

Although divorce is enormously upsetting, Clements doesn’t suggest funneling your emotions into the battle over finances—everybody ends up worse in this situation. “You want a reservoir of goodwill because you’ll need to ask your ex to watch the kids. If you have a nasty divorce, a flexible parenting agreement is likely to be impossible.”

Source

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You don’t generally associate “divorce” with “excellent personal finance education.”

Most children of divorced parents might argue that divorce is a terrible, emotionally unpleasant time—particularly where money is concerned.

Read more…

Source: Forbes.com

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  • Never Disregard Your Children’s Feelings:
    Or allow yourself to believe that your children don’t need you in their lives. Don’t ever get to the point that seeing your children is more painful than not seeing them. If you are a non-custodial parent and are dealing with such pain then suck it up. The long-term consequences and negative impact of not having their parent in their lives outweighs the emotional pain you feel. (This is true even though we know that it is hard to do if you are dealing with a problem ex who uses the children as pawns in their plans for revenge. Always think of your children and take the high road no matter how hard it is to do so.)
  • Never Use The Family Court System To Do Battle With An Ex :
    There are adversarial attorneys who will take your last dime and help you use the system to get back at an ex. The need for revenge can be costly and the only one to pay, in the end will be you. (Word of warning for those of you who do…You know who you are.)
  • Never Refuse To Negotiate Or Mediate A Divorce Settlement:
    Negotiation and mediation are about settling the business end of the marriage. Put your emotions aside, take care of the business that needs to be taken care of and then deal with your emotions separately. (In the end you can end off with an even worse settlement and you would have wasted lots of money on legal fees).
  • Never Refuse To Communicate With Your Ex;
    Unless the relationship is abusive if you have children together, you should always be willing to communicate in a civil and respectful manner with your ex. An ex-spouse is not someone to be thrown away as if she/he is nothing more than trash stuck to the bottom of your shoe. If your ex reaches out to you via a phone call, email or in person with a need to discuss an issue pertaining to your divorce and marriage respond with common human decency. To not do so lacks character. (And remember that abuse is not just physical).
  • Never Play The Blame Game:
    Blame or causing anyone else to feel shame just because you are experiencing a negative feeling is unacceptable. Divorce hurts, it hurts all involved. Be as conscientious to the feelings of others as you are to your own feelings. To think you have a monopoly on hurt feelings and have the right to turn your back on others due to that is a narcissistic trait. Do whatever you need to do to keep your emotional pain from turning you into a raging narcissist.
  • Never Be Afraid To Hear The Truth:
    People take sides and at times tell us what they think we want to hear. Get outside, objective opinions on how you are handling the legal and emotional aspects of your divorce. Once you’ve gotten those opinions don’t disregard them just because they are not what you want to hear.
  • Never Believe You Didn’t Play A Role In Marital Problems:
    It takes two to build a relationship and it takes two to destroy one. Don’t tell yourself half-baked stories about who you did everything you could do. Get real with yourself about what happened. Getting real will keep you from getting stuck in a never ending game of blame.
  • Never Make Assumptions:
    Don’t assume your attorney has you covered legally. Don’t assume the judge is going to rule in your favor. Don’t assume your ex is angry and out to destroy you. Know the facts and base your actions on them. It might just keep you from making an ass out of yourself.
  • Never Fall Victim To Your Own Expectations :
    You may expect your ex to be civil and respectful. You may expect your attorney to do his/her job. You may expect your ex to follow the court ordered divorce decree. We don’t always get what we expect so the best thing to do is not expect anything and be willing to deal with what you get. In other words if you have no expectations you can’t be let down.
  • Never Allow Your Emotions To Rule Your Actions:
    If your spouse has left and filed for divorce it is time for you to take action. Don’t sit and cry in your beer hoping they will come back. Get yourself an attorney and do what you need to do to protect yourself legally. There will be plenty of time for crying in your beer later. Plus, if your spouse changes his/her mind they are going to come back no matter what actions you take. If they don’t return at least you will have protected yourself and will, more than likely have money to buy all that beer you will be crying in.
  • Never Pass Up The Opportunity To Forgive:
    An unforgiving heart is the biggest obstacle to moving passed divorce and onto a rich and fulfilling life. If you can’t forgive you will never be able to do anything but make do and suffer the consequences.I’ve written articles on what a person should do if they are going through a divorce. I’ve given information on how to protect your legal interest, how to cope with divorce and how to move onto a new life and new relationship after a divorce.This article is made up of a list of things a person should never do during a divorce. Every thing listed above I’ve seen done over and over by clients and witnessed it in my own experience with divorce. I hope the list helps you recognize any of the behaviors you are exhibiting and that you make needed changes so that your divorce does not turn into a long, drawn out litigious battle.

Original Article by Cathy Meyer

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Welcome to money-issue Wednesday. Could it be that if you knew a few things that your lawyer hasn’t told you for one reason or another you could end up spending less for your divorce? According to Catey Hill in her article “10 Things Divorce Attorneys Won’t Say” the answer is yes. That’s the bad news.

But there is also good news. If you know these things, you can make decisions that really can lower your divorce bill. For example, we know a couple who spent lots of money simply because they kept on fighting over this and that and guess what, every time you start a proceeding that involves the court, you’re going to pay. One of the partners finally caught on and started getting cost estimates beforehand and then realistically looked at two things:

1) The chances of winning
2) The long-term impact.

This analysis ended up saving both parties money.

That’s because the first point made in the article — You’ll pay more than the advertised rate — way more — will turn out to be true unless your lawyer includes the cost of unforeseen disputes and how realistic is it that every possible outcome can be predicted?

We know someone whose lawyer did give a minimum and maximum figure for each action needed. We don’t know if the process could have costs more because seeing the numbers on paper helped the client make very rational decisions. The costs never approached the maximum amount.

We also know of other cases when lawyers told clients that they could fight decisions, but it would cost and the chances of winning were nil.

Number 2: I get sued a lot: We know people who talked a lot about suing their lawyers for all sorts of reason. Overcharging (related to point #1) and not forcing them listen to telling them the truth about their case are the reasons we hear. Some of the reasons are really out of the lawyer’s control. Still as the article states, it is a good idea to check into a lawyer’s reputation before giving them your case.

Number 3: My lack of fiscal know-how will cost you: Now this is something you should already know – especially if you follow our blog. How is a lawyer supposed to know about tax codes and other financial issues that are the domain of other experts? Still people will act as if hiring a divorce lawyer is like one-stop shopping. Everything in one package. If you make this mistake, you only have yourself to blame.

Number 4: I make promises I can’t keep: This definitely isn’t true of all lawyers, but we have heard of cases in which lawyers did make vague statements as mentioned in the article and the other party just kept on spending trying to make the statement true. The thing is though your lawyer can think that you have a good case, but it could be based on distorted information. Or, they may underestimate the other side. Whatever the reason, as in the case mentioned at the beginning of this post, you have the power to say, “enough” when you see how things are going.

Of course the real answer is to get a lawyer who will tell you the truth whether you want to hear it or not and for you to listen to them. Unfortunately, if you aren’t lucky enough to do this at the beginning, you will probably end up wasting spending lots of money.

Number 5: I’ve only handled a couple of divorce cases, ever: Now if you have one of these lawyers, it really is your fault. When you hire a lawyer to get a divorce, make sure you hire a divorce lawyer.

Number 6: Prepare for a plummeting income: Have you heard this joke — Person A, “How did you become a millionaire?”  Person B, “Through my divorce. I used to be a billionaire.”

It’s true. Both sides will face lifestyle changes if the outcome is fair. Knowing this upfront could encourage you to save some of that money you’re spending on legal bills.

Number 7: Go cry somewhere else: Remember the specialists we spoke about? Lawyers aren’t therapists, family members, or your best friends. They may listen to your emotional outbursts (and charge you for the time) but there are people who will do that (some for free) and actually help you deal with the issues as well.

Number 8: You may not even need me: We know lawyers who advised people to come to an agreement, but  we’ve never heard of a lawyer suggesting of paths that didn’t involve them at all if they were an option. We agree with everything said in the article under this point. The final choice is yours if your divorce falls under this category.

Number 9: I don’t have time for you: Ever wonder why your lawyer prefers emails to phone calls? It might not just be because they want a paper trail. Remember that in addition to the staffing issues mentioned in the article, lawyers spend time in court (yes, you aren’t their only case).

Number 10: I’m dragging my feet: Some people swear that this is true. The other side may be dragging their feet for strategic reasons, but if you really think this is the case with your lawyer, get a new lawyer.

Original Article

Learn More About Tracy’s Divorce

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Divorce is one of the most financially traumatic things you can go through. Money spent on getting mad or getting even is money wasted.

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Repost

Dothan, AL (PRWEB) January 31, 2012

Because January has been International Child-Centered Divorce Month, Divorce Tool Box founder and Certified Divorce and Family Mediator Audrey Silcox offers 8 tips good for any month to help parents keep focused on their children before and after a divorce. Her extensive experience in high-conflict cases within the judicial system has shown that parents who do so are much more successful at transitioning into the life of co-parenting. With over a million children affected by divorce in the U.S. each year, Silcox says that child-centered divorce is vital for parents, their children, and society as a whole, both now and in the future.

Read more…

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