calculating living expenses during divorce
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How to Calculate Living Expenses During Divorce

Get ready to calculate — living expenses, that is.

During divorce, a lot of financial examination takes place so your lawyer or Certified Divorce Financial Analyst can help you divide assets and determine any child or spousal support. As part of this process, you will need to fill out a Financial Affidavit, which contains an accurate picture of your income, expenses, assets, and liabilities.

One area of this form is the section for living expenses. Generally, you’ll figure out how much you spend and need to live each month. This can be an onerous task, but here are some hints and tips to make sure yours is done right:

    • Fill it out for an entire year, so you don’t miss items that you only pay once per year.
    • Keep in mind there are 4.3 weeks per month, not 4. Otherwise, you will likely underestimate your expenses.
    • The best sources of information include: bank statements, canceled checks, year-end summaries, and credit card statements.
    • You can calculate your monthly living expenses by hand, but you might consider using an Excel spreadsheet or money-management software to help.
calculating living expenses during divorce
Calculating living expenses can be difficult. Photo by photosteve101.
  • Chart expenses by category to make sure you don’t miss anything.

Need more help? Below is a step-by-step list of how to create your living expenses list.

Steps to Calculate Living Expenses

  1. Start with the easy things that have a fixed monthly cost: mortgage, home and car insurance, life insurance, real estate taxes, bills such as cable or Internet, car payment, and anything else you pay each month at a fixed rate.
  2. Then you can move on to anything you pay weekly or that you can calculate by the week. This includes groceries, services such as lawn care or housekeeping, dry cleaners, gas for your car, parking, cabs, tolls, or other travel expenses such as subway/metro fares. You can also include dining out, your children’s allowance, tutors, and child care. Don’t forget: there are 4.3 weeks per month.
  3. Next, call service providers to get an annual figure for your utilities and other expenses. Once you have the annual number, you can divide it by 12. Such areas are: gas, electric and water companies, your car dealership or car repair shop for maintenance and repairs, the veterinarian, your doctor, and gym or health club.
  4. Next up is estimations. Estimate how much you spend on the following: clothing/shoes/accessories, home repairs and maintenance, newspapers or other subscriptions (including electronic), gifts, donations, vacations, entertainment, etc. Take notes of how you estimated these so you remember later.
  5. Finally, you’ll review it with your lawyer or financial adviser and figure out your gross monthly number. Note: the final monthly figure does not include any taxes you are responsible for paying.

Not sure about something? If information is not available or is solely in your spouse’s control, add the word “preliminary” to your statement and be sure to put as many notes as you can to explain missing or incomplete items.

Other Living Expenses

The steps above should cover most of what you have, but it’s easy to overlook things. Be sure you don’t leave out the following:

  • Cell phone costs
  • Satellite radio
  • Expenses for a second home/vacation home
  • Expenses you pay for a parent
  • Continuing education or certification renewals.
  • Cash withdrawals
  • Pet expenses not included in vet bills, such as boarding
  • Therapists
  • Membership dues

Much of this information provided by Divorce Magazine.

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