What is a Divorce Budget, and Why is it Important?

What is a Divorce Budget, and Why is it Important?

Divorce happens. The Michigan Department of Health & Human Services (MDCH) reports that there were 20,759 divorces filed in the state in 2020. Although it is common, ending a marriage can be challenging. There are many issues that need to be addressed and resolved―including finances. 

By proactively creating and maintaining a budget during your divorce, you can help to protect your financial interests. Within this blog post, our Michigan divorce lawyers explain what a divorce budget is and why it is so important to have one if you are going through a separation. 

What is a Budget for a Divorce?

As defined broadly by Consumer.gov, a budget is simply a “plan you write down to decide how you will spend your money each month.” Budgeting is about giving you the tools and information to effectively manage your finances. A divorce budget is a transition budget to help you navigate the separation and to put you in the best financial position to move to post-divorce life. 

The Benefits of Divorce Budgeting

Some people put a lot of effort into budgeting. They have a well-maintained financial record. Many other people have a “loose” budget or no written plan at all. Regardless of the situation that you find yourself in, there are many advantages to creating a comprehensive divorce budget. Some of the notable benefits of a budget for your divorce include: 

• A more clear picture of the documents and records that you will need to gather; 
• A determination of the current state of your finances; and
• Ability to identify each party’s costs to reduce the risk of conflict during the divorce. 

An Overview of Financial Documents and Records

A budget for divorce is only useful to the extent that it is comprehensive, up-to-date, and fully accurate. You should carefully gather, organize, and review all relevant financial documents and records related to yourself, your family, and your spouse. Among other things, this includes: 

• Recent pay stubs; 
• Tax information; 
• Bank statements; 
• Retirement/investment account statements; 
• Monthly expenses; and
• Any other material financial information. 

The bottom line is that the more financial documentation that you have, the easier it will be to build a budget for your divorce that actually works. A well-constructed divorce budget can reduce the risk of serious conflict and put you in the best position to protect your personal financial interests. 

Contact Our Michigan Divorce Attorney for Guidance and Support

At Iafrate & Salassa, P.C., our Michigan divorce attorneys possess the professional skills and family law experience to protect your rights and interests. If you have any specific concerns about divorce budgeting, we are available to help. Contact us today for an initial confidential appointment. Our divorce lawyers represent clients throughout Michigan.