Why do I need a budget?

An accurate budget is critical during a divorce. Not only is it a useful tool in transitioning to your new life as a single person, a well-crafted and accurate budget comes into play during divorce proceedings, such as:

  • Determining how much interim support you may need while the divorce is pending;
  • Assessing how much alimony you may be entitled to; or
  • Figuring out how much alimony you can afford to pay.

Below are some general guidelines other clients have found useful. However, for advice and counsel specific to your unique situation, please call Aasen Law Office at 605-390-0999.

GETTING STARTED

You will have three main types of expenses for your budget: (1) actual expenses (fixed monthly payments, like mortgages, rent, car payments, etc.); (1) estimated expenses (fluctuating expenses, like food, gas, etc.); (3) proposed expenses (usually an expense you didn't have before, but now need because of the separation, like child care).

Each of these types of expenses will require different sorts of documentation. Too often, divorce proceedings are a "he said/she said" affair. To avoid this (and enhance your credibility along the way), documentation supporting each expense item is required.

Accordingly, for actual expenses, you should provide a copy of the latest invoice or receipt for the item in question. For estimated expenses, the best way is to tally up a year's worth of these expenses (as reflected in your bank or credit card statements) and divide by 12. For proposed expenses, any documents not created by you, such as a contract, your first invoice, or proposal will suffice.

We realize this can be a lot of work. Trust us, it will pay off in the end.

MONTHLY EXPENSES

Below is a checklist for expenses typically found in a budget. Fill out the items applicable to you, and attach your supporting documentation.

Monthly Housing Expenses

• Mortgage payment: ___________/month.

• Property taxes: __________/month (this is assessed yearly, just prorate it)

• Property/homeowners insurance: _______/month.

• Repairs: ______/month. Think back over the last year as to what projects have been done in and around the house. Think also of when you've had to call in a plumber or electrician to do minor repairs. Look around and see what else might come due.

• Maintenance: ______/month. In addition to lawn and garden services, what else requires maintaining? For example, you will need gutters cleaned out every year, windows cleaned inside and out, perhaps fireplace maintenance? Also, do you hire a lawn service, like Warne, to apply chemicals and aerate the grounds on a quarterly basis? Do you have an underground sprinkler system, which requires yearly maintenance? How much do you spend each year to buy plantings/flowers/mulch? How about other landscaping services, such as Spring and Fall cleanup? How often do you have the carpets and/or upholstery cleaned?

Monthly Household Expenses

• Electric: _____/month. Ideally, you would want the average over a 12-month period (because typically, electric costs are higher in the summer due to air conditioning). Your power company can give you this information – just tell them you are putting together a budget and want to know how much the electric bills have run for your house.

• Gas: ___/month. Same thing as above, I assume you get gas from MDU. They can help you pull together a monthly average.

• TV/Cable:_____/month.

• Internet/phone:______/month

• Water/sewage/trash: ____/month. Again, this figure will vary monthly, as your water bills likely increase in the summer months when you water the lawn. The City can assist you in getting this information.

• Household goods: ____/month. This would include replacement of everyday items, like sheets, towels, dishes, etc. Also look around and see what furniture or appliances will need replacing in the next year.

Auto Expenses

• Gas: ____/month. Don't forget to account for times when your gas bill goes up due to road trips or out-of-town travel.

• Insurance:___/month.

• Maintenance: ____/month. This includes car washes and detailing (which add up), oil changes, annual maintenance checkups.

Personal Expenses

Your past banking and credit card statements should be a good source for this. Again, it's best to review your expenditures throughout the year and come up with a monthly average. It does not need to be exact to the penny, but should your efforts should represent a good-faith estimation. Do not forget to include things purchased with cash.

• Grocery: ___/month. Don't forget to account for higher than normal grocery bills when you are doing entertaining or hosting guests.

• Dining out: _____/month.

• Books/movie rentals/music: ___/month. Include monthly subscriptions to music and book services in this as well.

• Personal care: ____/month. Use actual figures spent on hair, nails, etc., at the makeup counter, etc.

• Clothing: _____/month. Use an average derived from actual yearly expenditures.

• Memberships: ____/month. This includes health club dues, country club or golf memberships, etc.

• Gifts: ___/month. Don't forget to average out what you spend on Christmas and birthdays.

• Travel/Vacation: ______/month.

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