These are a few more tips to help you get an accurate budget. I use these with my College Station and Houston clients. The basic steps are in my last blog post.
#1 If your bank and credit card statements include expenses for people who won’t be in your household next year, such as soon-to-be-ex-spouses, you need to avoid listing those expenses. Either estimate the costs that are only yours or tag the ones you know are not yours and cross them off.
#2 How do you estimate only yours when the costs on the statements are for both of you? Example: Look at your monthly grocery costs. Think about who eats at home the most. If there are just two of you, allocate more than 50% of the grocery bill to that person. If there are more than two of you, estimate what percentage each person consumes. Subtract out the amount that is for the person who will not be in your future household. Do this for all expenses.
#3 If you think you are going to live in a different place after your divorce, use new information for certain household expenses. Use your current housing expenses as a springboard to your estimated future expenses. Example: Your cable internet bill may not change, but your yard care costs could.
#4 If you know you are going to move but you don’t know where yet, do some research and, aackk!, guess a little. Find homes or apartments that look like a possible option for you. Ask the landlord for the annual utility costs. Find people who live in similar places and ask them about their annual lawn care costs.
I have created a good spreadsheet for budgeting. If you want a copy, send me an email to stewart@TexasDivorceCPA.com with the words “Budget Spreadsheet” in the subject line. I’ll send you one – free.