In a North Carolina divorce, if you divorce through attorneys, you will have to prepare a financial affidavit. A financial affidavit is a sworn statement which lays out your income and expenses. When I work on a case where child support or spousal support (alimony) is an aspect of the case, I ask my clients to prepare a budget, which also lays out income and expenses.

I have many clients who have never prepared a budget before. To complicate matters, during the period of separation, often one or both spouses are often living in housing that is temporary and expenses are still being paid from a family account. Both have put their housing on hold, waiting to see how the divorce plays out financially.

Here are the common mistakes I see:

  • Underestimated expenses. Often, I see discretionary expenses skipped, irregular, infrequent or seasonal expenses missed, groceries underestimated and vehicle expenses (other than gas) missed.

  • Inflated expenses. I see expenses listed for non-minor children, vacations and other expenses that are inflated to justify higher spousal support, and insurance for the entire family listed when one or more will soon be dropped.

  • Ignoring that the marital home is too expensive for you. Managing a house involves so much more than paying the mortgage! I have many other articles on my website that discuss the marital home.

  • Omission of future expenses. Will the house be sold? Are you living in a temporary apartment? In both cases, will you buy a house, rent or move to better rental? What are the estimated future housing expenses? Once you are dropped from your spouse’s health insurance and the family car insurance policy, what will those expenses be?

It’s so important to get your incomes and expenses accurately listed. That is why working with a Certified Divorce Financial Analyst is so important. I can identify gross income from all sources for purposes of child and spousal support. Although keeping your lifestyle is an important consideration, I can prepare you to cut discretionary expenses when the money is not there or you need to rebuild your retirement savings. I will also compare both spouses’ budgets and in mediation, I will guide the discussion so that both parties can verbalize their lifestyle needs and wants, as well as earnings expectations, so budget adjustments and spousal support can be negotiated from a place of understanding and knowledge.