Wake Up! It’s P (for Planning) Day (8th in the “Post D – as in Divorce – Day” Series)

Sandy Balick of Consensus Point Mediation, LLC (https://consensuspointmediation.com/) explains the financial planning that is needed once you have been granted a divorce.With Divorce Judgment in hand, mark the occasion with a good meal at a favorite restaurant, get a good night’s sleep and wake up ready to celebrate P (for planning) Day, the day you begin to develop plans for re-establishing the three major areas of well-being in your life – – health, finance, and mindset – – following D (as in divorce) Day.

So far in this series we’ve covered basics, having addressed living and testamentary wills, health and some important insurances aimed at financial security. Picking up with finances, this entry is about the importance of personal finances, something best approached through an effective financial planning process.

To be workable, a plan should have several horizons to help focus your efforts. One convenient, but by no means exclusive way to go about this is to look at finances on three levels:

  • Near term

  • Middle distance

  • Long term

If you were fortunate enough to have mediated your divorce, then you may already be well along on the budgeting process, or, perhaps it’s been in your nature to be good with finances, so budgeting may be nothing new to you. But if you haven’t lived according to a good budget – – and you haven’t won a lottery lately – – now is the time to begin.

Near Term

The budget is the focus of any near term financial plan. It should be a reflection of available funds that you can rely on such as a paycheck, interest earnings, etc. You compare this information with a detailed, line-item budget, using line items for everything imaginable. Be prepared – – it can be quite a revelation. Many people don’t come close to fully appreciating the extent of their expenditures. (Need a budget form? Click here to access a helpful one on the Institute for Divorce Financial Analysts website.)

With this budget, the most basic objective of financial planning can be accomplished, answering the questions:

    • Do I have enough to live on in my current lifestyle?
    • Do I have anything left over for savings?
    • Do I need to make immediate changes to my living circumstances so I can live within my means?

Once you have assured yourself of life’s basic necessities, and are in a position of safety, you may securely move forward with a more sophisticated savings and life plan.

Middle Distance

This brings us to the mid-horizon, which is where you can expect to be a year and two years from now. Do your personal finances support this trajectory or are more changes needed to accomplish this?

Long Term

Finally, all of this planning is more focused if there is a long-term goal to serve as a reference point, and to give you direction, even if this reference point is in the far distant future.

Retirement planning is especially important given that many Americans are financially ill-prepared for retirement. A plan that relies exclusively on Social Security is unlikely to be enough, which many older Americans are finding out, given recent economic history.

What are the critical plan elements? These would factor family and career issues, which, of course, necessarily involve financing daily life, childrens’ education, additional education for you and your new spouse, if any, and, not to be dismissed, retirement, however distant or financially remote this may seem. The next blog will expand upon this, discussing the topic of “building your plan.”

Feel free to ask any questions, to comment, or to request more information in the Comments Box below. Also, please feel free to forward this blog to anyone you know who might be interested in its topic.

Sanford (Sandy) Balick, Attorney & Mediator, NY Sandy Balick signature
Sanford E. Balick, Esq.
Founder & Principal Mediator
Consensus Point Mediation, LLC.

Phone: (646) 340-3434
Email: ConsensusPointLLC@gmail.com
www.ConsensusPointmediation.com
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