You also need to examine the way in which you pay for your expenses. Do you use a credit or debit card, write checks, or pay cash? The budget could vary greatly depending on your means of payment. If you use a credit card for your expenses, do you pay off the balance each month or do you carry an ongoing balance?  If your balance is ongoing, then you need to calculate the amount you pay each month against the balance and add that to your list of expenses and monthly budget. If you use a debit card, on the other hand, the money is taken directly from your checking/savings account upon your purchase instead of accumulating a balance to be paid at the end of the month. In that case, you will not need to factor in monthly payments off your credit to your budget. Check your ATM withdrawals and cashed checks to determine how often you take out cash and how you use. Keep your cash receipts for several months, dividing them by categories and storing them separately in files or spreadsheets.

Once you have a full grasp of your current expenses, factor in federal, state and local tax to the amount needed for the monthly budget.  This consideration will give you a good idea of how much money –before taxes- you would require to maintain your current lifestyle. Once you have established the basics of a budget required in order to maintain your lifestyle, work with a friend, family member, or a financial professional, allowing them to challenge your assumptions to ensure that your budgeting is realistic. Often, you will find that you need to make adjustments to your original budget to best suit your life after the divorce. Obviously, a sheet of paper cannot capture your quality of life; however preparing a budget can serve an integral role in the process of realizing your financial future after the divorce. 

“O Lord, you have searched me and you know me.  You know when I sit and when I rise; you perceive my thoughts from afar.  You discern my going out and my lying down; you are familiar with all my ways.  Before a word is on my tongue you know it completely, O Lord”  (Psalm 139: 1-4)

God, help me to face the reality of my situation and help me to always be honest with you. Amen

Dr. Darlys S. Harmon-Vaught is a divorce finance analyst and owner of Financial Solutions for Divorce in Louisville, Kentucky. Along with a 25 year career in the financial industry, her certifications regarding divorce financial analysis include Certified Divorce Financial Analyst™ (CDFA), Certified Forensic Fraud Analyst (CFFA), Certified Tax Specialist (CTS), and Certified Fraud Examiner™ (CFE). She speaks at many local and national conferences and writes for several websites and magazines.  Today, she works exclusively with individuals contemplating or going through the divorce process.