Liquidity and Cash Flow for Divorce Financial Planning
First, develop a post-divorce budget. Once that is complete, compare your expected income to your expenses. Remember to include child support payments and the expenses related to your children. Next, look at the future. Will your situation stay the same or will it change?
Some items to consider:
- Do you have a position or business that causes your income to fluctuate?
- Will your income increase after you finish professional training or school?
- Will your expenses go down when your child starts going to school for a full day?
- What are other factors unique to you and your situation?
In a divorce settlement it is important to think long term.
Do you need money now, but in a few years your situation will change? If so, you may be able to take less spousal support now and take a larger share of your assets in exchange.
Do you think your spouse will have more cash available in a few years, but none today? Maybe you can negotiate an increasing level of support to make the agreement more palatable.
Do you have an income that is highly variable from year to year like a sales position or own your own business? If so, you can ask to provide a minimal amount of support every year but give more if you have a good year.
Contact JK Financial Planning for a Complimentary 30 Minute Getting Acquainted Meeting to help you create your financial plan for long term success.