7 Costly Mistakes To Avoid In Budgets
Presenting credible evidence to support a client’s budget or discredit a spouse’s budgetary claims can ultimately save clients thousands of dollars or more per year.
Credible evidence includes a reliable analysis of the parties’ historical spending to show the marital standard of living. In addition, to be credible, a projected living expense budget must be reasonable based on the marital standard of living as well as current expenses. Below are some mistakes to avoid when preparing a marital standard of living budget or projected living expense budget, or when analyzing a spouse’s claimed budget:
1. Annual Or Quarterly Amounts Listed In A Monthly Budget
Examples: association dues, life insurance, AAA membership
2. Double-Counting Of Expenses
Examples: homestead, insurance, real estate taxes
3. Expenses for Others
Examples: grandchildren, parents, significant others, friends
4. Expenses for Children Who Are Now Emancipated
Examples: college expenses, travel expenses, cell phone
5. One-Time Expenses Treated As Ongoing Expenses
Examples: basement finish, boat purchase, car purchase for child
6. Failure To Include Expenses Not In Bank Or Credit Card Statements
Examples: deducted from paychecks, paid in cash
7. Failure To Use Current Expenses (Which Have Changed Over Time)
Examples: utilities, real estate taxes, gym membership
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