Cash Flow in Divorce
Are you anxious over what the future holds for you post-divorce? Most women tell me they want to know what they need to do post-divorce so they don’t run out of money at some point when they're older and how do they have the income they need monthly now. One area that can cause a lot of grief for clients is figuring out FUTURE INCOME AND EXPENSES, but you don't have to go at it alone.
Your attorney and CPA won't tell you how your settlement will affect your future. It's not their role. They are there to guide you through the divorce; their relationship with you is a transaction-based relationship, meaning when the divorce is finalized, so is the relationship.
At The Financial Knot® (TFK), we guide you through divorce AND can continue to support you after your divorce with our post-divorce transition assistance. We already have your data surrounding income, expenses, and assets; therefore, we simply continue to use this for your financial plan post-divorce.
At TFK®, we provide cash flow projections (projecting future income and expenses) to help you see how your choices today impact tomorrow. Cash flow is the increase or decrease in the amount of money you have, typically calculated monthly or yearly. By doing this over a period of years, you can see whether decisions you make will put you in the POSITIVE for the long term or the negative; and what changes could be made to impact your cash flow to the positive whether budget adjustments or structuring a settlement differently, etc.
Getting divorced without considering the financial impact those decisions have on your future is like planning a dinner party without knowing how many people are coming or taking a trip without knowing how many days you’ll be gone or where you're going.
An example I run across a lot is one party desiring to keep the marital home. Sometimes, this is the party that cannot afford to keep the home. They may not realize this until we look at their budget and their cash flow projections for the future. This usually will illustrate to them that even with severe budget cuts, they will not be able to afford the home or will not enjoy their lifestyle due to the budget cuts. They may decide to not keep the home and look at some alternate options. It’s better to know this before you settle in divorce than being required to have a “fire sale” on the home after the divorce to be able to pay your bills and not go into debt.
Cash flow projections in a business can help a business owner understand if they can afford certain options to buy their spouse out of the business and structuring settlement payments. Should the note have a balloon payment at some point? As the business owner, how will you save for this future balloon payment? A BUSINESS CASH FLOW ANALYSIS can assist you with these financial complexities.
At TFK®, we assist all types of families; either as a Financial Neutral when couples want to work together in a cooperative or Collaborative Divorce or as a Financial Advocate for one party when couples choose the traditional divorce model.
As a Financial Advocate, I’ve seen some troubling trends. Many times, I am hired by women to do this work, because women are traditionally the party that have not been involved in the family finances. This is changing, and I see more women participating in family finances, but, especially with women in their 50s, 60s and 70s, this is usually not the case. A typical scenario I see in my office is a woman over 40, whose kids are leaving home soon or have emancipated, and she needs assistance understanding all the financial components of her marital agreement and wisdom in forming a budget for her future. Cash flow projections are at the heart of helping clients see what they can spend monthly and set up a reasonable budget.
The Financial Knot® is a haven for women in divorce. From assessing whether keeping the marital home is possible to managing business finances, we’re here to support you every step of the way. Don't let financial uncertainty add to your stress—let's plan your path to a secure future together! To learn how we can help, schedule a call today at (803) 403-1308.
The Financial Knot® is another business name for Independent Advisor Alliance, LLC. All financial planning advice is offered through Independent Advisor Alliance, LLC, a registered investment advisor.
