4 Reasons You Need Budgets in Mediation

February 16, 2016 |

{2:48 minutes to read} Budgets are not fun – composing them, living on them and even just having to think about them. So, I understand the look in clients’ eyes when I first talk to them about completing their budgets.

Here are 4 reasons why I think it’s vital to have accurate and complete budgets for each party in mediation.

Budgets are a reality check
No matter the level of income, a good percentage of my clients are living above their means. Seeing this in black and white makes it clear that changes will need to be made.

Budgets can help you make your argument for a support payment
While there are statutes to determine child support and maintenance, you are in mediation because you want to make an agreement that is going to work best for your family. Even though you will be advised of the amounts the formulas calculate, only a budget is going to reveal and help you argue if you need more or can’t afford to pay the amount that the statute provides.

Budgets can help you determine what can no longer be afforded.
When you are trying to divide the same amount of income into support for two households rather than one, budgets can help you determine what is a necessity versus what is a luxury. When one person cannot afford to pay rent, and the other person is continuing to maintain a country club membership, it makes it clear that a more equitable support plan is needed.

Budgets can help you make positive changes for the future
If your budget reveals that you are spending a large portion of your income on paying down debt and nothing on accumulating savings, you can decide how you both will work to eliminate that debt and hopefully incorporate savings for college or retirement into your future plans.

In my mediation matters, I use Family Law Software which enables clients to download a client version of the program and enter their assets, liabilities, expenses and income. However, some clients prefer to work with a financial professional to help them complete the program and work on budgets. It’s an additional expense, but is well worth it to have a more complete and accurate financial picture.

What does your budget reveal about your household expenses and priorities?

Clare Piro Attorney and Mediator

Attorney & Mediator
500 Mamaroneck Avenue | Suite 320
Harrison, NY 10528
Tel: 914.946.0848

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Comments

Daniel B

February 25, 2016 - 9:43 AM

Clare, This is a great point to make. I am not sure how a couple can make informed decisions about their future without examining their income and expenses. It may not be pleasant but it is far better to find out ahead of time what will and will not work rather than after decisions have been made that can be hard to change. Dan

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