Yes, the answer is “Divorce” because it isn’t “E Pluribus Unum” but it’s “Ex Uno Plures” which means “out of one, many.” So how does this apply to divorce? In a separation or divorce, we are taking a united household and making multiple households out of it. We are taking one and making two; not necessarily “many” but definitely more than “one.”
In divorce planning, the first thing you have to do in order to “Ex Uno Plures” is develop a Plan. So where does the Plan start? The Plan starts with a budget. My clients ask me “Why do we need to do budgets?” and I say “Because most people have no idea how much money they spend.” When I review budgets with a couple, they’re always astounded by how much money they spend. I’m astounded they don’t know.
So the quick, down and dirty way of figuring out how much the couple is spending is to ask them, “When the bills are paid at the end of the month, is there any money left over?” The usual response is “No,” because people tend to spend what they earn. If they earn more, they spend more. Unfortunately, however, in an economy like we have now, they are earning less but not spending less. People are spending the same as when the economy was better and are “spending like it was 1999.“ Couples are having a lot of trouble adjusting to a “lesser” lifestyle.
Budgets are key. In mediation, I meet with a couple and do an economic analysis of what their net earnings are in order to calculate how much cash they have after taxes are paid. That is their net income, not gross income. That’s the amount both husband and wife have to spend. Arriving at that figure leads into a discussion of how can we support two households and what those household budgets will be.
You can see the way the Plan is developing:
- Figure out how much cash income is available.
- Create a budget of your current expenses.
- Project the expenses for the spouse who moves out.
- Determine if there is enough money to support the second household.
- Calculate spousal maintenance if that is to be paid.
- Calculate the child support amounts.
Once these steps are completed, calculate the amount of money that flows from one spouse to the other. OK, so now you know if this can really work.
Budgets are really the key to developing an economic plan. Once implemented, this has got to work from day one. Just by calculating child support according to a formula, temporary maintenance according to the statute, and dividing assets and debts in half, are you really coming up with a Plan that can succeed? Will these formulaic calculations alone allow both the husband and wife to have separate households, to pay their bills, support their children and have a lifestyle that resembles what they had pre-divorce?
Even though Ex Uno Plures really is what happens in divorce, E Pluribus Unum can be achieved because from many ideas we discuss in mediation, we can create one Plan that works.
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