What is the purpose of a budget?

I would suggest drafting a pre- and post – divorce budget as soon as possible as this is one of the most important planning tool to go forward. If you don’t have one then with your kind permission: GET ONE IMMEDIATLEY!

How can you ask for maintenance for yourself or your kids if you don’t know how expensive life is? Please feel free download it form our website.

The costs below are for a breakfast and a lunch box… it looks cheap and affordable but add them up and measure over a period then you will quickly become dependent on this tool to manage your financials.

·        Easy Oats            R4 per sachet

·        Yogurt                  R6

·        Sandwich             R3

·        Jungle Bar            R8

·        Fruit                      R3

·        Total                     R25 x 2 kids = R50 x 20 days = R1000 per month.(1)

Dinner, well let’s not go there now. Facts and figures always makes a lot of sense on paper but it also paints great picture of what you can and cannot afford to do. I encourage all my clients to make use of a budget and if you are not divorced it is a great conversation starter and relationship builder. Money is a big factor in the divorce rate.

Why budget?

  • Your budget should include savings and investment premiums. See them as “expenses” the same way you plan to spend monies on electricity and food for example. What is left after covering your expenses is a bonus that you could add to your emergency fund or bond or if you really have to, you can spend it. – Permission granted!
  • The benefit of running a budget over a long period is that it confirms income or expenditure should you get to the point of divorce. One of the biggest mistake one can make in a relationship is not getting involved in the finances.
  • A budget proves that you can manage money and that you don’t spend all your money on fashion… you will hear this at some point during the divorce. Anybody that buys one basket of food once a month for whatever reason, has no idea what groceries cost!
  • It gives you insight to valuable information like assets or investments, tax refunds and abnormal payments or unusual expenses.
  • If you know what the monthly bond repayment is, then you will know immediately know when capital has been taken out of the bond.
  • Naturally you will have access to bank account statements and other financial information to “balance things out”. 

 

MONTHLY BUDGET

Mom

Child

Child

NOTES

Income after tax

R 30,000.00

R 0.00

R 0.00

 

Maintenance

R 20,000.00

R 0.00

R 0.00

 

TOTAL

R 50,000.00

 

 

 

Expenses

 

 

 

 

Church or Tithing

 

 

 

 

Children:

 

 

 

 

School fees

R 0.00

R 2,100.00

R 2,100.00

 

Aftercare

R 0.00

R 400.00

R 400.00

 

Transport afterschool or bus

R 0.00

R 400.00

R 400.00

 

Cell phone

R500.00

R 200.00

R 200.00

 

Movies

R 150.00

R 150.00

R 150.00

 

Rugby shoes / Gum guards

 

 

 

 

Children’s clothing

 

R 300.00

R 300.00

 

Take always

R 150.00

R 150.00

R 150.00

 

Tablets for school

 

R 200.00

R 200.00

It is compulsory at some schools  needs to be upgraded

Insurance on tablet

 

R 30.00

R 30.00

 

Bedding towels

 

R 100.00

R 100.00

 

Pocket money

 

R 300.00

R 300.00

 

OTC medicines

 

R 100.00

R 100.00

 

School Photos

 

R 16.00

R 16.00

R200 divide by 12 this is just for the class photo

School Tours/ Camps

 

R210

R 210.00

Rugby tour between R2000-R4500 / Lets use R2500/12

Uniforms and sport attire

 

R 200.00

R 200.00

Really depends on sport

School Residence

 

 

 

This also depends on your child going to res

Stationary

 

R 200.00

R 200.00

 

Books

 

R 100.00

R 100.00

Also depends on the school

Au Pair / Housekeeper

R 3,500.00

R 1,166.67

R 1,666.67

Salary of R3500 / 3

Birthday parties

 

R 0.00

R 250.00

R3000 per child /12

Birthday presents

 

R 83.33

R 83.33

R500 - R1000/12

Present for other kids birthdays

 

R 100.00

R 100.00

R 200 per child for 5 parties per year

Fund raising and TLC money

 

R 100.00

R 100.00

 

Teachers gifts

 

R 20.00

R 20.00

 

Toiletries children

 

R 300.00

R 300.00

 

Vitamins

R 200.00

R 200.00

R 200.00

 

Haircuts

 

R 200.00

R 200.00

 

Orthodontist

 

 

 

 

Children’s savings

 

R 300.00

R 300.00

 

Extra Math lessons

 

 

 

 

Let’s play or extra mural activities

 

 

 

 

Hobbies

 

R 50.00

R 50.00

 

Treats i.e. gifts/sweets/snacks

 

R 100.00

R 100.00

 

Monthly expenses

 

 

 

 

Bond  /Rent

R 15,000.00

R 5,000.00

R 5,000.00

 

Data costs, ADSL and Wi-Fi /Fibre

R 800.00

 

 

 

Petrol

R 3,000.00

R 1,000.00

R 1,000.00

 

Toll

R 300.00

R 100.00

R 100.00

 

Mobile

R 600.00

 

 

 

Rates

R 600.00

R 200.00

R 200.00

 

Water and Electricity

R 3,000.00

R 1,000.00

R 1,000.00

 

Medical Aid

R 6,000.00

R 1,200.00

R 1,200.00

 

Co-payments

R 200.00

 

 

 

Car, TV, Post box and Trailer Licences

R 900.00

R 25.00

R 25.00

R900 car / 12

Gas 

R 400.00

R 133.33

R 133.33

Geysers, stove and gas braai. 

Vehicle cost

R 4,000.00

R 1,333.33

R 1,333.33

Car with R240 00 value

 

 

 

 

 

Debit orders

 

 

 

 

Life Cover

R 750.00

R 200.00

R 200.00

If they are the beneficiaries

Security and armed response

R 680.00

R 226.67

R 266.67

 

Insurance: Building/Content

R 600.00

 

 

 

Car Insurance

R 400.00

R 133.33

R 133.33

 

Cars : Maintenance tyres etc.

R 83.33

R 83.33

R 83.33

R4000 for set of 4 every 3 years

Mnet

R 700.00

R 233.33

R 233.33

 

Virgin Active

R 800.00

 

 

 

 

 

 

 

 

Maintenance and Repairs

 

 

 

 

Electricians, Plumbers, TV

R 200.00

 

 

 

Pets:

 

 

 

 

Food dogs

R 400.00

 

 

 

Injections/Deworming

 

 

 

 

Grooming

 

 

 

 

Other

 

 

 

 

Food/Leisure/Dining out/ Sport events

R 300.00

R 100.00

R 100.00

 

Emergency savings

R 1,000.00

R 0.00

R 0.00

 

Investments

R 1,000.00

R 0.00

R 0.00

 

Retirement Annuity

R 2,000.00

R 0.00

R 0.00

 

Hair / Manicure and Pedicure

R 1,000.00

 

 

 

Holidays and weekends away

R 1,000.00

R 333.33

R333.33

 

Additional Health expenses

R 350.00

 

 

 

Moms Clothing

R 400.00

 

 

 

Gardner

 

 

 

 

TOTAL

R 50,963.33

      R 19,267.66

R 20,000.99

Cost per child

 

 

 

 

 

NETT SAVINGS

-R 963.33

 

 

 

  • The example above gives you an indication of cost per child after divorce.  Don’t negotiate the maintenance on your run of the mill budget that you have been using during the marriage.
  • An important benefit of doing this budget when you are negotiating your settlement is that it states the facts and figures that nobody can get away from and BOTH parents are liable for the cost. And yes you pay this in relation to your income.
  • In the spirit of the “clean-break” principal receiving the total maintenance to cover the monthly costs and taking full responsibility for all payments is just easier to manage and it reduces the risk of being black listed for debts you are not responsible for.
  • If there is any possibility of getting a lump sum payment for maintenance vs the monthly payments…. TAKE IT! You never have the risk of default on the maintenance from your ex. This gives you great options for creating wealth and optimising your cash flow.
  • By painstakingly managing your budget every months you empower yourself to make Finsmart decisions.
  • It would be great goal and Finsmart to become financially independent from maintenance.
  • Set yourself a goal to invest 5% of the maintenance during the first year of divorce, 7% after the second year and 10% after the 3rd year and so on…and so on.
  • Keep in mind that maintenance will stop as soon as your children are financially independent, therefore make sure that you have zero debt when this happens. 10 years goes by in a flash!
  • If you re-marry and have the luxury of a double income, think smart and invest the maintenance
  • Maintenance can be re-negotiated. Bit of a mission but can be done.
  • Just in case you missed this point earlier, take out an insurance policy on your ex’s life in the event of death or disability.

Divorcesmart Process

Smart Thinking

Step 1 - Divorcesmart When you receive your “sjoe-sjoe” letter it is very normal to panic, be very emotional, cry buckets full of tears and it really feels like it is the end of your world and it most certainly is. But what you won’t see is that is the beginning of your new life. The aim in...