Your income and expense sheet

Posted on Dec 12, 2016 by Katie Carter

In a divorce, a big part of what we have to do is figure out how much money exists and how it is spent by the parties. Of course, there’s really no question that, in a divorce, things change, and things that you were formerly able to afford will become more unrealistic through the process. Still, most attorneys (and judges, if your case is going to be litigated at any point) will want to have an idea of how much there is and how much is regularly spent.
We’re not just talking about major expenses—like mortgages, insurance, and car payments—we’re talking about the kinds of expenditures that make up a life. How much, for example, do you spend on groceries? How much on gifts? Do you tithe to your church? Are you going on vacations? What do you pay to color your hair? On manicures and pedicures? What about what you spend on clothes? Medical expenses? Contact lenses or eyeglasses? Prescription medications? Do you have any pets? If so, what costs do you have related to them? Their food, grooming, and doggy day care?
What about costs related to the children, if you have them? How much are you spending on child care, tuition, school supplies, extracurricular activities, and clothing for your children?
We also look at debt. How much do you owe, and how much are you paying?
It all factors in. Of course, it’s probably not going to be possible to account for every single dollar spent. After all, there are always little things that pop up here and there that aren’t necessarily measurable. The occasional Target run or a random lunch out or even that Big Gulp that you needed to get through the afternoon won’t necessarily factor in to your total overall expenses because it’s just too small or inconsistent to measure.
To determine what’s there and what’s being spent, we often have each side fill out an income and expense sheet. You can fill it out and do the math yourself, but we use a self populating one that does the math for us. (Thank goodness, right?!) It’s really not very difficult, and it gives us a lot of guidance when it comes to determining where the money is needed.
Of course, that doesn’t mean that because you’re spending the lion’s share of the money that comes in every month that you “need” it, or that you’ll necessarily receive spousal support or some other compensation as a result of the divorce. To be sure, spousal support is one of the reasons we look at the income and expenses, but we don’t look at the income and expense sheet with an eye to reverse engineering the amount of spousal support we’d like to receive.

Spousal Support

If you’re hoping to receive spousal support, there’s no question that the income and expense sheet will help us figure out what’s appropriate. But the income and expense sheet really isn’t the be all end all when it comes to spousal support, either. There are a lot of other factors that go into an analysis for spousal support, and you’re not going to get the benefit of the doubt just because you’ve listed an exorbitant amount of expenses.

So, what goes into an analysis for spousal support?

Need and ability to pay

First of all, the court looks at need and ability to pay. You have to demonstrate a need (and an income and expense sheet that shows you have more expenses than monthly resources will certainly help to demonstrate a need), but he also has to have an ability to pay—which means that he must earn significantly more than you.

The statutory factors

There are factors in the statute that affect spousal support, too, and whether you’re making an argument to the judge or trying to negotiate an award of spousal support with opposing counsel, you’re going to want to be aware of those factors so that you can base your argument around them. In case you haven’t seen them, take a look:
1. The obligations, needs and financial resources of the parties, including but not limited to income from all pension, profit sharing or retirement plans, of whatever nature;
2. The standard of living established during the marriage;
3. The duration of the marriage;
4. The age and physical and mental condition of the parties and any special circumstances of the family;
5. The extent to which the age, physical or mental condition or special circumstances of any child of the parties would make it appropriate that a party not seek employment outside of the home;
6. The contributions, monetary and nonmonetary, of each party to the well-being of the family;
7. The property interests of the parties, both real and personal, tangible and intangible;
8. The provisions made with regard to the marital property under § 20-107.3;
9. The earning capacity, including the skills, education and training of the parties and the present employment opportunities for persons possessing such earning capacity;
10. The opportunity for, ability of, and the time and costs involved for a party to acquire the appropriate education, training and employment to obtain the skills needed to enhance his or her earning ability;
11. The decisions regarding employment, career, economics, education and parenting arrangements made by the parties during the marriage and their effect on present and future earning potential, including the length of time one or both of the parties have been absent from the job market;
12. The extent to which either party has contributed to the attainment of education, training, career position or profession of the other party; and
13. Such other factors, including the tax consequences to each party and the circumstances and factors that contributed to the dissolution, specifically including any ground for divorce, as are necessary to consider the equities between the parties.

The duration of the marriage

The length of the marriage also has a lot to do with spousal support—both whether you’ll receive any, and then, if so, for how long. The longer your marriage, the more likely it is that you’ll receive spousal support (assuming, of course, that all the other factors support an award of support). For more information, click on the link that corresponds with the length of your marriage:

Marriages of 1-7 Years

Marriages of 8-19 Years

Marriages of 20+ Years

Pitfalls in the Income and Expense Sheet

An income and expense sheet is really helpful, but it’s not supposed to be a document that we use to reverse engineer the amount of spousal support we hope to receive. Even though there’s no formula that is binding on our area, most courts (and attorneys) use the Fairfax guidelines to calculate support, and move forward from there.
Just because you have a lot of expenses doesn’t mean that you’ll get more support.

Besides, some of the expenses you list will be ripped apart by opposing counsel. (And, likewise, we’ll look into the reasonableness of the expenses your husband claims, too.) We can’t have you alleging that you spend $600 a month on groceries for yourself alone, or that you spend $100 a month getting your hair done (seriously, that’s like $1200 a year!). Just because you list it doesn’t mean it’s reasonable—and, in fact, listing it could cause more harm than good. If we appear to be completely unreasonable to the other side, they’re not going to have much incentive to negotiate with us. Right? I mean, if you saw an income and expense sheet from your husband that justified him spending $600 a month on groceries, you’d roll your eyes, too, right? (Besides that, if you both did it, $1200 a month on groceries would severely impact your bottom line in the divorce!)
You don’t have to cut out all of your frivolous spending, and you certainly don’t need to feel guilty about it. We ALL spend money on things that we don’t need, or things that other people wouldn’t understand. It’s not a reflection on your poor character or anything like that; all I’m saying is that, when we present your income and expense sheet, we’ll want to have gone over it ourselves first, to be sure that what we’re presenting is accurate, truthful, and reasonable.
It’ll go a lot further towards negotiating a favorable award of spousal support if we’re as straightforward and transparent as possible. Of course, the amount of money you have from day to day will almost certainly change. After all, how could it not? You’re taking the income that you had that formerly supported one household, and, after the divorce, it’ll have to support two. There’s not more money, but there are automatically going to be more expenses. It’s not fun, but it’s math.
For more information, or to schedule an appointment with one of our licensed and experienced Virginia divorce and custody attorneys, give our office a call at (757) 425-5200.