Why put your well-being and best-interests into other people’s hands?  Why wait years for your disputes to be settled when they could be resolved in months, weeks or even hours?  Why resolve your private affairs in public, or spend a fortune gambling on who has the best lawyer?  Why make your only options win or lose?

Compared to litigation, mediation gives you the advantages of:

Privacy,  Options, Speed and Cost Control.

Privacy

Most people who decide to file a lawsuit usually don’t consider that, with very few exceptions, what you file in court is a matter of public record.  Witness the access that gossip sites have to the details of celebrities’ court proceedings.  Even the trial itself is generally open to public view.  In the past getting legal records meant a trip to the courthouse and hours sifting through files.  Today, a simple computer search can grant access to everything.

Mediation is private.  It is confidential.  Many states have laws that protect what is said in mediation from being used in court should the parties decide that a lawsuit really does better meet their needs.

Options

In litigation there is only one possible outcome: someone will win and someone will lose.  In mediation, everyone can win.  You might have no interest in whether the other party wins.  You might desperately want the other party to lose.  But consider this.  Nothing is certain in court.

Why put your fate in other people’s hands? The only slam dunk case is the case that you decide yourself.  In mediation, you and your counterpart are the judge.  A mediator facilitates a negotiation where the options for solutions are limited only by the parties’ imaginations (so long as the options are not illegal) and the parties control the outcome.  It is true that the parties might ultimately decide that they really do need a third party to declare a winner.  But this is rarely the case.

Cost Control

Time and again, a case is won or lost, not on the merits of the case, but on the skills and resources of the attorneys. That is why those who have the money to hire high priced attorneys seem to win more often.  If you only need two hours to resolve an issue that might bounce around in court for more than a year, of course you are going to save money.  You will save a ton of money.  The average contested divorce costs $40,000.00 to $180,000.00.  The average mediated divorce costs $4000.00 to $6,000.00.  There is no mystery here.

You will also save the costs of time and worry.  When you partner with the other party to draft the agreement that resolves the dispute, you are both more likely to abide by it, avoiding the costs of further litigation.   Additionally, there is no unfavorable decision to appeal, which means avoiding another potential expense.  Instead, if the situation changes  so that the agreement needs modifying, it is easy to contact the mediator to update the agreement.   Imagine, more money in your bank account and less worry on your shoulders.

Speed:

In my experience, disputes involving two parties with up to three issues can be resolved in two hours or less.  That is all.  When the people who must actually live with solution are put in charge of their own outcomes, getting to the bottom of things really is that fast.  Then you can get back to living your life.

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This is Your Brain.  This is Your Brain on Romance.

Bathabile K. S. Mthombeni, J.D.

Imagine the scene: a group of women sits around a living room commiserating with one of their own who has just experienced the worst break up ever. Between spoonfuls of ice cream she sobs, “That jerk! How did I get into this mess?” Imagine that one of her friends pats her back and says, “There, there, it’s not your fault. It was the dopamine, oxytocin and vasopressin talking.”

A young man once asked me, “Do you believe that people fall in love?” My answer left the poor lad a little crestfallen. I told him the truth: people experience something that they describe as falling in love. But, really, they are experiencing a series of chemical processes in their brains that are similar to the chemical processes that occur when one takes cocaine. It is temporary, it doesn’t last, and as high as one feels during the chemical rush, that’s how low they feel when it is over.

Before you write me off as a cynic consider this. I’m not saying don’t fall in love. Perhaps it is better to avoid cocaine, but do fall in love. As the anthropologist, Helen Fisher, explains in this TED talk, these chemical processes are vitally important to the survival of the human species. But knowing that the experience – that awesome wave of euphoria that renders everything about the object of your affection golden and glorious – is actually a chemical high can be very important. It can allow you a tiny window of opportunity to insert some objectivity into your headlong rush. All the excuses you make for behavior that you would never tolerate in someone else? It’s the chemicals talking! Be certain that those things will drive you bonkers eventually. So, see whether you can think through the chemical haze and consider: when I am sober, can I live with this for the rest of my life?

Helen Fisher.


Music for Your Heart

Yvonne Quilop, MA, MT-BC

Music Therapy is part of a family of creative arts therapies like drama, dance/movement, art, and poetry therapy.  It was established as an academic field of study at the University of Michigan in 1950.  A trained music therapist uses therapeutic methods that have been proven to be effective to meet the client’s goals in therapy.  Of course, what makes music therapy unique is that music lies at its heart.

Music therapy is different from many other therapies because it its focus is a non-verbal method.  People who resist or dislike other types of therapy – perhaps because they feel reluctant to talk things through – can find satisfaction in music therapy.  Music therapy allows participants to feel safe as they engage and communicate with others and receive the therapeutic benefits of interacting socially without having to talk about themselves.

The Power of Music Therapy

Most of us innately understand the power of music.  It affects our feelings and our moods in fundamental ways.  We deliberately select certain kinds of music for certain settings.  Music is usually an essential part of our formal rites and ceremonies such as weddings, graduations and funerals.  D.J.s at clubs and private parties can make a very decent living by choosing the right combination of music to pace a party well.  One episode of the television show “Friends” has Chandler Bing attempting to set the mood for a romantic Valentine’s evening with his beloved Monica by playing a mixed-tape that his ex-girlfriend made for him – with hilarious results.  Many people in love will agonize over the soundtrack for their private romantic dinners on Valentine’s Day.  We use music to find peace when we’re in turmoil and comfort when we grieve.  Non-verbal music can often express what words cannot and so cut directly to the emotional heart of the situation.

Music therapists harness music’s power to effectuate change and, as the American Music Therapy Association states in its definition of music therapy, “. . . [use] evidence-based interventions to accomplish individualized goals within a therapeutic relationship by a credentialed professional who has completed an approved music therapy program.”  Music therapists have studied the research that shows, for example, that rhythm can improve physical functioning for people with physical disabilities, and singing can improve memory and cognition for people who battle dementia/Alzheimers.  Making music in a group, an inherently social activity, can increase group cohesion and build a sense of belonging.  And, of course, music is self-expression.  Communicating musically is not only about the words of the song it is about listening to others when we make music in groups, and it is about being heard.  Many people use music in their spiritual lives to connect with the divine, with each other, and/or to a greater whole.

The Therapeutic Experience at Home

Many people use music therapeutically without really thinking about it.  Individuals and couples can use the principles of music therapy to achieve wellness, to alleviate stress and promote relaxation.  Listening to music and actively making music are two ways to create a therapeutic music experience.

If you choose to listen to music, a few tips can improve your self-directed musical experience:

  • If possible, find a quiet room, hang a “do not disturb” sign on the door, dim the lights, turn off your cell phone, or better yet, leave it in another room, and find a comfortable chair to sit in.  Let the music play and put your attention entirely on the music.
  • Consider using familiar music, which tends to be more relaxing than unfamiliar music.  Avoid music that you may associate with negative experiences and memories.
  • Experiment with different musical genres.  Classical, jazz, new age and music specifically designed for relaxation are all great options.
  • Music with vocals may serve as a distraction.  Try listening to both music with vocals and music that is purely instrumental and note your level of relaxation after listening to each.
  • Research shows that music with speeds of 50-60 beats per minute are most effective in a achieving a relaxed state.  Try to find music with a tempo within that range.

Ultimately, choosing music you enjoy will be most helpful.

Drumming is a popular option for those who choose a more active form of music making.  It is also a therapeutic experience that couples can participate in together.  Drumming has been shown to reduce stress and drum circles are a particularly good way to engage in active music making with others.  Some people gather informally in a drum circle to play hand drums, such as the African djembe, and other percussive instruments.  There may or may not be a formal leader of the drumming.  The goal is not to learn and perform music; no skill or experience is required.  The goal is simply to enjoy the pleasure and release from stress that comes when human beings create rhythms together.

Singing in a group is another way to actively engage in music and be therapeutic at the same time.  Although many of the more formal choruses require some singing ability, many choirs, especially community choirs, welcome anyone wishing to join, regardless of ability.  Incidentally, vocal warm ups, part of all choir rehearsals, incorporate deep breathing.  Deep breathing assists the body in moving into a relaxed state.  Additionally, one can benefit from a sense of mastery that is achieved through the work of learning a musical piece.

Each person can enrich his or her life through these musical experiences but being in music therapy can further enhance the therapeutic benefit.  As with all therapies, having a trained professional to guide you can be immensely helpful.  No musical skill is required.  The therapist will assist you with clarifying goals for therapy, introduce musical interventions that will best help you reach those goals, and support you throughout the process, musically and verbally.

Resources:

To find a music therapist in your area visit www.musictherapy.org

To find a drum circle near you www.drumcircles.net

To find a choir near you www.choralnet.org

Yvonne Quilop MA, MT-BC is a board certified music therapist with many years of experience working in the mental health field.  She  recently took on the full time job of raising her newborn daughter, and lives in the Washington D.C. area with her husband, daughter and grey tabby, Ollie.



Romancing the Mediator: How to Find The One

Bathabile K. S. Mthombeni, J.D.

In business it is called “The Right Fit”.  In intimate relationships it is called compatibility.  No one is the best candidate for every job and one person might have a fantastic romance with one person and yet completely fail in a relationship with a different person.  Relationships with mediators can be the same.

Mediators have different styles of practice.  Of course each individual mediator brings his or her own unique brand of personality to mediation.  But the mediation profession recognizes broader generalized categories.  It is important to know what these general categories are so that you can explore your own preferences and ask a potential mediator about his or her style before starting your relationship.

There are many ways to describe the various styles in mediation, but a few enjoy significant visibility in the field.  These include evaluative mediation (sometimes called directive mediation), facilitative mediation and transformative mediation.  Other styles of mediation include narrative mediation, and some mediators follow the understanding model.  However, the three that are most recognized are the evaluative, facilitative and transformative styles.

Style Overview

Transformative

Transformative mediation is the newest of the main styles.  Transformative mediators aim to involve the parties in managing both the process and the content of mediation as much as possible.  They don’t state their opinions or tell the parties what they think they should do.  Transformative mediation is very relationship oriented and can feel like therapy.  Transformative mediators aim beyond helping the parties to settle the issues that brought the parties to mediation.  They also work to help the parties acknowledge each other and understand how the other person sees things, too.  The point is for the parties to understand their power to not only resolve the problem that brought them to mediation – if they choose to resolve it – but to understand how to improve their approaches to conflict in the future.  This might be called the Montessori style of mediation

Facilitative

Facilitative mediation is the oldest of the commonly recognized styles.  It is the style most commonly taught in mediation training.  Facilitative mediators help parties to define their positions, identify and communicate their needs and interests, and collaborate to find resolutions that address those needs and interests.  Like transformative mediators, facilitative mediators don’t state their opinions about the case or tell the parties what they think they should do.  Facilitative mediators often see themselves as responsible for facilitating the process – hence the name – while the parties are responsible for the content.  Like transformative mediators, facilitative mediators are interested in relationships as well and will take time to talk through the parties’ feelings.  However, they are more interested in resolutions and less interested in transformation than a transformative mediator is.  This might be called the conventional style of mediation.

Evaluative

Evaluative mediation is most common in mediation programs that are part of a court system.  The mediators are often lawyers or retired judges who are experts in the law that governs the issue in dispute.  Evaluative mediators are seen as more settlement driven.  They will bargain with the parties, engage in more shuttle diplomacy, and can give their opinions of what the parties’ chances are in court.  Often they control both the process and the content of the mediation by deciding what to address and what not to address.  Usually the parties’ feelings about the conflict are left out of the picture.  This might be called “boot camp” mediation.

Making the Choice

In practice, most mediators mix these styles. Kate Reed of the new television show “Fairly Legal” seems to combine evaluative mediation with transformative mediation’s aims (although it is more likely for facilitative and transformative mediators to borrow from each other’s styles than for evaluative mediators to borrow from the transformative model).  However, mediators do tend to favor one style.  Knowing this, and choosing your mediator based on the style that works best for you and your situation, can help you to avoid a negative experience in mediation.  Even then, understand that most mediators are very good at modulating their styles to fit the topics discussed and the mood of the participants in mediation.

When you contact a mediator, begin by asking whether the mediator follows a certain style.  Ask the mediator to describe that style for you.  Then decide whether it works for you.  If you are not sure, it is perfectly fine to retain the mediator on a trial basis.  See how it goes.  The beauty of private mediation is that it is entirely voluntary, you can end the relationship at any time.

For more detailed information about the styles, visit these links:

http://www.imimediation.org/mediation-styles.

http://www.campus-adr.org/cmher/reportarticles/Edition1_4/Variations1_4.html

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Mind the Piggy Bank

Dominique’ Reese, Financial Adviser and Educator, CEO CommuniTree LLC.

Parents, does your child ask for toys, games, clothes, food, while youre out taking care of business? If your child is like most, your answer is yes! In today’s times, it is becoming ever more important to use these moments as opportunities to teach your child about personal finance. You don’t have to do much or even spend money to teach them, although, there are services available if you did. Businesses such as CommuniTree LLC, where we teach youth and adults about money and deliver one-on-one money management counseling could be an affordable solution for you and your child to learn about money together. However, below, I will share with you four ways to teach your child (ren) about money and how to have fun while doing it!

1) LOANS 101–Before you and the young one(s) head out of the house to run those errands, give them $5, $10, $20, depending on their age, in an envelope. Explain to them that the money you’ve given them is a loan, borrowed money, that they can use to purchase whatever they want while you’re out. Your kid will think you’re the greatest parent ever…until you drop the bomb on them that they have to pay you back in full based on chores or other tasks you give them for a whole week!

2) COIN ID–  If you have a really little one, he/she probably isn’t ready for money management and debt just yet! Instead you may need to start with identifying coins and bills. When teaching kids as young as 6 years old about money, you can have tons of fun and make it a learning experience beyond money. Pull out your pennies, nickels, dimes, and quarters. Get blank sheets of paper and colored pens. Trace the coins on your paper and instruct your budding money maker to do the same! Now the fun begins! Write the name of the coin and the amounts of the coin below each coin. Lastly, write the president associated with each coin and let the teaching begin! Allow your money maker to color the coins, using their budding imagination!

3) CIRCULAR SHOPPING– So you’ve heard of window shopping, but what about “circular shopping?” As adults, we do it fairly often on Sundays, when the weekly sales papers and coupons are delivered! This is a great way to include your kids in the shopping experience! Pull out your wallet, take out your cash, grab a calculator (or your cell phone!), get the circulars and a blank piece of paper. Create a list of 10 to 20 items you need or want. Give your child $20 to shop with and challenge them to shop for as many of the items as they can without going over! See how well they do and explain to them that budgeting is important for the reason that they just learned. Shopping for what we need can be expensive, but making a list and checking it twice will keep more cents and dollars in your wallet!

4) iSave—In this day and age, it is more important than ever to teach your child (ren) about saving their money! Do you have a savings goal? Have you met that goal? Unfortunately, if you, as an adult, don’t have any savings, chances are your child will not know the value of saving.  A recent study conducted by FINRA Investor Education Foundation in 2009 says that of Americans ages 18-29, only 31% had an emergency fund. The other 69% of this cohort is on their way to be a “lack of savings” generation. They’ve got to have it now! In order to break this cycle, engage your child in saving by opening a student savings account for them NOW! Mostly all banks offer this type of account and for no cost. You’ll need your ID, your child’s ID, a deposit to open the account, and basic demographic information. Be prepared with your Social Security cards as well. Every week or bi-weekly, visit the bank with your child and allow them to deposit a portion of their allowance, birthday/gift monies and offer to match their savings! This will excite them and encourage them to save even more, just to get Mom or Dad’s match!

–Dominique’ Reese, CEO, CommuniTree LLC

For more information about Ms. Reese’s services, visit:

www.yourcommunitree.com

Follow CommuniTree LLC on Twitter @CommuniTreeLLC

Visit CommuniTree LLC on Facebook!

© 2011 Dominique’ Reese.  All Rights Reserved

 

CF Who?

Shareeke Edmead-Nesi, Financial Literacy Specialist

Financial advisors are professionals, who provide essential services to every person who strives to achieve financial stability.  Knowing when and how to select a financial advisor can significantly improve the benefit that you receive from having one on your financial team.

I’m often asked, when is the appropriate time to hire a financial advisor? I suggest that before you venture out to find the right financial advisor, make sure that your financial house is in order. The value that a financial advisor provides to a person is maximized when an individual has taken the right steps fiscally.

An initial step is to identify your financial goals. A financial advisor can help lead you on the right path, but you must decide where the road ends. Do you have a budget? Do you stick to your budget? It is helpful to know how much you spend on needs and wants on a periodic basis. A financial advisor may have suggestions to assist you in attaining your goals, but you need to know whether you can realistically adjust your spending habits to meet those goals. How much of your paycheck or earnings is diverted towards your savings? Being a conscious spender will allow you to allocate more of your earnings to your savings or increase your investing capability. A financial advisor can help you devise a plan that enables you to continue to build your savings for your retirement or buy your dream home by helping you to determine how to allocate your resources to accomplish your goals.  A financial advisor can help you to devise a plan to obtain the resources you will need to accomplish your goals if it seems that your current resources are inadequate. But first, you should establish a basic understanding of your financial standing by tracking your spending and savings habits.  Then you should decide what you want to achieve.

Once you have tidied up your financial house, identified your financial standing, begun to become more financially literate and have established goals that you want to achieve, it is time to select an advisor that is right for you. There are a number of important characteristics that differentiate financial advisors in the field. Understanding these differences can be vitally important as you search for the best advisor for you.  The characteristics include the advisor’s professional qualifications, designations (i.e. CFP, PFP, etc.), personality, and investment style, to name a few.

There are several different designations that a financial advisor can attain. CFP is a Certified Financial Planner. This designation informs you that this individual has been in the industry for a few years. A CFP has also completed additional course work and passed an exam to receive that designation. There are other designations that are specific to certain needs like the Certified Long Term Care (CLTC) designation. Someone who is a CLTC may be a good resource if, for example, you are single with no children or have aging parents that depend on you financially in their retirement. Your goal may be to invest more money in the stock market. One way to do that is through mutual funds. If you are looking for a diverse set of mutual funds then a Certified Fund Specialist (CFS) may be your answer.

The main objective in selecting an advisor is doing your homework. Do your due diligence to make sure the individual is qualified. Ask friends and family for recommendations just like you would for a doctor as word of mouth is one of the best ways to find valuable advisors.  You can also check trade organizations or regulatory bodies to see if there have been any violations or other disciplinary actions against an advisor.  See a listing of some places to check.

  • Certified Financial Planner Board of Standards, Inc.
    800-487-1497  www.cfp.net
  • North American Securities Administrators Association
    202-737-0900  www.nasaa.org
  • National Association of Insurance Commissioners
    816-783-8500  www.naic.org
  • Financial Industry Regulatory Authority
    800-289-9999  www.finra.org
  • Securities and Exchange Commission
    800-732-0330  www.sec.gov

Lastly, the most important aspect of selecting an advisor is making sure you are comfortable.  An advisor is an integral part of your life plan and you will share intimate details of your financial history and goals.  You need to ensure that you can and are willing to talk to them freely and openly. Good luck in choosing an advisor and congratulations on the steps you’re taking to better financial health.

Mrs.Shareeke Edmead-Nesi is a financial literacy expert, who offers a “life planning” approach to personal finance. She is a conscious spending lifestyle coach, who provides a progressive method of financial education to those interested in improving their current  lifestyles for the better. Shareeke is an engaging speaker, trainer and  blogger at www.theconsciousspender.com

You can contact Mrs. Edmead-Nesi at:

www.theconsciousspender.com

954-632-9001

© 2011 Shareeke Edmead-Nesi. All Rights Reserved

 

Divorcing Your Finances

Bathabile K. S. Mthombeni, J.D.

One of the more shocking experiences that a divorcing couple can face is realizing stark realities of the impact that divorce will have on their budgets.  Navigating the necessary tasks of dividing property and setting the amounts that one or the other spouse will contribute to items like child support and spousal maintenance requires a careful look at a couple’s finances.  Often, this is the first time that a couple has looked at its finances in such detail.  For some, this is the first time that one spouse learns the truth of the family’s financial situation.

The task of sorting through the family’s finances and making plans for the future can be overwhelming.  Help, however, is available.  There are financial advisers who are specially trained to work with couples who are going through a divorce.  A Certified Divorce Financial Analyst (CDF) can significantly reduce the stress and anxiety of making decisions about post-divorce finances.

I interviewed Lauren Prince, CDFA™, to find out more about what she does and how a CDFA’s services can be invaluable to a couple going through a divorce.

When should a couple consider hiring a CDFA™?

A Certified Divorce Financial Analyst™ [or “analyst”] is especially helpful in situations where a couple is ending a long-term marriage – one that has lasted for 10 years or more – the couple may have many different kinds of assets, and the couple has children.  A divorce dissolves a financial partnership so it is especially important for a couple to know what kinds of financial decisions must be made and how to make them so that they can remain financially stable in the long term.

Too many couples believe that they are saving money by doing the financial analysis and decision-making on their own.  However, that decision could end up costing them a lot more money in the future. Some people are highly organized to begin with and know how to create spreadsheets – know what data needs to go into the spreadsheet, how to calculate the present value of a pension, understand the details of their life insurance policy, and so forth.

Most people, however, will need someone to help them to construct a budget so that they are sure to have a good handle on what they do spend and whether that amount is reasonable and customary.  Doing this can be a real stumbling block for one or the other of the spouses – they can become paralyzed when they realize how much they spend on things – perhaps because they were not involved in it during the marriage or they never thought to ask about it.  This experience can be traumatic.  Those are the people who wind up in financial difficulties.

What special value does a Certified Divorce Financial Analyst™ bring to his or her practice that is different from any other type of financial advisor?

Financial advisers trained as Certified Divorce Financial Analysts™ are different from other financial advisers because they are trained to be especially sensitive to the uniquely difficult process that a divorcing couple is going through.  They understand the special decisions a divorcing couple must make.  An analyst who is trained to work with divorcing couples has the tools to determine maintenance payments, child support, and knows the ins and outs of analyzing a settlement proposal.  An analyst can also recommend a proposal: if a couple’s proposal isn’t working, she or he can make suggestions for improving the settlement. An analyst can come up with creative divisions of assets.  For example, if one spouse is concerned about taxes an analyst can suggest characterizing a certain amount as child support and another amount as maintenance.  Having the right tools and knowledge regarding the financial aspects of divorce is essential.

An analyst who specializes in the divorce context is also sensitive to the emotional turmoil involved and understands the value of being a calming influence.  Having empathy and compassion are important in the practice.

What does a CDFA™ do to help a couple going through a divorce?

Specialized understanding of money and divorce

An analyst can help a divorcing couple to maximize the way that their money works in the context of a divorce.  For example, while an analyst won’t give tax advice, he or she can suggest and recommend ways to take advantage of the tax code to limit tax liabilities and maximize credits.

Without guidance, a party may find herself or himself stuck with the bigger tax bill because she or he didn’t realize that the settlement gave him or her the assets with the higher liabilities – like the capital gains tax on non-primary residence. The analyst can point out the different kinds of tax deductions and tax credits that an attorney or even a CPA can miss.

The analyst can also help the couple to understand the need for insurance such as disability insurance, and should it be term life insurance or permanent life insurance, so that the   spouse and/or children is/are covered if anything happens to the major breadwinner.

For example, I worked with a couple where the husband had a  very adequate life insurance policy.  When I asked to look at the policy I found that it would collapse because no premiums had been paid.  The payments for the premiums had been coming out of the cash value of the policy but the cash value would be depleted in a year.  The couple hadn’t considered that.  They were relying on that insurance policy to cover support payments if anything happened to the husband but I caught the fact that the insurance policy was only going to last for another year.

Sometimes an analyst can also look at a tax return to see if one spouse has hidden assets.

Developing the post divorce budget

Most couples know their current budget as a married couple.  They need to project what their budgets will be as single people – as single parents perhaps.  Now they might have both a mortgage and rent to consider.  Food costs will be different.  Entertainment could be different.  The adviser helps them to develop a post divorce budget.

Developing the budget involves data gathering: collecting all of their tax returns for the last couple years, making a detailed list of their expenses, looking at their insurance policies, retirement plans, liabilities like credit cards, personal debts, student loans, mortgages, home equity [lines of credit], listing out all credit cards and the interest rates that are charged and the minimum balances, getting down to that level of detail.

Creating cash flow statements and financial projections

People going through a divorce generally don’t focus on post divorce economics.  In the moment, their focus is generally on the emotional and legal aspects of the divorce.  It seems that only after the divorce is over do they realize the true impact of the financial aspects of it.  That is when they begin to ask, “How will I survive on this [money] now that the emotional and legal issues are fading away?”  People will sign an agreement and complain they got a lousy settlement.  But they should have figured it out [before it was finalized].

If one spouse is reluctant to agree on a settlement because they’re afraid they won’t be able to meet their needs, an analyst can show whether the settlement will or will not last and can end the negotiations with the facts.  The analyst can create a statement that projects what each person’s finances will look like 5, 10, even 15 years into the future using agreed upon variable such as the inflation rate.

Knowing how much each person can spend after the divorce is important.  The analyst can help the couple to develop a spending plan that factors in regular expenses, major one-time expenses and inflation and demonstrates where the money will come from to satisfy the spending plan.  That is what the cash flow statement is about.  Preparing a balance statement that lists all assets to see where income can be generated to fill any gaps in the cash flow or to even take care of all the expenses – to see how long the money will last.  That is where net worth comes in: can be a real eye opener to see that one spouse will be set for life while the other’s money will only last 10 years.  What looked like a fair settlement has to go back to the drawing board because it won’t work.

Creating the financial agreement

A couple working with a Divorce Mediator can come up with a proposal for how to manage their post-divorce finances.  They can give that proposal to the adviser who will do a reality check to see if the proposed settlement will actually work over the long run.  The adviser can help the couple understand the relative benefits of arranging the settlement one way versus another: should the couple opt for spousal maintenance versus a property settlement?  Or, would it help one spouse with tax liability to characterize payments as alimony versus maintenance or child support?  The tax consequences are different.  For example, child support is neither taxable nor tax deductible but maintenance is tax deductable to the person paying it and taxable to the person receiving it.

If one person has been a homemaker, the budget can include a projection of what that person could earn by going back to work.  The budget can project how one level of income versus another will affect both income and tax liabilities.  The couple can then consider what to do if, for example, childcare expenses and commuting costs exceed the projected salary.  The analyst can also suggest career counseling when it seems that the clients could benefit from that.

How did you get into the field?

I stumbled onto the specialty.  My parents went through a divorce and that is when I discovered that there was training offered.  I became certified in 1994 and I have spent 15 years in the field.

More about Lauren

“Lauren Prince is the owner of Prince Financial Advisory,LLC. She is an independent CERTIFIED FINANCIAL PLANNER™ certificant, a certified mutual fund specialist, a certified divorce financial analyst™ and a certified long term care consultant.  Her business specializes in personal financial planning, investment management, and pre/post divorce financial analysis”

For more information please feel free to contact Ms. Prince at 212-286-1372,

Lauren@LPrince.com

http://www.lprince.com

© 2011 Bathabile K. S. Mthombeni, J.D.  All Rights Reserved

 


We’re Going to the Accountant and We’re . . .

Troy Kirschner, Professional Organizer

Yes it is that time of year again, tax time.  Well let’s get started with organizing your papers.  Your accountant will absolutely love you!  The first thing to do is separate your papers into to main categories; Income & Expenses.  You should have two large envelopes preferably 9” X 12” to separate your income documents in one and your expense receipts in the other.  Once this system is set up for tax year 2010 it will make your life much simpler when you need to go to the accountant next year.  You are setting it up now before your appointment to the accountant.  Get in the habit of keeping all relevant receipts in the expense envelope at the end of the day.  Now that you have gathered up all your receipts, just sort them by categories as listed below.

Income, mostly your day job, other jobs and pay, where you receive a 1099 and other income you want to report if you are self employed. Also included in this category would be interest bearing accounts that you would also receive a 1099.  I would also put all your donations in this category, in an itemized list.

Expenses that are allowable vary depending on how your income is derived.  I will speak to small business owners that are home based.  I suggest that you separate and organize your receipts under these headings:

  • Advertising/Marketing,
  • Office Supplies & Tools,
  • CAR: Gas/Tolls/Parking, Mileage,
  • Association/Professional dues,
  • Telephone,
  • Internet,
  • Education-seminars/webinars &
  • Gifts.

Remember it is important to make it a habit to store all your receipts in the expense envelope consistently, preferably in a 9” X 12” envelope.

By having your tax papers organized before going to your accountant you will surely save time and money that you would be charged if your accountant needs to 1st sort and organize before he/she can begin their job.

For more information about how Troy can help you, contact him at:

Troy Kirschner

Professional Organizer

www.ACESpaceKrafters.com

718 983-6885

© 2011 Troy Kirschner.  All Rights Reserved

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