In my CPA practice and SeedTrust Escrow I consult with clients on many financial matters such as taxes, estate planning, payroll, and so on.
One of the matters that I have dealt with lately is helping our surrogate clients budget for their surrogacy journey. Because surrogates receive a monthly payment in addition to their regular income (if they are working) this sudden influx of cash could seem like they have an ample amount of spending money, however they should be saving as much as they can, as the monthly payment will stop after nine months.
To help those surrogates who need assistance with budgeting, I designed a free budget planning template which includes a specific line item for Surrogacy Income. Additionally, at the bottom of each section you will see percentages. These percentages correlate to how much you should spend on each category from your take home pay. If one category has 5-10%, then 5-10% of your take home pay should be spent in that area. Not everyone will have a perfect budget or the proper allocations. For example, someone who lives San Francisco might spend more of their take home income on rent, as that area has much higher rents than the rest of the nation. The category percentages are just estimates and general guidelines for how income should be allocated.
At first glance the budget tool may seem daunting, but dedicating an hour of time to plugging in all of your numbers will give you a clear snapshot of where your money is going and where you could possibly cut back. I just recently completed the budget with one of our clients and she discovered she could completely cut her $275 a month cable bill down to $69 for internet only. She can still watch her favorite shows through her Apple TV and a Hulu subscription, which costs $7.99. By “trimming the fat” in this one area she was able to save $198 a month! We then reallocated this extra $198 a month into her emergency savings fund, which will give her some security should an unexpected expense pop-up.
I hope this budgeting tool helps you obtain a clear picture of your expenses and gives you an idea of where you can reduce and eliminate unnecessary expenses.
Should you have any questions please leave them in the comment section and I will respond as soon as I can.
—Edward Brockschmidt, CPA & Co-Founder of SeedTrust Escrow
Every Friday, CPA and Co-Founder of SeedTrust, Edward Brockschimdt, will focus on “financial fitness” by answering the most commonly asked financial and tax questions relating to surrogacy and egg-donation.
If you have a question that you would like answered, please comment or drop us a line at [email protected] and we may answer your question in the upcoming weeks.
For additional answers to tax related questions please see Brock’s profile on JustAnswer.com by clicking here.
