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Quick Budgeting Steps & Tips
The overwhelming issues surrounding your divorce include financial worries and a decrease in disposable income. Suddenly one, or the same income is supporting two households. Perhaps your support is inconsistent and often late. The goal here is to get your budget closer to a ‘balance’. You don’t have to be a financial wizard to take control.
Maybe, like I was, you were financially dependent on your spouse and have been out of the work force for several years, raising children. All of these circumstances lead to a great amount of stress during divorce. But if you get your finances under control you will have more energy left to deal with children and other requirements. Finances are also highly tied to our emotions and self esteem so if we have some measure of control here we feel a lot better about ourselves everywhere else. Take these simple steps to begin your financial independence to maintain less debt and more cash.
Quick Budgeting Steps
- If you haven’t already, open your own bank account and credit card. You want to establish your credit score.
- Draft a monthly budget by listing all of your expenses and all sources of income
- Do a quick analysis; what is the number you get when you subtract your expenses from your income? Is it in the minus? Is it in the plus?
- If your number is below zero; start cutting back expenses immediately
- If your number is above zero you can start a fund every month for legal expenses or emergencies
Where can you cut back on your expenses? How much per month can you put away into a fund for legal fees or emergencies? Getting your number above zero for the following month should be your immediate goal. Once you get your budget ‘balanced’ you can relax in knowing you’re not creating debt every month and you’re meeting your expenses.
Quick Budgeting Tips to Saving;
- Cut back restaurant eating
- Buy less in bulk (we don’t need boxes of Mr. Clean or Drano at the ready when one will do)
- Grocery shop smart (don’t go when you’re hungry, use coupons buy the specials)
- CD/book /clothes swap with friends (keep a fresh collection without spending $)
- Less spa treatments (i.e. 4x per yr instead of 12x per yr)
- Cut back cell phone plans (how many texts are necessary?)
- Pay credit cards on time to avoid late fees (late fees can cost $80-$100/month which is up to $1,200/yr! if you get charged late fees, call and complain they will remove them once or twice savings= $200)
- Check out online shopping and entertainment coupons
- Keep medical insurance plans up to date to avoid high costs for care
- Use cash only for a month of personal expenses (put $1,000 in an envelope and replace cash with a receipt until the cash is gone and the envelope is full of receipts. Upon review you’ll see where you are spending your money)
P.S. I don’t do all of these things but I try to do one or two…no one’s perfect
If you are entitled to child/spousal support and are not receiving it speak to a lawyer immediately about arranging a legal agreement with your ex in order to get your due support. Your support will assist you in meeting expenses and consequently alleviate stress. Remember you are in a state of transition at the initial stage of separation. You are likely trying to figure out your career options which might include upgrading. Upgrading your skills and education costs money therefore your support is key to getting back on your feet. If you feel overwhelmed take a deep breath and take one ‘bite’ at a time. There is no need to rush into any financial decisions especially if your ex is able to support you until you are established. Support can be long term as well if you were in a long term marriage (equal to 20 years or longer). Watch for my upcoming article “Deadbeat 911” to find out more about taking action to get your child support.
Financial independence can be overwhelming at first but once you sit down and take a look at the situation, it isn’t so difficult to harness spending and find a balance. But there will be unexpected expenses from time to time to throw you off. Like the time my hot water tank blew. Of course it was the middle of winter and I hadn’t been receiving any support so to pay an extra $500 was discouraging but I had no choice. I dipped into my savings. Then there was the time the starter on my truck went…well, you get the picture. Expect the unexpected.
Be cognizant of your finances, take action and finally enjoy the results of being in financial control. Financial independence is actually a great lesson and challenge of divorce. It is an important life skill. Remember, there is no perfect formula to money management as it is an evolving, lifelong process.
I recommended the book Jean Chatzky, Make Money Not Excuses It’s a great starter book for those of us who have not been economically independent.
What is your budget challenge? How did you learn to make “ends meet”?