Are you struggling financially during or after a divorce? Maybe you haven't gone through a divorce but do have some financial problems. If so, read on! I hope my story can help give you some encouragement and tips to rebuild this part of your life.
It took nearly 5 years after my divorce to get everything back in order. My finances are now in better shape than they have ever been, even though a third of my salary is going towards child support for kids that I have half the time. I've paid off tens of thousands of dollars worth of debt including all credit cards, and more than doubled my overall net worth in less than 5 years.
If you had asked me right after my divorce, I would have told you that I was not sure how I was going to make ends meet. I was living in a 2 bedroom rental property with 3 kids, paying child support on top of buying them all new stuff for the new place, and had over $100k worth of debt, $20k of which was high interest credit card debt.
- First of all, it will get better. Immediately following a divorce or separation, everything is fluctuating including finances, this is NORMAL! The solution is baby steps in the right direction (DO NOT baby step in the wrong direction!!!)
- You need to realize that you and only you are responsible for your own finances now. It's time to step up and get some education especially if you've never taken any financial planning courses. I went through Dave Ramsey's Financial Peace University and it was well worth the time and paid for itself within a month. If nothing else write down what income, bills, and debts you have and then write down a spending plan (budget)!
- Look at a month's spending at a time, try not to go much further out than that or you'll get overwhelmed. Right now it's triage time, the biggest thing is to get all your bills paid for this month and to stop digging yourself a bigger hole. If you don't have the money, don't spend it!!! Later you can refine the plan to take into account things like Christmas, car repairs, and maybe even a vacation.
- Refine your plan every single month, things change! Take the flexible spending stuff like dining, groceries, and entertainment out in cash, that way you know when it's gone. You may want to just start with a simple piece of paper, excel spreadsheet, or get a little more fancy with software like Quicken or You Need a Budget.
- Once you have everything written down, you may discover that your expenses are way beyond your income. That's OK, that's what you wanted to figure out. You either have to find a way to reduce expenses or increase your income (work more). Reducing expenses is the way to go if at all possible, if you have kids in particular they want to spend time with you more than they want to get new toys, ride in fancy cars, or live in fancy houses. I no longer live in a 2 bedroom rental with 3 kids in 1 room, but they still look back fondly at that place because we spent a lot of time together there. My kids appreciated me showing up more than they appreciated stuff.
- Educate yourself on finances! Read through the books I recommend in the financial section of Power Up! - Books for Personal Development
Recovering Financially After a Divorce Reviewed by Don Smith on 3:16:00 PM Rating: