Managing Your Finances After Divorce
Managing your finances after divorce can sometimes feel like an impossible task, especially if the amount of money coming into your household is much less than when you were married. While it's not easy to get by in today's economy, you can begin taking control of the situation so you can make it financially. Read on for some tips to help you get started.
Divorced Doesn't Have To Mean Destitute
Divorced women face changes in their life that are both emotionally and financially devastating. As pointed out in many studies, a higher percentage of women will face a decline in their financial stability as compared to men. And it's even worse for those who have delayed their careers to stay home and take care of their families. If you are facing some tough times due to divorce, the following information can help you regroup, refocus and get your finances back on track again.
Personal Finance 101
Once you are on your own, you will be responsible for making decisions regarding your personal finances. As difficult as it may be, you will have to begin thinking in terms of your future not the past. Obviously it is difficult to generalize financial advice since each person's situation will be unique. There are however basic personal finance tips that apply to everyone regardless of their financial circumstances.
- Create a Budget- Having a budget is key in managing your finances after divorce. In short a budget will help you by tracking your income and expenses. You will need to collect all of your statements for utilities, rent/mortgage and all other regular expenses to better understand your income needs. Once you have a better understanding of where your money is coming from and going to, you will be in a better position to eliminate unnecessary expenses. Having a budget also provides the structure you need in to incorporate saving money for your future financial needs.
- Learn to Live within Your Means- One of the toughest challenges that newly divorced women face is having to adjust to a different lifestyle and reduced standard of living. Going from a two income household where you could depend on your husband's paycheck to help cover bills to a single income home can make anyone's head spin. You may have to learn to live on less money making it essential to re-examine your spending habits. All consumers, not just divorcees can benefit from learning to live below their means. To put it simply, this means spending less money than you make. People who fail to learn this lesson are bound to struggle financially making it impossible to reach financial goals.
- Reduce Debt and Increase Savings- A common sense approach to personal finance, debt elimination and building savings are vital to your financial security. Make all efforts to pay off any debts that you already have, while avoiding incurring more debt. Having a well-padded savings account is the best way to avoid going in debt in the future. Create an emergency fund to help pay for unexpected expenses and allocate a percentage of your income to invest in your future.
- Seek and Accept Assistance That Is Available- Do not allow your new status as a divorced woman or single mother be a cause of shame or embarrassment. The fact is there are many, many women in your situation, resulting in government or community programs that have been created and designed to provide assistance to people facing the same circumstances. You may qualify for free or reduced cost health care coverage and assistance for buying food and other necessities for yourself or your children.
No one will argue the fact that going through a divorce is hard on everyone involved. How you deal with your finances after divorce and the other areas of your life that change as a result of the divorce will determine your long term success or failure. By following the tips listed above you can prevent a life long struggle with money. Things will undoubtedly be tough in the beginning.
But for the woman who focus and work toward financial independence, the results will be well worth the effort.
Article by Trisha Wagner; written exclusively for WomansDivorce.com.
Trisha Wagner is an independent writer for DepositAccounts.com, the site which allows you to evaluate rates of deposit accounts from many different banks. Trisha has written many articles covering personal finance and savings account issues. This article may not be copied or republished.
The following articles will give you some more tips on handling your finances after divorce: