I was attracted to a particular article I saw on the internet because I know that one of hardest things to get your arms around after divorce is the BIG area of money management. I have found that the best way to stay afloat financially is to stay organized. Here are some ideas from that article that will help you do that.
The simplest thing to do is to make some order of the bills – categorize and create folders for them. And while you’re in this mindset, organize important records too. Critical records like your will, birth certificate, passport, 401(k) statements and tax returns should be stored in a safe, accessible place.
It is critical to determine your monthly spending. Once all your financial documents are organized, it becomes much easier to evaluate your spending habits. Find out what you’re spending your money on each month, each week, and even each day. Write down from your checkbook and credit card statements what you’ve actually spent. I can tell you that many of us have been shocked by what we discovered!
It goes without saying (but, because it’s so crucial, I’ll say it anyway) “You have to cut non-essential spending”. By carefully tracking your spending, you’ll be able to calculate what you spend on essential items and what your non-essential spending habits are too. A suggestion for minimizing non-essential purchases is to pay cash for these items. You’re less likely to spend money if you don’t use your credit card. It’s hard to do, but it’s so worth the effort to do it.
Always think in terms of reducing debt. In order to make that happen you need to stay on top of your credit. For example, if you pay only the monthly minimum credit card payment, it could take years and thousands of dollars in interest to pay off a single card. If you can’t pay your balances off in full, think about reducing the number of credit cards you use. Find one or two cards with a low percentage rate and no annual fee.
Stockpile some savings. It will significantly reduce your financial stress to know that you have at least three (six is better) months of living expenses in the bank. This strategy will guarantee you can pay those unexpected financial obligations that always come up.
Finally, another benefit of organizing your finances is that it enables you to create a backup plan. For example: If you happen to lose your job in this tough economy, you should know what you need to do. Make an appointment with a financial planner and put all the numbers you’ve been recording on paper. Taking this step will tell you whether or not you need to find a new full-time job, or at least find a part-time commitment.
With a little organization and a clear plan of action, you will be on your way to a manageable budget. There is life after divorce, and it can be one that includes financial freedom! ……so start now.
 This is a guest post by Judy Smith. Judy specializes in helping women create a new life after divorce. She uses experience and skills acquired over a lifetime to help divorced people transform their lives. Get the personalized help you need by joining her Divorce Coaching Club.
“It’s never too late to live happily ever after.” |
