Divorce isn’t easy. Not only will you suffer emotionally, but you may also experience financial turmoil. For some people, it’s the first time that they’re living on a single income. The good news is you can learn to live on your own and restore your finances to a healthy existence. Here’s how.
Create a Budget
One of the first steps to adjusting to life on your own is creating a household budget. The initial review of it can be devastating. However, once you accept that you now live on a single income you’ll be able to move forward. A budget will allow you to pay down debt at the same time you create savings for things you need and want. If you’re not sure how to create a budget, go online and print out one of the many free budget worksheets that are available.
Get a Handle on Debt
After the divorce, you may find that you have insurmountable amounts of debt. Don’t become discouraged. You can start with one credit card, the one with the highest interest rate or with the highest balance, and pay that one off first. If you don’t make enough to pay just the minimum payment required, you still have another option.
You can apply for a a loan through a company like Western Shamrock. This will remove the balances from your cards and afford you one fixed, lower monthly payment that’s more manageable.
Tuck Money Away
With most of your monthly income consumed with your monthly expenses, it may seem impossible to save money. However, it’s necessary. Money set aside in a savings account for financial emergencies such as a home or auto repair will prevent the need for borrowing from money already allocated to pay bills. Start with small deposits of $10 or $20 dollars. As you reduce your debt, you can increase the amount.
Make Timely Payments
Paying your bills on time will reduce costs and improve your credit score. You won’t tack on late fees or overdraft your checking account. Since 35% of your credit score comes from how you pay your bills, you can raise it and enjoy having access to lower loan interest rates. Unfortunately, any reported late payments can remain on your report for up to seven years.
You need things like housing, furniture, food and clothing, but you don’t need to pay top dollar to acquire them. If your apartment or home is too expensive, search for a new place to live that better fits your budget. Ordering food out can cost hundreds over a single month. Instead, brown-bag your lunch and treat yourself to a meal out once a month.
On shopping trips research store prices first and use coupons. If you need furniture check out estate sales or consignment shops. Most times, the furniture just needs a fresh coat of paint or minor repairs to restore it.
Cable, internet, and cell phones can cost hundreds monthly. Shop around to get the lowest prices and check to see if some service providers provide cable and internet or internet and cell services. Bundling your home and auto insurance with the same carrier will also lower your monthly premiums.
Life is very different after a divorce and can take time to make the change. However, with your finances, you can achieve personal wealth and sustain a sound financial future. Create a household budget, put money aside for emergencies, and reel in wasteful spending.