Financial strategies for tightening the belt after divorce, in ways that don’t feel "bad"
Anyone who has been through a divorce can tell you that it can be financially devastating. Having to adjust from living with the resources you had as a couple to life on your own can be hard, but there are steps you can take to make your new budget more comfortable. Here are some financial strategies for tightening the belt after divorce, in ways that don’t feel “bad”.
Develop a Realistic Budget
One of the first steps to take is developing a workable household budget. If you have been used to spending without considering income and expenses, now is the time to get all of your debts, bills, and income information together and have an honest look at where you stand. Knowing what you have to work with each month can help you plan. However, it's important to create a realistic budget which allows for unexpected expenses and living within your means. Although examining the numbers can be sobering, it can also help you feel like you are more in control.
Eliminate Unnecessary Expenses
After you have taken a look at your budget, you may have identified some unnecessary expenses. By making small adjustments, trimming expenditures doesn't have to mean going without. If your daily trip to Starbuck's costs you $100 per month, try cutting back to once or twice a week. Likewise, you may notice you are paying for a pricey health club or other memberships which you never use. You could cancel these memberships and find less expensive or free alternatives. If you have a full cable television package, consider cutting the cord and streaming or even sharing streaming services with someone else.
Start a Savings Habit
When money is tight, it can seem impossible to think about setting any aside for savings. However, most financial experts will tell you that saving any amount each month is better than nothing. When you get into the habit of saving each month, you can help build an emergency fund which can add up over time. Even if it is $5 a week, getting into this practice is a positive habit.
Get Creative with Gifts
If you are a parent, you may be worried about reducing birthdays and holiday gift-giving for your kids. If possible, talk to the other parent and see if you can coordinate your efforts. You can also ask friends and family to consider helping to pay for parties or contributing to more expensive gifts. When it comes to gifts between you and your loved ones, you could transition to having a special lunch or making something for one another rather than exchanging lavish items on special occasions.
Your Kids Want to be With You
Sometimes, newly single parents feel like they have to buy their kids things or pay for expensive activities during their placement time. Your children will happily accept gifts and costly experiences, but it's important to remember your placement time is not about being the "fun" parent. It's about spending quality time together. You can save money by staying home for a family movie or game night. There are also numerous ways to enjoy time together outdoors for free. When you focus on being together rather than how much money you spend, the emphasis stays on your relationship.
Attorney Karyn Youso of First Look Family Law understands the financial challenges which come with divorce and can help you assess your situation and connect with the right resources. Contact us at First Look Family Law today to schedule a consultation and let us take a “first look” at your situation.