6 Ways to Get Your Money (and Your Mind) Together After Divorce
Divorce is tough. Dealing with the fallout of kids, housing, and money issues is even tougher. It is a high-stress and potentially confusing period. It’s enough to drive you insane, but now is not the time to fall apart. Here are six ways to get your money (and your mind) straight after divorce:
Establish a New Bank Account
If you were like most couples, you probably had a joint account, if not a separate account. You and your ex used the same bank, but now it’s time for a change of scenery. After the divorce, you are free to establish new relationships, see other people, and relish your freedom. Why is meeting a new bank and establishing a relationship with a new institution any different? A new banking relationship will give you a fresh outlook, fresh new faces, and hopefully a fresh new boost to your finances. Utilize any classes offered in your city as well as the financial counseling services offered.
Establish a “Me” Fund
In marriage, you probably focused all your attention on your spouse and/or your kids. After the divorce, you can begin focusing on yourself. Create a “me” fund to fuel your life with fun and pampering. At first it might feel strange to set money aside for yourself, but you will get used to it.
This is a challenge for me, so I’m listing it to remind me to do it for myself. What a difference a day makes when you can go out a buy something you want without feeling guilty. Establish a “me” fund and bask in the feeling of financial freedom!
This feels scary, but it’s the advice a divorce attorney gave me when I explained how much debt my ex left in my lap. I resisted for three or four years before I finally did it. My resistance came from long-held beliefs that bankruptcy would ruin my financial life and be a black spot on my credit. The reality is, I was drowning in debt I didn’t create, and my credit was already in the toilet. Filing for bankruptcy would be relief and a way to unburden me from past financial potholes.
The process was moderately painless and took less than three months to complete. The discharge happened rather quickly because there was no objection from creditors. Now I am on my way to better financial health and have a clean financial slate to rebuild my life. You can do the same if applicable.
Request Monetary Gifts on Holidays
Do you really need another scarf or toaster for your birthday or Christmas? Wouldn’t you be better off with a nicely padded emergency fund? For some people, it feels weird answering the question, “What do you want for your birthday/Christmas?” This year, answer the question loudly and proudly by saying, “Money, honey!”
Let people know you are creating an emergency fund now that you are divorced, and they will probably be happy to help. Money in the bank for emergencies has a funny way of making you feel capable of handling anything that comes your way. That is worth stretching beyond your proprietary boundaries isn’t it?
Sell Old Jewelry, Clothes, Etc.
Did your darling ex give you a big ol’ hunkin’ diamond ring, a fabulous floor-length fur, or a leather coat? How about a cute lil’ sports car? All the jewelry, clothing, and other luxury items can be sold and used to pad your bank account. The proceeds can jumpstart your new life and put you financially in the black. Forget about nostalgia and start thinking about a new wardrobe, a retirement fund, or that trip around the world you’ve been dreaming of. Selling off valuables is a great way to clear your mind, reset your life’s purpose, and keep moving forward.
Create a Realistic Spending Plan
Now that you have followed the first five steps in this financial (and mental) makeover, it is time to create a realistic spending plan. You are a now a one-income household, and barring any child support you may be eligible/entitled to receive, you must begin living on one income. Your spending plan must include all your expenses, savings, and investments you anticipate.
Review your bank account for three to six months to see your spending trends. Connect your accounts to Mint.com or some other account tracking system to get a realistic idea of where your money is going. From that information, you can create your spending plan. I recommend that you don’t include child support or alimony in the plan unless you know it is guaranteed to be consistent. Otherwise, treat it as an occasional source of income. It may sound counter-intuitive to do this, but your spending plan should only be based on your earned income. This is part of getting your finances and your mind together. Planning for the predictable is the wisest move you can make and a sure path to peace of mind.
No matter how tough divorce is on your money and your mind, you can come out smelling like a rose. It takes time, planning, and perseverance to see the other side of this life-changing event. But you can do this! I believe in you.
Samantha Gregory is a single mom, financial empowerment speaker, coach, and a published author. She is the editor of RichSingleMomma.com, a personal finance, parenting, and personal development blog for solo moms. She offers the Goodbye Broke Hello Prosperity free five-day e-course on her website.