Post Divorce: Focus on New Financial Goals
Chart a Course and Stay on it
Chances are that you and your former spouse had agreed upon and were putting money aside for a goal. That may have been a world cruise on the QEII, a vacation home in Vail or buying the sailboat that you always wanted. No matter what you were saving for, you were pulling together. Now you have to row alone. Be clear about where you are headed and plot a course to get there. Here are some suggestions:
Prioritize Your Goals
You may need a car or orthodontia for your child. While these more immediate needs must be addressed, don’t forego building an emergency fund or contributing to your retirement plans.
Start with the Basics
It’s easy to feel overwhelmed, so start at square one. Determine your income and expenses. Hopefully you’ll be in the black but even if you come up short, you need to know the deficit you’ll have to make up.
Create a Budget
Devise a budget that will enable you to meet your goals then find a way to work your plan. Even if you do come out ahead each month, you’ll still need to set aside money for your long-term financial goals. And that means saving and/or investing a portion of your income every month.
Up Your Income
Consider getting a second job, at least temporarily. You may be able to sell artwork, jewelry, or the exercise equipment collecting dust in the basement. Trade your professional skills or personal talents for haircuts or your child’s piano lessons.
Stretch Your Budget
Clip those coupons. Maybe buy a cheaper brand of gas – or use regular instead of premium. Can you really tell the difference between the more expensive ketchup you usually get, and the store brand? And seriously — do you need two lattes per day? Search out off-season bargains. It may be a pain, but brown-bagging your lunch does save money. Comparison-shop for better prices on monthly services such as house and car insurance, cable and cell phone providers.
Pay Down Debts
If you have debts, pay off the highest interest one first. Or perhaps you can negotiate a reduced interest rate and use the difference towards a savings account for college tuition.
Don’t Go It Alone: Get Financial Advice
You needn’t sort all this out on your own. Hiring a qualified financial planner is an investment in your future and an excellent resource to help you prioritize, plan and achieve your financial independence and goals. Just make sure you understand how they get paid -fee or commission-based and ask about fiduciary responsibility.
For more information, check out “Making Sound Financial Decisions Post-Divorce”