Divorce, Debt, and Finances

Tips, Struggles and Successes navigating Divorce, Debt and Finances

Getting a Handle on Your Finances after Divorce

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Getting a Handle on Your Finances after DivorceAs you start your new life as a single you want to have a clean slate, emotionally and financially. Hopefully your divorce settlement left you with enough funds and assets to establish a home for yourself and your children, if they are still living with you.

Some of us may carry debt from the divorce, or debt that was created as a result of attorney fees, moving expenses, or purchases made to set up house.

Before you start digging a deep hole of debt you can't get out of consider tracking your expenses to keep you on the straight and narrow.

Many of us don't realize we are digging a hole with debt until we feel trapped. This is because we fail to take the first step to successful budgeting, tracking our expenses. By tracking every expense you can gain a clear picture of where your money goes and begin to categorize expenses, as well as, make any necessary cutbacks. Once you start, you will be amazed at how much money you didn't even realize you were spending.

Tracking daily expenses

The first step is to track every penny you spend and document it somewhere. This goes for the morning cup of coffee, afternoon vending machine stops, and last minute grocery or convenience store pick ups on the way home from work. You will need a tracking method that works for you; here are a few you might try:

  • a small notebook
  • a smart phone app or the notes setting
  • a small calendar or appointment book
  • personal finance software Quicken or Money
  • a spreadsheet

When tracking expenses there isn't a right or wrong way, but actually doing it religiously is essential. Don't forget to track all of your income as well. Be sure to include your paycheck, child support or alimony you may receive, as well as gifts, spare change, and freelance work. By tracking every penny that comes into or out of your wallet you will be able to see your true financial picture and build a money management strategy that works for you.

Make it a habit

Once you have a system in place for tracking, make it a habit. After a few weeks you will be so used to tracking to the penny, you won't feel as overwhelmed. The goal is to track all of your expenses for at least a month. Then you can use the results to devise a plan for your financial future.

It is important to keep doing what you were doing before you started tracking. The changes to your spending will come after you see what you are spending and where you can make adjustments.

Tips for successful tracking

We all know spending money is easy to do. If we don't have cash on hand many of us have a debit or credit card ready at the helm to make a purchase. The key to successful tracking again lies in making sure every penny counts.

  • Receipts are your friend.   Proof of purchase will make it easier to track to the penny if you are planning to write everything down after you return home to your tracking method. It will be easy to miss the $.54 at the end of your lunch purchase or the $.75 you spent on gum at the convenience store. Make a place in your wallet or purse designated specifically for receipts. Make sure to empty it out daily and mark the expenses in your tracking method before you trash the receipts.
  • Don't wait for tomorrow. Failing to track expenses daily may result in a bulging wallet or purse and create the issue of missing expenses. So diligently stick to a daily routine of entering the receipts and disposing of them afterwards.
  • Expenses without a receipt.  Automatic debits from your account, vending machines, and bills that are not paid monthly may easily be missed. Pay close attention to these transactions and develop a method for tracking them that works for you. 

By tracking every penny you will gain an understanding of EXACTLY where your money goes, not where you THINK it goes. From this exercise you will be fully prepared to create a budget, devise a financial plan, and feel good about yourself and your financial future.

Suzanne Cramer

Suzanne is a certified credit counselor for CareOne Debt Relief Services and is a Social Media Specialist. Suzanne supports our Ask the Expert forums as a coach and writes for our A Straight Talk on Debt and Divorce, Debt and Finances blogs. You can also follow Suzanne on Twitter where she shares the latest debt industry news, and tips to keep your finances in check with her @AskCareOne and @ADivorcedMom accounts

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