After your divorce is signed, sealed and delivered, there is a reality. Money is not what it used to be! Not only do you have to live on less income, but you still have expenses to pay.
And to add insult to injury, you are probably paying off attorney’s fees, possibly refinancing costs along with others associated with the divorce process.
Now more than ever, you need to find ways to reduce your budget to match your income and save money after divorce.
How to save money after divorce so you can get back on your feet faster.
1. Make a budget.
Budgeting used to be tedious and confusing, but now there are all sorts of different apps that can help you make a budget. When money isn’t as bountiful as it once was, having a budget can make you feel in control of your financial life. While you may not stick to it religiously, knowing where you spend can assist you in making wiser financial choices so that you can save money after divorce.
2. Pay your bills on time.
Utilize your bank’s autopay features for all of your monthly recurring payments. It is easy and saves you from late fees or penalties. If you don’t pay credit card bills in full each month, make sure you make the minimum payment. While you will continue to incur interest, you will eliminate late fees. Make a resolution to yourself that going forward, unless there is a true emergency, you will not put any money on your credit card that you cannot pay off each month. Live within your means.
3. Keep track of the balance in your checking account.
Download your bank app and use it as often as you need to. Know your bank balance prior to writing checks, authorizing monthly payments, etc. Overdraft fees are exorbitant and literally throwing money into the trash.
4. Re-calculate your payroll deductions.
Once your divorce is finalized, reach out to your HR Department and get your payroll deductions changed to either single or head of household. Prior to changing your payroll deductions, speak with your CPA or tax preparer so they can analyze your new tax bracket and advise accordingly. You never want to be in a position of under-withholding.
5. Consider term life insurance.
If you need to maintain life insurance, consider term life insurance. While it has no cash surrender value, it is much cheaper than whole or universal life insurance.
6. Re-examine all your other insurance policies.
Can you live without insurance on your jewelry? What about personal liability insurance? Can you reduce the premium? Comparison shop on premium prices.
7. Refinance your home.
While home mortgage rates are not at their lowest, they are still fairly low. Can you lower your monthly payment or take out some additional equity and pay off your credit card bills? That could lower your overall monthly expenses and give you an additional tax break. Don’t take out equity from your home to be frivolous.
8. Different bank accounts for different things.
Remember when there were “Vacation Club Accounts” & “Holiday Club Accounts”? Keep your checking account for bills only. Separating accounts with goals in mind help you avoid spending money unnecessarily. The old saying, “Out of Sight, Out of Mind”; will ensure you have money for the extras. No dipping allowed!
9. Stay out of stores.
It is that simple. No temptation. This includes online shopping. If this is really difficult; set up parental controls for yourself. Changing these is a bit of work and may help prevent impulse shopping.
10. Eliminate take-out meals.
I fully understand the exhaustion of work, the kids, divorce, etc., but if you are looking to keep more in your pocket for the rewards of your hard work, stay away from Starbucks and take-out for dinner and lunch. No more fast food on the fly. It’s so much better for the pocketbook and your health.
There are so many more ways to make your life financially easier and to save money after divorce. Relieving some of the financial pressure will allow you to focus on the good things. Having gratitude and a positive outlook brings more abundance into your life.