One of the tougher things that can come with a divorce is trying to determine just how you will provide for your children on your income alone. While you may be getting child support, you cannot fully count on those payments to shore up your budget. It’s unlikely the support will equal what was available while you were with your spouse, and there is always a chance your former spouse will become unable to pay. With the emotional fallout divorce can bring, you’ll want to be at least financially secure to tap into that needed stability. As you make the transition to a one-income household, keep the following tips in mind.
Make a Household Budget
Everyone knows that making a household budget is a wise move, but it’s common for people not to have one. If this is you, now is the time to sit down and create one. To do this, you will need all of your monthly bills and your income. Separate the mandatory costs – such as food, your car, and your house bills – from the discretionary expenses such as eating out and going to the movies. After you know what your costs are, you can decide how to spend your income on them. Once you do that, you can put everyone in the house, including yourself, on an allowance so you cover all of your bills comfortably.
If you have children who are old enough to understand finances, speak to them about how any discretionary income you have should be spent. Be realistic about what is happening, but don’t scare them. Help your older children see budgeting and financial responsibility in a positive light.
Plan for a Better Future
Once you make a budget, if you realize there is just no way your income will meet your basic costs, you need to make some changes. Think about going back to school for a degree in a demand-filled field that will help you land a better-paying job, such as healthcare or technology. You can apply for grants, scholarships and student loans to make this possible. Look at what you can do to help decrease your spending. If you live somewhere with a great public transportation system, for example, you may be able to get around without owning a car. You could also downsize your home.
If your budget is just shy of meeting your requirements, set guidelines to decrease spending so it isn’t as tight. Getting rid of some discretionary spending is usually helpful here.
Build Your Credit Up
Your credit is important for your long-term financial health. If your bills and credit accounts were always in your spouse’s name, you will have to start from scratch here. Open a new credit card, but don’t rely on the card to pay your bills. Pay off the balance each month so it gets reported to the major credit bureaus. Over time, this will help you qualify for home or car loans at better rates than you would get without good credit. If you rent, your landlord may be able to report your timely payments to credit bureaus as well.
Start Saving More
Once you have a budget in place and more money coming into your household than leaving, start to save as much as you can. In fact, put any child or spousal support you receive into your savings. Ideally, you want to have enough money to cover from three to six months of expenses, at the very least. This is so you can still cover your bills if something happens that requires you to spend an unexpected amount of money or prevents you from earning your full income.