If a divorce has left you with less finances than before, re-evaluating and creating a new budget can help you gain financial security and prevent ruining your credit and mounting debt.
The first step is separating your emotions from your finances. It is easier said than done, but carrying any unresolved bitterness or anger into sound money decisions will not help your financial situation. There is life after divorce and for many people it can lead to a better life.
List All Current Income
Sit down and create a list of all incoming finances, wages from employment, etc. Do not include any one-time or lump sum payments yet. Just determine what you will generate on a monthly basis. It is essential you know how much money you have to live on.
List All Set Expenses
After noting all monthly income, begin a new list of all your monthly expenses. Mortgage payments, car payments, insurance, medical bills, credit card payments, utility bills, child support, alimony and all other monthly expenses need to be included. Compare this list to your current income and determine if you have enough to cover your expenses.
If you do not, then you need to decide if there are expenditures you can eliminate and bring your expense rate into your income rate. You may also need to decide if a second job is an appropriate option to increase your monthly income.
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Resolve Joint Accounts and Credit Cards
Many married couples have joint bank accounts and credit cards. Most of the details concerning joint banking accounts and credit cards will be hashed out during court hearings, however it is up to the individuals to close any joint accounts and start new individual accounts.
Credit card debt can be one of the most crippling aspects of any tight budget. Consider credit card consolidation to resolve your credit card debt faster and free up your money for more essential expenses. Credit card consolidation allows you to merge multiple credit card payments into one payment.
Debt consolidation companies allow you to pay off all your credit card bills at a reduced interest rate, have one single and manageable payment, eliminate or reduce late charges or over the limit fees and stop harassing calls from debt collectors.
Take Control Of Your Finances
It can be overwhelming and frightening to realize it all falls on your shoulders now, but it is better to make that realization from the beginning and empower yourself by taking control of your financial situation. Create a workable budget, adhere to it and avoid the stress of post-divorce financial instability.