When you are going through a divorce or the death of your spouse, the stress that you feel is immense. You are adjusting to a new reality, taking on responsibilities and chores that your former spouses took on, while also dealing with a painful emotional loss. I want to help you relieve financial stress as a new divorcee or widow.
In this type of transition, it’s important to have clarity regarding certain aspects of your life so that you can make the best decisions going forward. Now some things will take more time, and you won’t have immediate answers, and that’s okay.
But for some things, like your finances, getting organized will give you clarity as to your current situation and relieve some of the stress that you’re feeling.
With that in mind, here are 3 tips that will relieve financial stress and bring clarity to newly single people.
1. Create an updated budget
You may think that you won’t have enough information to know exactly what your income and expenses are during the first few months. Do your best anyways to estimate the figures, and then adjust your budget in 3 months when you have a better idea. You aren’t aiming for perfection the first time you do it, you are simply trying to get a better handle on your situation.
Remember to reflect only your salary and only your expenses, and not what you used to do as a couple. Also don’t forget to include any alimony, child support, or pension payments that you will receive.
2. Make sure you have enough cash
With the new budget that you’ve wisely created, you now have a rough idea of what you’ll be spending every month.
Next, combine the value of all of your accounts that have cash (checkings, savings, money market accounts).
Then, take the total cash amount and divide it by what you spend per month. So if you have $50,000 in cash, and you budgeted to spent $5,000/month, then you’ll get 10. That number represents how many months you can live off of your savings, if need be.
For couples who have two incomes, 3 months worth of expenses in cash might work. But for single people, especially widows and divorcees, I recommend at least 6 months of your expenses in cash, in an account that is easily accessible.
3. Create and implement a plan
The power of having a plan in place is incredible.
People who put their goals down on paper are 42% more likely to achieve their goals. And people who share their goals with someone are even more likely to hit their targets.
So ask yourself some questions in this new period of your life: Are you where you want to be in your career? When would you like to retire? What would you like to do in retirement? What things in life have you been itching to do but haven’t gotten around to yet?
Make a list of your questions and answers and share them with a friend. And then write down 1 thing that you’ll do to reach each goal.
Once you’ve implemented these three tips, you will undoubtedly feel less stress and be more in control of your situation. And if you still need more help, send me an email at scott@dev-forthrightfinances.pantheonsite.io. I’m always happy to help.