Let me begin this post with a disclaimer: I am NOT a financial expert nor do I have all my ducks in a row financially. I am still learning about finances post-divorce. Let’s learn about this together, shall we?
1. Make a budget and stick to it: This is the number one thing I have been told over the years, even when I was married. I have what I like to call a “scaffold” budget – I have all the categories in place but don’t have all the details filled in. I have enough information to fill in my budget, but I still have to flesh it out. There are many budget resources online – they go from uber simple to insanely complicated. Find the one that is right for you and start your budget. It will take you a few months to get your budget to be more solid, but you will learn about what you spend your money on. If you need help, go to your local bank. They have people there who will help you with your finances. Take it in bite-sized pieces.
2. Do not live above your means: You don’t have to keep up with the Joneses, you don’t need the latest and greatest and most updatest of anything, you don’t need to impress anyone. You have just been through a kn0ck-down-drag-out emotionally and financially. Don’t jump back into a financial mess. Shop the sales rack at the clothing stores, use coupons at the grocery store, get a grocery store’s ‘rewards’ card and use it to save on gas, etc. You may be living with the bare minimum until you get back on your feet. That’s okay. Dave Ramsey says, “Live like no one else so you can live like no one else.” Think about that.
3. If you must have a credit card, use a secured card with a low APR: You can find these all over the internet. Be purposeful about paying your card on time. A secured card uses money that you put on it (pre-paid), not money that you don’t have.
4. Pay bills on time: I have learned the hard way that if you don’t pay your bills on time, a) your credit gets socked and b) you rack up more $$ in late fees. Pay your bills on time. The late fees are not worth it. Pay off your smaller bills first, then turn around and put that money on a larger bill. Paying off the smaller bills first cultivates the habit of paying bills. It also makes you feel good when you pay off a bill and it’s motivation to pay off others.
5. Pare down: Assess what items you are paying on monthly. Do you really need cable? Internet? Fake nails? Many of the little ‘luxuries’ will need to go away until you get back on your financial feet. Learn to live with less. I have not had cable for a while. I get the basic TV channels with my ‘key’ antenna and I read a lot. I keep my heat at a lower setting. (Of course it helps that I am always hot anyway!!)
6. Shop for the future: What does this mean?! When you go grocery shopping, stock up on non-perishables that will last a while – like rice and beans. Buy produce on sale. If your grocery store has a 10 for $10 sale, take full advantage of it! It’s tempting to go to the grocery store on a daily basis, but that doesn’t save much money. Plan out your menu for several days or weeks and shop accordingly. I always keep a package of rice and a couple of cans of beans on hand. If I am at the end of the month and down to my last couple of bucks, I will break out the beans and rice. It’s kind of boring, but at least it’s nutritious and filling.
7. Shop wise: Look for sales. Don’t impulse buy. If you want something, wait 30 days to buy it. If you still want it, buy it but do so with cash. In that 30 days, a) the item may go on drastic sale, or b) you may change your mind and not want the item after all. Before you purchase something, ask yourself, ‘Is this a need or a want? Will this change my life for the better or my bank account for the worse?’ Limit eating out. Invite friends over for dinner instead and have a potluck. If you do eat out, take your leftovers home for another meal.
8. Know what your bank balance is: Balance your bank account. Know that some charges on your debit card won’t hit your account right away, so you will need to make sure the money is there when the charges do hit. If you have a hard time balancing your bank account, use your bank resources. The folks at your bank will help you balance your account. They are there to serve you. If your bank seems to be too big to give you individual attention, find another back. Credit unions are good financial institutions to deal with. I have banked with a credit union for several years and have been pleased with the service I have gotten.
9. Save a little at a time: I have a change jar at home that I put my spare change in. That jar has saved me many times! My 401K contribution is taken out of my paycheck before it is directly deposited in my checking account. If you want to start saving money, put aside something small, like $5 or $10 a paycheck. If possible, have that amount deducted from your paycheck and put directly into your savings account. Increase it when you feel you can afford to. Don’t worry about the amount you save, just start saving. Be intentional about developing a savings habit.
10. Celebrate your financial victories: I hate leaving lists of things greater than 5 on an odd number, so I will finish this list with celebrating your victories. Don’t celebrate by spending money, but by doing something that makes you feel good about yourself – take a walk in the park, post signs where you can see them that say, “You did it! You __________ (fill in the blank with your accomplishment)!”, share your victory with a close friend, make yourself a ‘Congratulations!’ card and mail it to yourself. Get creative!
Be diligent about your finances. If you’re not a math person like me, you can learn to be a math person! One does not have to have a PhD in finance in order to balance one’s checkbook and save money! If you have a friend who is really good with their finances, ask them for their help. What do they do that you can learn from? Above all, stay positive! You will experience failure, but that’s okay. You are learning and growing and that’s the most important thing. Stay tuned . . .