I am recently divorced after ten years of marriage. We luckily do not have children, and though the split was amicable, I am realizing that being single is a lot scarier than I thought it would be. We got married so young (at 22) that I never had to live on my own or learn how to maintain a budget. My now ex-husband handled all of the finances in the house, like paying the rent and the bills, and I feel like I’m in over my head. After I moved out, I was lucky enough to get a job, but now I don’t know how to plan out my finances. I feel ridiculous because I’m 32 and never learned how to take care of myself financially. Where do I begin?
-Single and Scared in Reno
DEAR SINGLE AND SCARED,
First, I’m sorry to hear about your divorce. This is a time of change and transition and I can only imagine how scary it must be. It’s a good thing that you’ve decided to educate yourself on finances , as many people wait until they’re in trouble before they ask for help.
The first step is to pull together all of your financial information. When you divorced, did you leave the marriage with any consumer debt or outstanding loans? It’s important to know what you owe to whom and to understand the terms of all debts and loans. Close all revolving debt (credit cards, store cards, bank lines of credit, etc.) for any joint accounts with your ex-husband.
Next, figure out the expenses you already have. Tally up your rent and car payments, if any, as well as cable/internet/phone bills. This will help you figure out how much you need to set aside each month for living expenses.
The next step is to create a budget. This Community Spending Guidelines infographic will help you figure out how you should be allocating the funds from your job, as well as any alimony you may be receiving. Look at where you are spending your money. Look at ways to lower expenses (stop eating in restaurants, bring lunches to work, etc. ) and save as much as you can.
Don’t get sucked in by credit card offers. They may seem tantalizing at first, but you don’t want to destroy your credit by opening a bunch of cards and racking up debt. Think carefully before you use plastic for anything. I’m not sure if you have a long credit history, or if your husband used his name for all loans and credit lines, but now is a good time to start building good credit by keeping a low credit utilization ratio, paying all of your bills on time, and not opening a lot of new lines of credit in a short period of time.
I’d recommend taking a look at ACCC’s Financial Education Resources. You can learn the ins and outs of credit, budgeting, and spending through these resources.
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