Starting a new life after divorce is challenging! One of the most daunting hurdles is learning how to manage the money on your own. You may come out of your relationship having never managed your family’s finances, for one reason or another. Rather than waste time fretting about your new responsibilities, you need to take control of your life and set yourself up for the future! Our own Gail Vaz-Oxlade, best-selling financial author and no-nonsense money expert, suggests this five-point plan to manage your money and recapture your financial independence.
Before you can reach the finish line, you need to determine exactly where you’re starting from. Begin by analyzing your spending habits and determining your monthly expenses. Separate your wants and your needs, eliminating frivolous costs and establishing a baseline that you need to thrive. Don’t forget to face up to your debts. Just because you don’t acknowledge it, doesn’t mean it won’t exist. If you can, consolidate your debt under a lower interest rate.
Rome wasn’t built in a day. While it is critical to lay the foundation for a healthy lifestyle, you will have trouble creating a winning strategy if you are not thinking ahead. Envision your ideal financial situation and decide how quickly you want to get there. Next, create a detailed budget that will help guide and manage your path. Track your monthly revenues and expenses to determine how much you can realistically save each month. Match your budget parameters to your financial timeline.
Remember, when you separate you are moving from two incomes down to one. While your lifestyle may have suited your previous means, you will need to make some changes fit into your current situation. You will want to hold off on any large purchases until you have become settled in your current lifestyle. Manage money wisely and avoid living paycheque to paycheque.
Start saving immediately. Money put away today will continue to compound over the years. The more you can save at the start, the quicker you will find yourself in that ideal situation. If you have children, their university education funds will thank you. Don’t forget to build an emergency fund, as appliances break down, accidents happen, and relationships can end. If you plan like a pessimist, you will have a nest egg that can carry you through the toughest of situations.
Everyone is allowed to splurge on the occasion. Just make sure that one-time treat doesn’t evolve into your daily menu. You have created a plan, changed your habits, and set yourself up for the future. The hard work is done! Continue down the path you’ve started on and watch your finances grow.
For more than 20 years you have witnessed Gail Vaz-Oxlade’s trademark straight-up money wisdom, both on Radio and Television, most notably as host of TVs Till Debt Do Us Part, Princess and Money Moron. Gail is a multiple time, best-selling financial author, and one of the top Canadian authors of the past decade. Gail brings her common sense wisdom to answer your questions about XXXXXX and divorce in Ontario.