After divorce or death of a spouse, you may find yourself in financial turmoil. If your lifestyle requires two salaries in order to survive and you suddenly find yourself alone, trying to handle the budget that was once shared… THIS is financial STRESS!
And as if you weren’t feeling badly enough about your new status in life, you worry that you won’t have the strength to deal with added money problems. What can you DO?
Analyse Your Sitation
Most people use on-line banking now. If you haven’t done so yet, ask someone at your bank to help you get started with it. Being able to see at a glance everything that comes and goes out of your bank account is SO important! You bank’s online system may also have a way of tracking expenses and income.
Start by taking a good look at your budget: look at the past 3 months first, then 6 months, then 1 year. If you are familiar with a software program such as Excel, you could put all this information into a spreadsheet. You can download free templates from Microsoft.com for all kinds of budgets.
If You Were Not the Bill Payer In The Family
What to Do if You Don’t Have a Clue:
If you don’t have a budget and have been just paying things as they come along, start by making a LIST of all your expenses. On separate pages, make groups for (1) Monthly expenses, (2) things that are Regularly Paid less often (e.g., yearly insurance, gym membership, club fees), (3) Frequent Cash Expenses (food, pet supplies, car fuel, daycare, bus pass/tickets; and (4) occasional or itermittent expenses (e.g., clothing purchases, car maintenance, haircuts, birthdays)
Keep It Simple
Do NOT over-complicate this. In each group, itemize particular items that fit into each group. Opposite the item, write an amount (round up to nearest dollar). You can use approxmiate amounts but go higher rather than lower. Next, total the lists, and calculate a GRAND TOTAL.
Now you will have a clear idea of what it costs to continue living in the manner you are used to — in your current home, with expenses all being the same.
The Money Envelope method is taught by Dave Ramsey, renowned Financial Advisor. He has helped thousands of people recover from bankruptcy and financial ruin, helping them find freedom from debt!
An easy way to manage money is to work strictly with CASH. Make envelopes for the main categories in your budget. Here are a few categories to get you started:
- Groceries and pet supplies
- Car Fuel (gas)
- Phone, Internet, TV
- Cell phone
- Daycare, babysitters
When you get paid, put cash in the envelopes according to the amounts you have already estimated you will need. For example, when you know the total you normally spend on groceries, put that amount of cash into the grocery envelope. Do not touch that money for anything that is not food. Do the same for each envelope.
In the beginning, there may not be money for “FUN”. The fun will be in getting and keeping yourself on track. But you can always include some treats in the grocery fund amount.
FOR MORE IDEAS AND TIPS ON FINANCIAL FREEDOM, READ YOU, Inc.