It's common knowledge that financial stress during the marriage is one of the major causes for divorce. It also is one of the major causes of stress in single people, whether they're married or divorced. However, taking control of your personal finances (no matter how old you are or regardless of your marital state), is not as complicated as many people believe.
7 steps to take control of your personal finances:
- Make a realistic budget and stick with it. Budgeting seems daunting. But it’s not as difficult as it first may seem. To create a budget, start by looking at your spending for the previous three months and figure out what your average spending is on groceries, dining out, health, entertainment, bills, etc. and then adjust your spending habits accordingly. After that, always spend less than what you make. A budget will help you keep track of your spending and help you make adjustments;
- Build an emergency savings fund. Ideally, an emergency saving fund contains at least three to six months' worth of your current expenses (which you do not touch unless you have an actual emergency like losing your job, or the car breaking down). Contribute what you can to your emergency fund – even $50.00 to $100.00 per month will add up over time, so no matter how small, you at least start now. Ideally, you should aim to have at least three to months' salary in your emergency fund, even having $1,000.00 as back up is better than nothing at all. If you're struggling and can only afford a little each week, setting aside even $10.00 a week is better than nothing;
- Pay yourself – start a retirement account. If your employer offers a 401K and will match your contributions to it, set your contributions high enough to get the maximum amount that your employer will match as soon as you can do so. Don't leave that free money on the table. If your employer doesn’t offer a 401K, you still have options. Many financial companies will permit you to open a 401K or you can also open a Roth IRA;
- Get out of debt. If you're struggling with a heavy debt load from credit cards or student loans, then make it a priority to unload some of this burden. If you have the mental discipline, you'll save money by paying down your high-interest debt first. You also can consolidate your credit card debt by paying it off with a zero percent credit card transfer. Some credit card companies periodically offer zero percent balance transfers. The transfer balance generally must be paid off within a year or 18 months. Transfer as much money as you can safely and pay it off within that time, and you will be saving yourself a lot of interest;
- Insurances. Finally, you must think about your family once you're gone. If you have anyone dependent on your income, make sure that you have adequate insurance coverage. You will find that term life insurance coverage is usually the least expensive and most efficient way to insure your family. Also, don't neglect disability insurance. Disability insurance is one way you can protect your income because it helps cover expenses if you're unable to work due to a disability;
- Leave room to treat yourself. Always try to leave some money to do things that make you happy. It's important to save for retirement and take the steps necessary to set yourself up for financial success and stability. It's also important to have a life that's enjoyable while you're providing for your financial future. Always set aside some money for an entertainment budget. Make room for a monthly date night. Let yourself splurge once in a while for a fantasy dinner, but just don't let "treating yourself" get out of hand; and
- Monitor your credit. Regardless of where you may be on your journey for financial stability, commitment and dedication to continued financial education is key. Having a good credit score can also be instrumental when it comes to controlling your finances. Should you need financing for an emergency; a good credit rating will qualify you for the lowest interest rate. You can pull your credit report free each year at www.annualcreditreport.com or you can sign up with Credit Karma where you can access your full credit report any time and even receive notifications of any change to your credit, negative or positive. Don't be afraid to dispute credit report errors and/or establish good payment history with a new line of starter credit like a secured credit card. By doing so, you can build your credit rating.
There are few hard – and fast - rules in the world of personal finance. I have suggested methods that have worked for me (and for others), but only you can determine if these methods are appropriate for your own circumstances. But you should not spend so much time looking for the "best choice" that you never actually do anything about your personal finances. Just start somewhere.
Board Certified Marital and Family Law Attorney Charles D. Jamiesonunderstands that divorce is an extremely sensitive and important issue. Thanks to extensive experience and a focus on open communication, Attorney Jamieson adeptly addresses the complex issues surrounding divorce while delivering excellent personal service. To discuss your pending or anticipated divorce, then please contact The Law Firm of Charles D. Jamieson, P.A. online or call 561-478-0312 to schedule a consultation.