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Debt Busting Strategies for the Newly Divorce
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By: XSTILLA.COM
Having a budget in place is extremely important when trying to financially recover from a divorce. More than likely, one or both of you will need to seriously modify your spending and re-evaluate your budgets in order to make ends meet. The time to act is now, rather than after your credit has been ruined and you've found yourself even deeper in debt.
Here are some debt busting strategies for the newly divorced, that if followed, can help you to keep close control over your finances rather than allowing them to control you.
1. Make a list of all income and expenses
Make a list of all sources of income, adding or subtracting alimony or child support payments if needed. Also make a list of all expenses, remembering to include housing, utility, and transportation costs as well as any credit cards, insurance expenses, or other monthly bills.
2. Examine wants versus needs
There is a distinct difference between wanting something and needing it. We need certain things to survive, while others are pure luxury and could easily be eliminated until we're better able to afford them. Is it possible to downsize any of your expenses, maybe get a smaller vehicle, or eliminate things such as cell phones or cable television?
3. Create a budget
A concrete budget gives you the necessary guidelines to ensure that your financial obligations are being met before any extraneous spending takes place. Using your lists from step one, put together a simple budget, or consult a professional debt counselor to see exactly what you need to be doing each and every month with your money in order to stay in the black.
4. Contact your creditors
Most creditors will be happy to work with you to find a way to pay off your debts, and in many cases, keep most of your accounts in good standing. Rather than telling them what you aren't able to pay, honestly tell them what you are reasonably able to afford each month.
5. Earn extra money
Tap into your creative side to find ways of making more money. Hold a yard sale, do income taxes, provide child care, or perhaps you have artistic abilities or computer skills that could be useful for earning extra income. Also consider taking a part-time job if possible until all of your debts are paid off, or are at least at a more manageable level.
6. Avoid new debts
Although it's tempting to use credit to obtain things you wouldn't be able to afford right now, the interest charges and fees are never worth the luxury. In some cases, the emotional toll of divorce and the end of a marriage may cause a person to fall into the habit of overspending and ultimately causing more damage. Existing creditors will also be far more likely to work with you to settle your current obligations if you show that you aren't incurring new debts in the meantime.
7. Have patience
While overcoming debt isn't something that happens overnight, it will inevitably come with time, patience, and by following a set budget. Reward yourself on a small scale to remind yourself of the better changes to come.
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