Managing your finances is never simple, but a divorce can make it far more complex. In addition to the emotional turmoil a divorce can cause in a person’s life, it can also cause a lot of financial upheaval. By establishing a plan and relying on professional help where necessary, you can ensure your best possible financial outcome and avoid damage to your credit score during this tumultuous time.
If you are facing a divorce in your future, these 20 tips will help you to maintain some sanity when it comes to navigating the financial aspects of divorce.
1. Consider both parties.
This can seem impossible in the midst of the emotions of a divorce when tempers are high. Still, it’s important to remember that making the best financial decisions for both parties will benefit you in the long run.
2. Don’t heed unsolicited advice.
Whether it’s your best friend or a co-worker, there will be no shortage of unsolicited advice from people you know during a divorce. They’ll be all too happy to share a story of a nightmare divorce, or an amicable one and tell you what you should — or shouldn’t — do in your own situation. It’s best to heed only the advice of those you trust. Always remember that advice is just that, and ultimately the decisions you make are up to you.
3. Don’t tell everyone your business.
When emotions are high we often wear them on our sleeves. In these times, we may find ourselves blabbing about our divorce to everyone, including the grocery store clerk. But because there is so much personal information — financial and otherwise — tied up in the divorce process, it’s best to keep the details of your situation private and confidential.
4. Leave advice to the professionals.
It’s important to only take legal and financial advice from a lawyer and a trusted financial professional. They will be able to objectively help you through your particular situation with the most effective and beneficial advice and strategies.
5. Focus on finances.
A lawyer can help you through the legalities of things like separation agreements and child visitation, but when it comes to finances and managing joint debts, it’s best to work with someone who specializes in finances. If you don’t know where to start, ask your divorce lawyer or mediator to recommend a financial planner they trust or have worked with in the past.
6. Close joint credit accounts.
Once you have filed for divorce, it’s important to cease accruing debt in both of your names. By continuing to rack up joint debt you could end up doing more damage to your credit scores and credit reports and subsequently complicating the divorce process.
7. Open separate checking accounts.
It’s important to remove your spouse’s name not only from your joint credit accounts, but from checking and savings accounts as well. Once you’ve filed for divorce, joint bank accounts should be closed and new, individual accounts should be opened.
8. Keep track of income and expenses.
This is always a smart idea, but particularly during the stress and chaos of a divorce, it can be helpful to track and document financial details including child support and alimony payments, and shared medical and other expenses. There are many personal finance apps available that can help you keep track of these details.
9. Create a budget.
Going from a two-income household to a single income is a major transition. If you haven’t adhered to a budget in the past, a divorce is a compelling reason to start doing so immediately. Make sure to outline everything, including both daily and monthly expenses (groceries, utilities, mortgage and car payments, scheduled maintenance on appliances and vehicles), and long-term expenses including retirement and tuition funds. This will help you avoid overspending as you adjust to your new financial norm.
10. Update your records.
Once your divorce is final you will need to change your marital status on things including tax records, utility bills, health insurance, and property titles (homes and cars, etc.).
11. Secure your own health insurance coverage.
For many couples one spouse is the main policyholder on the health insurance coverage for the entire family. When you get divorced, there will be a grace period for one or both of you to find new coverage on separate policies. Make sure to talk to your employer to find out when the next open enrollment period is coming. If you do not have employer-sponsored health insurance available, you’ll need to research individual health insurance options.
12. Consider adding more health insurance coverage options.
Relative to the previous item, it’s important to carefully consider the potential coverage you will need on your health insurance policies. You may need to add things you didn’t have previously, such as counseling coverage for yourself or your children if they will need it during this difficult and transitional time.
13. Decide whether or not you will change your name.
If you legally assumed your spouse’s last name when you were married you will need to decide whether you’re going to keep it for legal purposes. No matter what you decide, it’s important to make sure your legal name matches the name on any credit and loan accounts. Otherwise you could end up with errors or multiple names or accounts on your credit report that you’ll have to dispute later. This can cause damage to your credit and ultimately even lower your credit score.
14. Begin establishing your own credit.
Once you’re divorced you may find that your credit score has taken a hit thanks to removing your name from accounts and losing some of your established credit history. While it’s not advisable to run up a bunch of new debt, you can benefit by establishing new credit and opening a new bank account and credit card in your own name.
15. Update wills, medical directives, and powers of attorney.
It’s not uncommon for a spouse to serve the role of power of attorney, medical power of attorney and beneficiary to a will. If you have designated your spouse as any of these things, it’s important to update all of these to reflect the new person or people you’d like to appoint to fulfill these roles.
16. Change beneficiaries on retirement accounts and life insurance policies.
Similar to the the previous tip, make sure that your life insurance policy, 401(k), IRA and other retirement accounts are updated to reflect the change in your marital status.
17. Ensure your children are covered.
If you have minor children that should benefit from your retirement accounts or life insurance policies, make sure any changes you put in place account for that. For example, if you have a $200,000 life insurance policy that you would like your now 6-year-old child to receive at age 25, make sure the person you appoint will fulfill your wishes pertaining to the amounts you designate and when. It’s a good idea to get these details in writing and notarized as well.
18. Get savvy in managing your finances.
In many marriages, one spouse acts as the financial manager. That means they handle things like paying the bills, setting the budget, balancing the checkbook, filing annual tax returns, etc. If you are not the spouse that handled these things then you may have little or no knowledge of how to manage these things day to day. It can be helpful to establish a relationship with a certified financial planner, a banker, and a professional tax preparer. It can also be helpful to sign up for an online course on basic financial management.
19. Establish a savings account.
It may seem counter intuitive to try to save money at a time when your financial situation may have significantly changed. However, when it comes to saving money, even small amounts add up. And you never know when an unexpected expense may arise and you’ll need a little extra.
20. Take it one day at a time.
Divorce is never something we plan for, and it can feel completely overwhelming when tending to all of the decisions and details that need to be worked out. But by slowing down and taking things one step and one day at a time, you will find that both you and your finances will adjust to this life change. And you may just make the transition a lot more seamlessly than you think you will.
Samantha A. Gregory is an author, consultant, and speaker. She’s a single-mom lifestyle, money, and parenting expert featured in The Washington Post, The New York Times, Essence Magazine, HuffPost, ABC News, and Mint.com.
Samantha founded the award-winning RichSingleMomma.com™, the first online magazine featuring personal finance, parenting, and personal development content and courses for single moms.
She aims to inspire women who are ready to thrive and not just survive in their single motherhood journey. Connect with her on Instagram @richsinglemomma.
Financial stress and anxiety affect millions of people. No matter how much, or how little, money you make, you have probably felt financial stress at some point in your life. It doesn’t matter how well you think you’ve planned (or haven’t), things can happen that cause you stress or anxiety.
Chances are you’ve had to deal with one of these situations:
Your income dropped and now you can’t pay your bills.
There was an unexpected expense that drained your savings.
The debts keep building up and you can’t pay them down.
You have had a medical issue and insurance did not cover it.
If you’ve dealt with one or all of these scenarios, you’re not alone. Thousands of Americans are in the same situation. They move from one stressful financial situation to another — or juggle many of them at the same time.
The reasons for financial stress differ for all of us, but the way to overcome it is the same.
1. Talk About It
The No. 1 mistake people make when they stress about anything is to avoid it. There is this belief that if you don’t talk about or address it, then it is not true. If you do this, though, the situation will get worse.
You need to look directly at the financial situation causing you stress. It can help to write it down, along with ideas that might make it better. If you are in a relationship, talk to your spouse or partner about it.
Whatever you do, don’t ignore it. It won’t go away on its own.
2. Review Your Budget
If you have a budget, refer to it to see what can be changed. Is there a spending category you can eliminate? Maybe you can reduce your spending until you address your financial situation.
If you do not have a budget, start there. Even if you are broke, you still need a budget. Your budget is a financial roadmap. It guides you to make the right spending choices and to see where your money goes.
Reviewing your budget helps identify what works and what doesn’t. You should check your budget at least once a month so you always know where you are going, and where you’ve been.
3. Make More Money
Your stress may mean it is time to change careers or jobs, or that you need to find ways to bring in more money. There are many ways you can work from home and make more money. You just have to find the right niche.
4. Comparison Shop
If you need to make a major purchase, don’t run down the street to the closest store to make your purchase. Research the item you want. Read reviews and check prices.
Once you know which item you want, visit your store to buy it. You might be able to price match to get the best deal or even negotiate the price, especially if you use cash.
5. Get Rid of Your Debt
Debt is one of the main reasons people have financial stress. Whether your debt is the result of overspending or life tossing obstacles your way it can be easy to get in over your head.
Taking steps to get out of debt can improve your financial stress. It will not be easy. I know this because I’ve been in your shoes. However, if you can put together a plan and begin making progress toward your goals, you will find your financial stress is reduced, or possibly eliminated. (Remember, keeping your debt under control can also improve your credit standing, which can save you thousands over your lifetime Find out where your credit stands by getting your two free credit scores on Credit.com.)
6. Seek Professional Help
If your financial situation is really bad, it may be time to seek professional help. You may want to consult a financial planner if you stress over saving for college or retirement.
Asking for help does not make you weak. It shows you are smart. If you needed surgery, you would not perform it on yourself. You would find a surgeon. The same is true with your finances.
7. Set Goals
Decide what you want from your finances. Make a vision board, or post an image of your goal where you will see it every day. When you can visualize your goals, and see them in front of you, they become real. They are no longer a thought in the back of your mind. Seeing your goals in front of you can keep you focused.
For example, when I was working on paying off my debt, I had a paper on the refrigerator with a total amount owed on it. As we made payments, I updated it. It was in front of my face every day. I could see how much we owed, but more than that, I was able to see our progress as I watched the balance drop.
No matter what causes you financial stress and anxiety, there are things you can do to overcome it. You need to first take ownership and then take the necessary steps forward.
Samantha A. Gregory is an author, consultant, and speaker. She’s a single-mom lifestyle, money, and parenting expert featured in The Washington Post, The New York Times, Essence Magazine, HuffPost, ABC News, and Mint.com.
Samantha founded the award-winning RichSingleMomma.com™, the first online magazine featuring personal finance, parenting, and personal development content and courses for single moms.
She aims to inspire women who are ready to thrive and not just survive in their single motherhood journey. Connect with her on Instagram @richsinglemomma.
As nearly half of the American population already knows, divorce is a difficult, emotional process to go through. This difficulty can be compounded depending on the number of years a couple has been together, the dollar amount of their acquired assets, and whether or not they have any children.
Divorce can also have an impact on your credit, though the proceedings themselves are not the reason for this. In other words, couples shouldn’t expect their credit scores to plummet the second they file for divorce. However, there are things that occur during divorce that can have a negative impact on credit. Here are 10 ways in which a divorce could affect your credit score:
Having to refinance your home
In order to move a property into one person’s name, it may be necessary to refinance your mortgage. As with any refinance situation, this will require a hard credit inquiry, and may also potentially add a great deal of new debt for one person.
The splitting of the debt was uneven
When assets are divided, one person may get to take more of the income, property, or assets, but also more of the debt. It all just depends on how the debt is divided.
Going from two incomes to one
If possible, it’s helpful to examine finances before a divorce and determine new budgets for both parties, so as to avoid falling behind on any bills or payments. Many divorced individuals report that losing another person’s income made the single greatest impact on them financially. Setting up a new budget early on can help avoid this issue.
Not disclosing all debt during the proceedings
At some point during the divorce process, both parties are required to disclose their financial accounts. However, as former spouses sometimes learn, not everyone is truthful about these assets. Running a credit report is the best way to ensure you’re aware of every account bearing your name.
One party doesn’t pay his or her agreed-upon share
Most courts are willing to work with couples to help them discuss and agree on a payment plan for shared assets, such as a home or any jointly-owned property.
One party still has access to the other party’s accounts
In the event that divorcing spouses do not split their joint accounts, both parties will still be responsible for any additional charges. It’s best to split any joint accounts as soon as possible.
Credit limits are decreased
Many creditors regularly check up on their clients to see if there has been a salary change, and most credit card agreements state that limits can be decreased at the creditor’s discretion. If one spouse was making more money than the other, and the accounts are separated, a credit card company can choose to lower the limits for one or both spouses. This can, in turn, affect credit scores, as well as catapult credit card holders to their maximum limits very quickly.
The divorce turns ugly
While no one enjoys going through divorce, the best solution is to try and remain civil to one another, lowering the risk of spouses doing financial harm to one another out of spite.
There is confusion over the divorce decree
People can often be confused about their financial responsibility as stated in the divorce decree. If you are unsure of where you stand or what you must pay, consult your attorney, family court facilitator, or mediator.
Spouses don’t work together
Sometimes, electric bills can be overlooked or go unpaid. Keeping the divorce process as amicable as possible helps parties communicate with one another over their shared financial responsibility after the households have been completely separated. Working together ensures everyone’s credit remains in good standing.
Samantha A. Gregory is an author, consultant, and speaker. She’s a single-mom lifestyle, money, and parenting expert featured in The Washington Post, The New York Times, Essence Magazine, HuffPost, ABC News, and Mint.com.
Samantha founded the award-winning RichSingleMomma.com™, the first online magazine featuring personal finance, parenting, and personal development content and courses for single moms.
She aims to inspire women who are ready to thrive and not just survive in their single motherhood journey. Connect with her on Instagram @richsinglemomma.
The Holiday season has official begun and the shopping season is right around the corner. My family and I are already planning our meals, decorations, gifts, and travel. This, of course, costs money so I have to make a holiday spending plan and decide how much I want to budget.
Years ago it freaked me out to think about all the money that was flying out of my bank account. These days I feel calmer because I know that giving (spending) only means I’ll be receiving that much more in return. That is a mindset shift I hope to share more with you in the coming year. But back to the holiday spending plan.
The first thing to do is decide how much you want or have saved to spend for the holidays. If you were smart you opened a holiday savings account at the beginning of the year. I honestly didn’t do that but I will next year.
You can follow my lead if you didn’t do it but opening a free savings account with Ally bank or Capital One. Both are online and you can move you money in and out quite easily. You can also set up automatic drafts so the money comes out of your paycheck and it’s out of your mind so you don’t miss it. What a surprise it will be when you check the account in November and see all that money sitting there.
Now that you know how much you want to spend you can list all the categories you will be using the money for. Will you be cooking meals, decorating your home, buying gifts for anyone other than the kids, or traveling? List all the activities and then move on to the next step, dividing the money.
How much you choose to spend for each category is completely up to you. You might decide to do an even split across the categories. You may decide to use 50% of the money for the gifts then split the rest across the other categories. You have options.
For food you could use coupons and shop the sales to keep costs low. You may only have to buy a few ingredients because you are going to eat with family and only need to bring one dish. There will be sales all during the month of November and December so head over to your top three favorite stores’ website and look at the flyers and/or download their app.
For decoration you can use what you had last year and simply add a few items that rounds out the look you are going for. Making decorations with the kids is a fun activity. You can make snowflakes, ornaments, and garland with material you have on hand. You can also make decorated gifts to give to teachers, grandparents, and friends. The kids would absolutely love and feel they are a big part of the gift giving process. It doesn’t have to cost much but the value of a handmade gift is priceless!
If you are planning to travel be sure to check out travel deals on Groupon Travel, Expedia, or your favorite airline website. If you are traveling by car map out your trip using AAA’s travel planner or simply download the Waze app from the App Store or Play Store to get you to your destination. With the Waze app you can add stops and look for gas stations and food options along the way. It is my favorite GPS app. You should look me up and friend me on it.
Now that you have a budget, have set your categories, and know how to look for savings you can finalize your holiday spending plan. It does not have to be a long process but it does require you to be decisive so you remain in control of your purse strings. You can face the Holiday with confidence know you will not be in debt repayment mode for the new year.
If you need additional help creating a budget you can use the budget calculator below. Just enter your numbers and click the calculate button at the end.
I wish you a very happy holiday season and many blessings in the new year!
Samantha A. Gregory is an author, consultant, and speaker. She’s a single-mom lifestyle, money, and parenting expert featured in The Washington Post, The New York Times, Essence Magazine, HuffPost, ABC News, and Mint.com.
Samantha founded the award-winning RichSingleMomma.com™, the first online magazine featuring personal finance, parenting, and personal development content and courses for single moms.
She aims to inspire women who are ready to thrive and not just survive in their single motherhood journey. Connect with her on Instagram @richsinglemomma.
When college student Kara Skinner was short on cash, she started the blog Lover’s Quarrel, reviewing romance novels and including affiliate links in her posts. Thanks to her posts, she earned $60 from those links. But instead of splurging on pizza and a night out with friends, Kara decided to use her money in a different way: she donated it.
“I read I Am Malala and was so inspired,” Kara says. “Not everyone can get an education like I can because of where they live or their gender.”
Since launching her blog, Kara has donated to organizations like the Malala Fund and the Arbor Day Foundation. Because she uses her earnings from her website, she never has to dip into her bank account to contribute to charities.
Kara isn’t alone in her outlook: millennials are extremely generous when it comes to nonprofit causes. In fact, the majority of this age group donate to charity—an especially notable feat when you consider that debt is the biggest money-related stressor millennials face.
7 Ways to Donate to Charity
While that charitable mindset is admirable, finding the extra money to donate can be difficult. Between bills and debt payments, there’s often very little left over to give away.
However, a lack of money doesn’t have to hold you back from helping your community. You can make a big difference by doing one or more of the following things, without hurting your monthly budget.
1. Sign Up for AmazonSmile
If you shop on Amazon, you can help nonprofit organizations just by making routine purchases. Once a charity signs up with AmazonSmile, Amazon customers can select that organization to receive donations.
To take part in the program, visit Smile.Amazon.com instead of Amazon.com, and do all of your shopping from the new link. After you check out, the AmazonSmile Foundation will donate 0.5% of the purchase price of eligible products to the charity you choose.
That number might not sound like much, but it can add up over time. If you spent $1,000 on the site on regular purchases like toilet paper, laundry detergent, and other essentials, AmazonSmile would donate $5 to your selected charity.
2. Sign Up for Rebate and Reward Apps
If you’re short on cash, you can earn extra money to donate just by signing up for rebate and reward apps. Sign up for apps such as Ibotta and Checkout 51 and turn your receipts into cash.
These apps offer rebates for shopping at select stores or purchasing specific brands. After you’re done shopping, take a photo of your receipt with the app of your choice. Money will be deposited into your account.
Those rebates could add up to a hefty amount of cash. In fact, some people rack up hundreds with rebate and reward apps. With that money, you can make a sizeable donation without digging into your savings.
3. Donate Blood, Plasma, or Bone Marrow
If you’re a healthy adult, you can make a lifesaving donation. Those with severe illnesses or who have been in accidents often need blood, plasma, or bone marrow donations to recover. However, thousands of people cannot find a match, and there are sometimes donor shortages.
Donating your blood, plasma, or bone marrow can be a lifesaving act of charity in itself. In many cases, centers will pay you to donate plasma, allowing you to help someone in need while you earn extra cash to donate. When it comes to bone marrow, however, you’re not likely to be paid for donating—but you can still help save someone’s life.
Do you get compliments on your long, beautiful hair? You can use those lovely locks to help someone else going through a rough situation.
Children and adults with alopecia or those undergoing chemotherapy can experience hair loss. They often turn to wigs to cover their scalps and feel more confident. Human-hair wigs are the best you can buy; they look the most natural and can be washed and styled like regular hair.
However, human-hair wigs can cost thousands, and they are often unaffordable for many families. Several organizations try to ease the burden by collecting human hair to make wigs for both adults and children.
Your hair must be securely fastened in a ponytail.
If your hair is in a ponytail, the tail must be at least 8 to 12 inches long to be useable.
Your hair cannot be bleached or highlighted. In most cases, dyed hair that does not have any bleached sections is acceptable.
5. Donate Gently Used Clothing or Household Items
If you have old clothes, furniture, or household items lying around, you might be able to help someone in need.
You can donate items to organizations such as Goodwill, which can sell those items in thrift stores and use the proceeds to fund other programs—such as employment training and job placement services—for people in your community.
If you’re like Kara and don’t have much money to donate with your current budget, you can start a side hustle to make extra cash. Side hustles allow you to work as much as you want, when you want. If you want to make a donation around the holidays, you can take on seasonal work to get the money.
Because it’s extra income, you won’t miss it after you give it away. And you won’t fall behind on your rent or student loan payments, either.
7. Collect Spare Change
Even your piggy bank can be turned into a source of donations. At the end of each day, empty your pockets and bag and deposit any loose change into a jar.
You can also boost your donations by looking for forgotten change on sidewalks or streets. One blogger collected $27 just by looking around at car washes, in gutters, and in parking lots.
Once your change jar is full, take it to the bank to turn it into cash before donating it to a charity of your choice.
Donating to Charity
When you’re broke, it’s hard to scrounge up the money to help others. But if you’re determined to help your community, thinking creatively can help you make a tangible difference. Try accounting for donations in your monthly budget to make it a regular part of your spending habits or try looking for credit cards that make it easy to give to charity. By taking on extra work or sacrificing your time, you can help change someone’s life.
Samantha A. Gregory is an author, consultant, and speaker. She’s a single-mom lifestyle, money, and parenting expert featured in The Washington Post, The New York Times, Essence Magazine, HuffPost, ABC News, and Mint.com.
Samantha founded the award-winning RichSingleMomma.com™, the first online magazine featuring personal finance, parenting, and personal development content and courses for single moms.
She aims to inspire women who are ready to thrive and not just survive in their single motherhood journey. Connect with her on Instagram @richsinglemomma.
I had the pleasure of interviewing Emma Johnson, the author is The Kick-Ass Single Mom and founder of WealthySingleMommy.com. We talked about parenting, child support, and the importance of quality vs. quantity time with your kids.
Emma shared why she wrote the book and encourages single moms to practice radical self-care and to find their inner queen. When you own your power you can do anything you want.
This conversation is 30 minutes long so grab your coffee or tea and relax while watching or listening to us pour a bit of our power all over you!
You can buy the book at your local bookstore or in Amazon.com.
Samantha A. Gregory is an author, consultant, and speaker. She’s a single-mom lifestyle, money, and parenting expert featured in The Washington Post, The New York Times, Essence Magazine, HuffPost, ABC News, and Mint.com.
Samantha founded the award-winning RichSingleMomma.com™, the first online magazine featuring personal finance, parenting, and personal development content and courses for single moms.
She aims to inspire women who are ready to thrive and not just survive in their single motherhood journey. Connect with her on Instagram @richsinglemomma.
Hi! Welcome to RichSingleMomma.com. I started this website almost a decade ago because I couldn't find any blogs back then that helped single moms with money. I was having some success in that area so I decided to share what I knew about side hustles, making extra money, and managing money. Read more...
