Money and Change

Hands down, the biggest change that The Boy and I will be experiencing centers around money.  I have been so lucky to live and work where I do, because teachers here make a decent wage.  Without the third person in the house, and with an increasing salary, I was able to crawl out of the debt that was largely due to the ex’s money mismanagement, and then provide a life for my son, virtually free from want.

In about a month, I will be unemployed.  I will get paid through the summer, and God willing, I will be employed again by the time those paychecks stop coming.  But I know I will not be making anywhere near what I have been making.

1874 USA 3 dollars coin.

Now, before you start freaking out on my behalf (because I really have put a lot of thought into this move, contrary to what most people think), we will not have a mortgage or rent payment.  And if you give that fact it’s due consideration, you will understand why this move is not nearly so scary as it might have seemed.  For most people, the house payment is the biggest chunk of their pay, usually 25-33% of their monthly income.  In addition, insurance is substantially lower (at least half of what we pay here), and we will have no water bill (well water).  The Man is very handy, and the labor portion of any home repair bills (and even some minor car repair bills) will be nonexistent, as well.

We have considered selling my rather new car in exchange for an older, yet reliable car, eliminating the one car payment between us (not sure we’ll do this, but it is on the table — we both feel if you aren’t making payments, you’re paying repair bills).  We also intend to plant a garden, if not fully-fledged this year, then at least by next, to supplement our groceries (we have really good soil – used to be a potato farm!).

Where I do anticipate some difficulties adjusting to a blended checking account will be in the food department.  The Man loves the convenience store, and often eats out, sometimes for lunch and dinner.  The Boy and I eat out about once a week, with all other meals coming from our weekly groceries.  Of course, we may also have a discussion or two about where to keep the thermostat, too…

I just found this lovely series from The Peaceful Mom, on how to live on under $28K a year.  You should check it out – lots of great tips on how to live more frugally (without couponing).  I’m hoping we can use some of these in the near future (I’m thinking a clothesline would be nice!).

What money-saving tips have you used?

After the Divorce: Money

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I don’t know about you, but it wasn’t just my emotional life that was in a shambles after my divorce.  I think my finances were in even worse shape.  In my own case, this was because I had done the hands-down, stupidest thing a woman can ever do with her money — gave control of it to someone else.  If there was one thing, ONE THING, I could go back and change, it would be that.  That’s not to say that I didn’t see the light before the end.  For years, I tried to get the ex to even let me share in the bill-paying responsibilities, but that offended his masculine sensibilities, so therefore I wasn’t allowed to touch my own money.  He didn’t prohibit me from using the ATM or anything, I just never had any idea if there was any money in there, so I didn’t even try.  He “kept track” of the bills on the backs of random envelopes, using his own chicken-scratch that even he couldn’t understand, and eventually, we had a house foreclosure, a car re-poed (from my work… at my SCHOOL… how embarrassing), and thousands in debt to hospitals, doctors, utility companies…  What a mess.

He even took his name off of the car insurance before the divorce was final, and stopped paying on it, so I owed the car insurance company for two cars that weren’t even in my name, and I wasn’t even driving them.

And then I went to buy a car…  Because I had cosigned for his work van (which he GAVE to a friend before leaving the state), and payments had not been made on it for several months, I almost couldn’t get a vehicle at all.

But I did (paying almost 25% interest), and I knew I would never miss a payment.

Does this sound familiar? Are you asking yourself, “What do I do NOW??”

Step One:  Order a copy of your credit report from all 3 credit companies: Equifax, Transunion, and Experian.  You are entitled to one free copy per year, so do these three all at once the first year, and then in future years, order one from one company every 4 months.  They will all have similar if not the same information, and that way you can keep track of your progress, and dispute anything that should not be there.  DO NOT pay for your credit score anywhere!  You can get it for free at Credit Karma. Your score is handy to know if you are going to the bank or credit union to try to get a loan.  They can crunch some better numbers if you have an idea of what your score is.  Don’t freak out if it’s low.  Mine was in the basement, and in 4 years, It has gone up over 200 points.

Step Two:  Take care of as many outstanding debts on your credit report as you can.  And as soon as you can.  Always request that they remember to make a note on your credit report that the account has been resolved.  Sometimes you can even negotiate a settlement amount less than what you owe.  Make sure to dispute any claims that are incorrect, as well.  This takes phone calls, something I abhorred doing, but have gotten much better about, primarily through this process.  This report is YOU, and you want to look your best to the world.  You want it to reflect you, your values, and your work ethic accurately, and it may take a little work to get it back to where it needs to be.  Nobody can do that but yourself!

Step Three:  Take a hard look at what is coming in every month (and don’t count on the child support — Only depend on yourself), and what is going out.  You may have to cut back on some things while you are paying all off this debt.  You would be surprised what alternatives there are out there to the things we think we have to have.  The library became my best friend, as well as a little group called Freecycle, and Craigslist.  I became a bit of a bargain hunter, which is a great skill to have, regardless of your income.  Notice that I said “bargain hunter” and not “couponer”…

Step Four:  Pay every bill on time.

Step Five:  Once you are out of the woods, which may take a few months (or even a few years), you need to start some long-range planning.  Check out some trusted sites to help you with both your day-to-day budgeting and your long-term plans: Mint.com, and Learnvest.com.  I have tried both, and personally like Learnvest’s whole-person approach, as they give you articles and training based on your interests, but it is woman-centered, which may or may not appeal to you.  Lots of people (and I mean LOTS) use Mint, as well.

Finally, if you are not already a member, I highly recommend using a credit union.  They have fewer fees, and are more likely to reward somebody like you, working hard to take control of their finances, with better interest rates, and needed loans.

As you start digging yourself out of the hole, make sure to take care of yourself, and to even pamper yourself every once in awhile.  We are human, and we need some creature comforts to remain that way.

You can do this.  You will find sources of strength you never knew you had.  And you will have the power over your own money, which is a fantastic feeling.