Debt can be crippling after a divorce, especially if you are not receiving alimony or child support. Your income is your most powerful wealth building resource.
It doesn’t matter whether you’re in your mid-60s trying to rebuild your estate or 25 and just starting to develop your profession… your income is key to staying afloat. Don’t depend on any other resource to take care of your finances. You must work harder than ever before to regain lost ground.
So in order to pay off your debt you must take budgeting seriously. And if you are at the older end of the spectrum– and wish to retire with a cushion– it’s time to put in the work.
If you need help with organizing your financial documents, you can get a copy of our FREE Divorce Financial Documents Checklist.
That means 99% of the time, you’re making the necessary sacrifices to pay off what you owe. An easy way to earn a little side cash is to sell your stuff. Most people have much more than they need anyways. Look around and ask yourself if you need it or if it makes you happy. Will you miss it? See it as a movement towards minimalism. Declutter your space and invite a peaceful atmosphere into your home– all while putting cash in your pocket that will go towards your dwindling debt. Divorce is an opportunity to start over. You may even enjoy getting rid of old tokens while focusing on building your future.
Another easy way to save is to avoid eating out. Make all your food at home. Don’t know how to cook? There’s a YouTube channel for that. If your friends complain about not seeing you at their favorite bars or restaurants, organize a potluck dinner at your home. The same for the kids… make special dinner nights with friends and family so you don’t have to pay a heavy bill. Everyone will understand what you’re aiming to accomplish and will help out as they can.
You can save hundreds of dollars a month with adequate meal prep. You may have to substitute your favorite dish with beans, rice, and potatoes… but just do it! It’s only temporary until you’re back on your feet. Cutting out all alcohol, soda, and other drinks will save you money too. Get a water filter and fill up your bottle before you leave the house. The same with coffee…. a $5 coffee a few times a week can save you around $800/year. Live simply and you’ll notice a difference immediately.
The closer you get to paying off your debt, the more you should start thinking about an emergency fund. One expert suggests, “Throw every dime you can into building an emergency fund of three to six months of expenses. And after that, you’ll have to spend about 10 years pouring $12,000 a year into good mutual funds for retirement. Can you do that and retire with some dignity? Yes, you can. But it’s not doable if you’ve got $37,000 in debt hanging around your neck.”
You want to lean into your debt and take it head on with a mighty force. Set a realistic, time oriented goal to have it paid off by. Do the math, organize your budget, and get crackin’. Try to make it disappear as quickly as possible and each day will be better for it.