Life after divorce is different in so many ways. Financially, you’re officially the head of your household. This may be a relief to some, but for many it can be intimidating. How are you supposed to manage your finances as a single Mom?
If you’ve had a partner to help you manage your money for many years, it can be intimidating to face the task alone. As a single mom, you have added concerns – how will your new financial life impact your kids? Are you going to be able to provide them with all of the same things they’re used to?
Between finding new housing, figuring out alimony, adjusting your expenses to match your single income, and wading through any joint and individual debt you may carry over after the divorce, there’s a lot to consider. The easiest way to manage your finances as a single mom is to break it down into two steps – knowing what you owe, and knowing what you own. You can work on setting goals and building a budget using this knowledge as a solid foundation.
It’s important to have a full understanding of your expenses and any outstanding debt that you need to take care of when heading into life as a single mom. This may be the most overwhelming step you take when building your new budget, so it’s best to get it out of the way first. You can either make a hard-copy list with a pencil and paper, or you can start putting together a spreadsheet to track your expenses and debt virtually.
Next, jot down your recurring monthly expenses. These might include:
Then, think through what expenses happen annually. These might be:
After that, think through any “extra” expenses that crop up throughout the year, or that happen every day. Some of these could be:
Finally, look into what debt is outstanding that you (and possibly your ex-spouse) owe. These debts can be individual or owed by both you and your ex-spouse together:
The point of this exercise isn’t to shame yourself. Instead, look at this list of expenses and debt as a comprehensive overview of everything that’s going on in your financial life right now. You have full control over many of these expenses, and you’re already ahead of the game just by embracing the fact that they exist and need to be addressed.
Knowing what you own and why is another big part of managing finances as a single mom. This will be a much quicker process than listing what you owe, but it’s good to know what assets are truly yours after moving through a divorce. You may own:
Essentially, you want to list out all of your assets to get a sense for how much money is coming in, and your total net worth.
If, at this point, you’re feeling overwhelmed, don’t worry. Finances are an intimidating part of life to manage on your own. Even if you feel confident that you know what you owe and own, have a plan for paying down debt and growing savings, all while balancing lifestyle goals as a single mom – the pressure of making ends meet can be exhausting.
When you set financial goals for yourself and your family, it’s important to remember to give yourself some grace. Don’t expect everyone to go from living a comfortable lifestyle to living on a shoestring to repay debt or build savings as quickly as possible. You and your kids are all going through a lot of change right now, and setting reasonable, attainable financial goals for yourself is a form of self-care during this new season. The same is true for creating a budget. While some of your expenses may need to be reduced to live within your means, you don’t have to cut out all extra spending immediately.
I prefer to help people reduce larger expenses and keep some of life’s little luxuries intact – like your daily latte after dropping kids off at the bus stop, or Friday night family dinners with your kids. This might mean selling your expensive vehicle and paying cash for a used car to reduce your debt and cut out a monthly car payment. It may mean downsizing your living space to save money every month on rent or a mortgage payment. The point is, you have options for both your budget and your goals, and there is no “wrong” answer.
Do you feel like you need help managing your finances as a newly single mom? Contact me today. You’re not alone in this, and together we can help to build a financial strategy that helps you move through this stage of your life with confidence.
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