Preparing for Single Life
It can be a difficult task to build a new single life without having a good understanding of your financial obligations and assets before you file for a divorce. In addition to the mental, emotional and physical costs of a divorce, it can also be financially disastrous if handled incorrectly. That’s why it is so important to organize all of the paperwork in your life that relates to money. This includes all bills, all past bank statements and any other important permanent records too.
Once you have your financial documents in order you can better determine your financial situation and create an appropriate budget for your future single life. When organizing the bills, you must separate the paid bills from the unpaid ones and the new bills from the old. Create different categories for the bills like house payments, credit card bills, car payments, and grocery bills. After all the current bills are organized, marked and stored in one handy place, throw away all the old bills and stuff you are sure you will not need later.
You will also need to keep all of your permanent legal documents including birth certificates, passports, retirement account statements and other permanent records stored in a place where you can easily find them. Not all legal documents are bills, but bills often become permanent legal records after they are paid and you have a receipt for the payment. Records like tax returns and mortgage payment records should be kept indefinitely. Just like the bills, categorize, organize and store your legal documents accordingly.
You can attempt to create a new budget after you have organized the bills. Try to estimate your actual monthly spending based on past history and be sure to keep an accurate record of what you actually do spend monthly. You can create an accurate picture of your monthly living expenses by comparing your estimated spending to your actual spending. The results of the comparison can help show where you are spending too much and also show you areas where you can cut back on spending.
You won’t be able to reduce spending until you are able to determine the areas where you are spending too much. You can’t really cut back on fixed essential spending like mortgage payments or food, but you can usually reduce your utility bills without too much trouble by turning off the lights and heat in rooms you aren’t using or taking shorter showers. Other areas of non-essential spending like restaurants, movies, and entertainment are all areas where spending can be reduced without compromising your lifestyle too much.
You might be able to reduce your fixed monthly bills by paying the bills on time to avoid paying any penalties. Get rid of any credit cards you don’t use and reduce the number of credit cards down to the accounts with the lowest interest rates. You can also try to renegotiate your mortgage or rent and obtain a lower monthly payment if possible. Open a new savings account and put what you can afford into it. Emergency cash expenses are much easier to deal with if you have set some money aside in advance. It is impossible to cover every contingency, but having an emergency supply of cash is much better way to start your new single life than without any cash set aside at all.