One of the most difficult parts of a divorce is the financial hit of losing one of the family income-earners. This is doubly true for parents, who not only have to balance monthly bills but also food, clothing, childcare, transportation, education and potentially child support. If you are fresh off of a divorce and your head is spinning trying to figure out how you are going to provide for yourself and your children, don’t fret; here are some tips on how to keep on top of all of your financial obligations.
- Budget! Spending blindly is a great way to burden yourself with unnecessary anxiety and stress. It might be intimidating at first, but you will feel much better about your financial situation once you’ve tallied up all of your expenses in one easy guide. Start with fixed costs ”“ your car payment, your Internet bill, cable costs, phone plans and insurance. Next, factor in your variable costs, such as groceries. After that, you’ll want to think about those rare annual costs, such as birthday presents, holiday gifts, certain taxes, vehicle registration and inspection, etc. Once you have all these costs tabulated, you will have a better idea of your leftover income and where you can trim the fat to keep your pocketbook padded.
- If you find that your costs of living are too high, as the 38 percent of single mothers living below the poverty line surely know, you might consider going back to school. College can be expensive, but there are a lot of scholarships and grants created specifically to help newly single moms. Putting down the costs of tuition now can help you earn more money later on, which will help as your kids start to get older and you have to consider the costs of extracurriculars, cars and eventually their college education.
- Look into special tax credits and deductions that you qualify for based on your income and children. If you are the custodial parent, claiming your child as a dependent on your tax return can earn you an exemption. If your income is low enough, you can qualify for the Earned Income Credit (EIC) which helps with college tuition and fees. Also look into the Child and Dependent Care Tax credit, which helps working families pay for the costs of childcare as well as adult dependents.
- Frugal shopping can save a ton of money. The Internet is a wonderful place to find essentials like strollers, cribs and other items that you will only need short-term. Craigslist and eBay can be a huge help ”“ in some cases, you might be able to get the essentials for free!
At Divorce Matters, we are focused on helping our clients get through the divorce process in the most painless way possible.