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become financially smarter

4 Ways Divorced Moms Can Become Financially Smarter

become financially smarter

 

During my work with women who were going through or recovery from divorce one of the most frustrating aspects of the work was their attitude towards money. I’ll go out on a limb and say that one of the main stressors for women after divorce is money.

Yet, when asked what their plans were for relieving their stress over money, the majority didn’t make that a priority in life.

I worked with clients who had been long-term stay-home-moms, their only financial plan for the future was to live on child support and alimony. They were doing without; their children were doing without and the main concern for these women was not having to make a change in their role as a stay-at-home mom.

They feared working or building a career for themselves would be too disruptive for their children without acknowledging how being stressed for money was damaging their children. The only role money took in their lives was the lack of money.

When asked what their plans were for when their children reached the age of majority and child support stopped or, alimony was no longer coming in, I got shoulder shrugs in return or, “I’ll figure it out.”

Sorry, but the time to figure it out isn’t then when you have even less money than you have now.

A recent Prudential study on the “Financial Experience & Behaviors Among Women” shows, unfortunately, that women have not come a long way when it comes to money. Women feel no more prepared to make smarter financial decisions today than they did three years ago — or even a decade ago.

And, based on my experience with divorcing clients they’re not prepared to make smart financial decisions when smacked in the face with divorce and the possibility of living in poverty.

Divorce doesn’t mean remaining financially dependent on a man you are no longer married to. Divorce not only legally ends your relationship with your husband, but it also sets a woman free to make her own way in the world and, to do that she must be able to make her own money and smarter financial plans for herself now and down the road.

If you’re divorced and reluctant to go back to work or, fear what the future holds for you financially here are 4 tips to help you become financially smarter.

Get educated: Learning about money is important, and the more of a role you take, the more enjoyable it becomes. You may consider taking a few classes in finances at a local college, university or online.

This might be a little extreme but, I can guarantee that you will be better off if you start to get a handle on your finances. There are hundreds of books, podcast, blogs, and videos that can help you gain a better understanding of your personal finances. We can’t “stay dumb” about money. It limits our options in the world, not to mention feelings of self-worth and competency.

Track and budget: In order to make smart decisions about your money, you have to understand where your money is going. Start by tracking your expenses for one to two months. Once you see where your money is going, you can start to weed out the unnecessary expenses. Use this information to create a budget that reflects your needs instead of your wants.

To help make tracking and budgeting easier, you can download smartphone or tablet apps such as Mint, GoodBudget, and Expensify. Creating and keeping your budget is one of the simplest ways to not only learn about your finances and spending habits but to be more informed and involved so that you can make smart decisions about money.

Start saving now: Retirement might seem like an eternity away, especially for women in their 20s, 30s and even 40s, but saving for it is incredibly important for financial security. The earlier you start saving for retirement, the better your financial picture will look in the future.

If you work and your company offers a 401(k) plan or 403(b), make sure you contribute as much as you can. This is especially important if they offer to match your contribution. Remember, this is essentially free money going into your retirement account. If your company doesn’t offer a 401(k) or 403(b), consider opening a traditional or Roth IRA. The sooner you start saving, the longer you are allowing your money to grow.

Get a job: Unless you’re wealthy or a movie star, your economic level will decrease as a result of divorce. The same income that used to run one household is now running two. You’re going to need to supplement the income from child support and alimony with earnings of your own.

If you worked in the past, re-enter your career field. If you don’t have a work history but skills that make you marketable, make a list of those skills, build a killer resume and start networking. If you have no marketable skills, it’s time to get a degree or take courses that will help you become more marketable in today’s job force.

Women can be very smart with money. All we need to do is start getting in the game and stop believing that financial issues are too complicated for us to understand.

The post 4 Ways Divorced Moms Can Become Financially Smarter appeared first on Divorced Moms.

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