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Separation
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It's ironic how so many of us divorce due to money problems, yet statistically divorce causes more financial hardship.  But, by the time you see just how bad things are about to get, it's too late.

Once the train leaves the station, you're in committed relationship with divorce, you on an east bound train and your money's heading west.  As attractive as it seemed when you literally wanted to live in another country rather than share this one with your spouse, you eventually come to terms with the impact divorce has on your household income.

Problems with income and expenses

If your spouse was the primary breadwinner you may be facing serious income reduction regardless of support he/she may provide.  If you were the primary earner, you will likely have support responsibilities that can seriously put a dent in your monthly cash flow.  Additionally, the cost of two households may have doubled overall living expenses for your family.

Combat income reduction

Difficult as it may be, your new situation is likely permanent.  If your settlement has been established by a court order and signed by both spouses, it's a done deal.  In some circumstances, you may be able to renegotiate the settlement directly with your spouse or if there was legal wrongdoing when negotiating your settlement, you may be able to take your spouse back to court; but, it's costly and uncommon.  So, unless an attorney agrees the case is worth pursuing, it’s time to get down to reality and fight income reduction with three basic weapons.

Increase primary income

Time for a raise, promotion or transfer if you would like to stay with your current employer.  Otherwise, you should look into a higher paying position with another employer.  If you have maxed out your opportunities in your current line of business you may want to consider a 2-4 year degree program at a local college.  Seek a degree or certificate for a new career that has higher earnings potential equivalent to 25-45% higher than your current income.  Check out local job boards like Indeed® or Monster® for jobs ranking highest in pay and demand.  Check out the 2020 DMK article, Top Job Sites for a complete list of the top Job Boards, Sites and Search Engines.

Add secondary income

Your second job may not be like your main job.  If you already work full-time or are a homemaker working long hours you may feel like you don't have enough time or motivation for a second income.

Try thinking outside of traditional employment in order to make it work.  Find jobs with flexible hours or start a small business.   

Secondary income can be more speculative and "about you" and your interests since it's not relied upon for primary income.   Make it exciting and it will be less like work and more like a new venture with unlimited possibilities (or at least a great way out of debt and into personal financial freedom)! 

Sometimes, eventually, these jobs or small businesses turn big profit and later become primary means!   Who wouldn't be excited about that?! 

But first you need to decide what you want to do and get over what holds you back.

Boundaries and Solutions

Listed below are some common reasons why many of us don't seek second jobs.  We also listed some ideas that may help.

No childcare - Locate in-home secondary jobs such as babysitting, bookkeeping, virtual assisting and virtual customer service jobs.  You could also locate jobs that allow you to bring your kids or that offer on-site daycare solutions.  Ask a relative or close friend for help with childcare.  Work nights or weekends when the kids are with your co-parent and find a responsible teenage sitter on other nights.

No time - You have time. Besides health and family, finances should be a priority.  Time with your children is important, but you need to have enough money to pay your living expenses so that your kids have food, shelter and security.  Find a job that allows you to work around your current schedule.  Cancel commitments of non-priority.  This means volunteer work, social events or other commitments that are not providing an income or path to achieve a higher income in the future.  If you are currently enrolled in classes, you may need to switch to online or hybrid classes.  Yes, there are sacrifices, but with the right planning, they will be temporary.

Damages social life - If you're super social and fear a second job would damage your social life, find something that gives you a chance to make new friends and work with people (e.g. bartending, event ) or include your current sphere of influence (e.g. independent sales). .

Variable work schedule - The only way to work around a variable schedule is to find a second job that also has flexibility.  Find jobs that can be completed anytime of day, allow you to log onto your home computer or app when you are available or allow you to choose the times and days you are available.

No motivation - As mentioned earlier, your second job shouldn't necessarily be like your main one.  Look for something that fits your hobbies, interests or social motivations.  It can help solve your money problems while giving you a creative or social outlet that can provide overall life satisfaction and personal happiness. Just don't give up until you find what you need and seek.

Seek or improve investment or passive income sources

If you have investments that provide dividends used for your living expenses you may want to consider speaking with your investment broker to make sure your current investments are inline with your income goals. 

Perhaps, consider passive income opportunities that have the potential to return a higher yield than your current investment returns.  These investments may be a silent partnership in real estate or small business.  If you choose to invest as a silent partner, the venture should have documented potential growth and a reputable and reliable business partner.  Make sure you understand the risks associated with higher-risk/higher-return investments by speaking with a financial consultant or expert (e.g. real estate broker or business consultant) prior to any changes.  

Speak with your accountant to understand tax ramifications associated with investment changes.  Make sure you also understand any early withdraw penalties associated with reallocation of funds from an investment account to a speculative venture such as real estate or small business investing.

Reduce expenses

Another way to deal with income reduction is to modify your expenses.  Your expenses generally fall into two categories: monthly recurrent expenses and monthly spending on things like gas, food and entertainment.

Recurrent expenses

It may seem like there isn't much you can do about your monthly expenses because they are for things that you can't imagine living without or reducing usage. However, it's important to recognize how a little bit here-and-there can start to add up. If it means you only need an extra 15 hours a week to meet your expenses rather than 25, it would be worth locating some drains in your monthly budget.

Possible cut-backs

Cable - Much has changed in the cable business over the past few years. Seek options to remove your rented digital cable boxes (ask about Roku® box alternatives), reduce or remove your packages or premium channels or cancel the service completely. There are numerous options in television and the most economical would be a digital tv antenna or Roku® which among other things, provides access to free movies, streaming channels and apps after a one time purchase* of the Roku® box (*some apps and channels have additional fees). Try providers like Netflix®, Hulu® and Sling® for a cost saving way to watch popular shows and movies without cable.

Landlines - If you haven't already done so, remove or limit your landline to emergency service only. Cell phones have become an acceptable primary means of contact and limit confusion regarding ways to reach you.  It's one less voicemail to check and one less bill to pay.

Utilities - Hire your kids to save you money.  Pay your kids a nickel for every light, tv or device they turn off.  Make this offer for a couple months.  Keep a tally and note the difference in your monthly bill.  While it may not seem like much, remember you're looking for small drains in your budget that cumulatively add up.  Plus, it will instill a great habit that will last well after your home bonus program expires.

Determine if you have energy leaks or inefficient systems that, with their replacement or cleaning, may reduce your overall long-term expenses.

Transportation - Purchasing a newer vehicle that consumes less fuel may actually save you on your monthly expenses. Make sure you factor in insurance costs, taxes and licensing for a new car.  Look for carpooling options and/or opt to walk to local shops or eateries instead of driving.  Otherwise, consider selling your vehicle with a hefty payment and buy a less expensive, 4 cylinder for cash.  Insurance can be reduced to liability and fuel expenses reduced along with no monthly payment.  If you don't have the money upfront, buy a vehicle that you can pay-off in 12 months or less to assume this savings within the next year.  At the very least, but still with big savings, just get a less expensive, fuel efficient car with a smaller payment and perhaps lower insurance premium.

Tuition - It may seem like a private or parochial education is imperative to your child's success.  But, if you live in an area where the public schools are highly rated you may be wasting a great deal of money.   Also, part of the funds you save could be dedicated to your child's college tuition.

If you too were educated in a private or parochial school, it's easy to think your child should have the same or better education as when you were a child.  But, change is not always bad and you may find that your child will be happier and just as well educated in a public school system (especially if it means you will be more financially secure and happy).

House staff and service providers - Cut your own grass, do your own landscaping, clean your own home and care for your own pets and children if you need to reduce household expenses.  

If you can't live without the help with any of the above and can't afford it, find something that you can barter in order to achieve the help you need.  Conversely, if you are qualified to earn more in the same amount of time it would take to do these home chores, then don’t hesitate to hire trusted caregivers to help with your home and family so that you can earn more in your specialized profession.  

Spending

It's time to cut back. But, sometimes it may seem impossible to cut spending on things like food, fuel and necessary items.  See the 2020 DMK Budget Series for help.

Coupons - Coupons and coupon apps can save a lot on weekly groceries. Even $10 a week can be a tank of gas at the end of the month. Just don't use a coupon on something you don't normally purchase.

Clothing- Shop local second-hand shops for clothes and household items instead of online, supercenters or malls.

Fuel - Do not use premium gasoline unless required for your vehicle.  Try a fuel-injector cleaner, get a new fuel filter and/or tune-up to increase fuel efficiency.

Entertainment - Find a dollar movie theatre in lieu of full price movie theatres.  Look for happy hours when choosing a place to meet friends for dinner and drinks, go to a free museum, local attraction or outdoor activity instead of mall shopping, attend concerts in the park or dollar theatres instead of regular cinemas. 

Food and spirits- Cut back on eating out.  Pack your lunch, reduce weekend outings and limit time at bars and nightclubs.  A simple way to save money, live healthier and lose weight is to buy less packaged food.  Switch to fresh foods and prepare your own meals and snacks.  Modify your diet to reduce how much junk food you purchase.  Things like chips, soda, sports drinks and frozen pizza really add up and increase your weekly grocery ticket.

Manage financial emotions

Life’s a long game.  It’s filled with many twists and turns that are not always expected. The best way to defend yourself is to prepare, plan and address financial problems immediately.  When something unexpected happens, you should be able to rely on a backup plan and/or initiate a new plan to immediately address any problems.  The longer it takes to realize there's a problem, the more damage the problem will cause and the longer it will take to resolve.

So, while you initiate a plan to fix your financial woes, the issues themselves may not be solved overnight.  In the time it takes to fix your problems you will likely have some emotional burdens that can affect your well-being.  This may cause you to react in such a way that may negatively affect your financial burden even more.  If you find you are unable to curb spending or unhealthy decision making during this period you may find therapy or a support group helpful.

Consolidate debts

Debt consolidation is one way to reduce your monthly payments.  This can be achieved when you transfer numerous, high interest loans into one, lower interest loan.  If you transfer multiple revolving credit cards into a lower interest card, just know there may be a higher interest for transfers as well as fees.  Also, the interest rate may be limited for a specified period of time and will eventually go up.  There may also be fees and increased rates if you fail to pay your bill on-time. 

Other consolidation methods include: Home refinance with cash out, a second mortgage or secured debt consolidation loans. All require a lien against your home but can significantly reduce your monthly expenditures.  It's important to close your paid-off accounts once consolidated in order to avoid the temptation to get into a worse situation with maxed out cards and a consolidation loan.  Also, know that your debts are now costing you less to pay back, but risk your home in the process.  Speak with a mortgage broker, financial advisor or credit counselor for guidance.    

Credit Counselors

Do not confuse marriage or individual counseling with credit counseling. 

Credit counseling is helpful in advising and negotiating affordable payment plans to help you get back on track.  They also provide education and resources related to improving your credit and reducing debt.   Some provide information related to bankruptcy. 

Some popular credit counseling companies include:

Fair Credit

Money Management International

American Consumer Credit Counseling

Take Charge America

Alliance Credit Counseling

While credit counseling may be beneficial to you when suffering from financial crisis, the emotional and psychological guidance and support from a licensed counselor or therapist with experience in treating people with financial problems is very beneficial.

Motivation can be found in actionable solutions

It's a dreadful thought to think about doing more when you feel like doing less.  However, enough can't be said about active problem solving.  This means you realize something is not working and you fix it without delay.

A problem with income loss following divorce is obvious.  The solution is not.  Somehow getting the motivation to work harder to achieve the same or less than you had before is difficult to achieve.  We put up mental boundaries that are created with frustration, fear and righteousness.

In many cases, all those feelings are completely normal.  They will also normally destroy your life, if you let them.  At some point you have to break free and proactively solve the problem.  Taking action to solve the first problem is the hardest part.  Once you solve one problem you will be amazed at the possibility of solving numerous problems with the same mindset.  Life will get easier, you'll feel empowered and money will be more attainable.

-OurDMK.com



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