Debt management is crucial during and after a New Mexico divorce as this life event will impact your finances and how you are able to manage them. No matter what your situation is, try the following strategies for managing your debts so you can keep everything under as much control as possible after you’ve finalized your divorce.
Record Your Spending
Budgets work best when you follow them. Record your spending and your income at least once or twice a week. When you do this, you’ll have a better idea of your spending habits and how they align with your budget. If you see you’re overspending in one area but short in another area that’s more important, what you write down will allow you to see that and you can adjust your spending as needed.
Keep Up With Shared Spending
If you’re a co-parent, there may be costs related to your kids that you share with the other parent. For better debt management and a better co-parent relationship, track these expenses and reimbursements the best you can. When you know where you stand on parenting costs, both of you will be able to handle your own finances better, which is ideal for everyone involved.
Categorize Your Expenses
When you are tracking shared and personal expenses, give each one a category. Decide on some categories that will help you keep your expenses organized without making it too complicated. Once you have categories, you can also assign spending limits to the ones you want to keep under control.
Handle Your Credit
Working on improving and maintaining your credit is part of any successful debt management plan. Getting divorced on its own isn’t bad for your credit, but it can indirectly impact it, so it’s important you pay bills on time even if things are getting tough. If you didn’t have much credit in your own name during the marriage, now is the time to get accounts of your own so you can start building up a history.
Start Saving Money
Although it’s easier said than done, it’s important to stash away some cash in case of an emergency, especially since you’ll be down to one income. Putting away just $5 or $10 a month can help you build a rainy day fund.
Pay Down Debt
Bringing your debt down will make everything easier to manage. Pay off the debts with the highest interest first, if you can, as those are the ones that are costing you the most in the long run.
Get Smarter About Your Spending
Impulse buying is one easy way to waste money. If you’ve gotten into the habit of running through the drive-through each day or hitting up a gas station for a snack, it’s time to cut that out. The money you’ll save can go toward something more important, such as your debts or your kids.
Speaking of cutting, you can also do some things to save money on your utilities and your regular shopping. Start following those energy-saving tips your providers send, and look for sales and coupons when you need to stock up.
Get Help if You Need It
If you’re really not sure how to handle your expenses after a divorce, consider visiting a financial professional. Some of these professionals even focus on, or offer services specifically, related to divorce. A little help can go a long way, especially if your expenses are complex or you have a lot of other factors to consider.
Getting your finances in order is one of the first steps in your post-divorce life. Get started on your budget today so you can take control over your money from the start.