With the New Year rapidly approaching, the battle becomes finding a resolution valuable, meaningful, and relevant that will last past the third week in January. It is safe to say that the number one choice is to lose weight: trim fat, tighten up, and get in a healthier mindset and lifestyle. That might be referring to food and fitness, but with a recent economic change in your life, it should be referring to finance. Whether you were a two-income family or one, whether you’re back on the job hunt, in the same career, or living off of alimony, it’s time to revisit those finances.
As someone who handled all of them for a household, it can be easy to feel free to buy whatever you want whenever you want it now that it is just one of you. On the other hand, if you came from having that luxury before of spending freely, it might be time to take a couple of classes or do some “light reading.” Even if you did have a solid grasp of what was going on financially in your marriage, the situation is now different. Having only one person to shop for sounds great all – a real money-saver – but no longer will someone nag you about unnecessary purchases, forcing you to reflect on whether or not you really needed a brand new wardrobe. That responsibility will have to come from you.
If you are farther along in the “single life” process than others, perhaps you have found someone new to share your life with. Likely, they have some different qualities and spending or saving habits than the previous partner. Nancy Hass discusses these differences in Elle Magazine’s How Much Did That Cost?! She discusses the challenges that come with balancing your own views on money versus those of the spouse. Polar opposite habits aside, there is much to be learned. Being aware of your spending and saving habits is the first step to becoming financially healthy, tightening up, and trimming the fat.
How to get started? Take a good look at your budget – realistically. What are the necessary, predictable, monthly expenses? Follow this up with those items that you can estimate (i.e. groceries, hygiene, clothes, car maintenance, etc.). Subtract that from your total monthly income. If you do not already have one, find a financial advisor that you trust to help get your goals on track. This could take several meetings before you find one that is just right – it is okay to be like Goldie Locks in this situation. Review the company’s ratings and strength to make sure you trust who is planning your future, and that they will be around longer than you (Standard & Poor’s, Fitch, Moody’s, A.M. Best Company are the four rating companies of financial strength). Every problem cannot be solved at once, but it will be a good road map to build on.
Though situations change and evolve, spending habits will ultimately need to be altered in some way, shape, or form. A wise colleague of mine always said, “Bad habits are easy to form and hard to live with. Good habits are hard to form and easy to live with.” Becoming aware of and cleaning up your finances is the fastest way to feeling independent and confident that you can tackle life’s adversity, leaving you with a feeling of success in 2012.