4 Ways to control debt after divorce
One of the worst side effects, after going through a divorce is the downward spiraling of your finances especially if both parties were contributing to the lifestyle enjoyed before. You can regain control of your finances after divorce no matter how bad your situation is.
This was the case for me.
I literally hit rock bottom financially and felt very helpless.
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Why I needed to regain control of my finances
I searched the internet for ways to help but I couldn’t find examples of situations similar to mines that would have given me hope that all is well. I found this so because many people only touched the surface and were limited in sharing their experiences. I wanted to make a difference so here is my situation.
My out of control finances
I was the one that was paying the mortgage from day one and after doing so I was left with only $150.00 at the end of each month. I still had other responsibilities, buying groceries, paying the utilities, and providing the children with what they needed since two of them were still in school.
How possible it is to get all that done with $150.00? Quite impossible!
That was the severity of my financial situation after the divorce.
How bad did it get?
Here are two examples:
Disconnection of Utilities
One week after separation, my electricity was cut. Since I wasn’t the one responsible for paying it, I went to inquire the reason and was told that the bill had overdue payments for over $1000.00. In order for the electricity to be restored, I had to pay 75% of the amount. It took me over 2 weeks to get that done which means that my house was in darkness for 2 weeks. Even though I got it restored, for the next two years every time utilities were up for disconnection for nonpayment, mine would be cut.
Outstanding Debt to the Bank
There was a line of credit issued by the bank in addition to the mortgage prior to the divorce which was to be used as a backup. You know how we don’t like to read the fine print right? Well, I didn’t and what I didn’t realize that the line of credit was just like a credit card with a very high-interest rate. You guessed correctly, yes it was given out first and after using it and receiving the first statement I realized that the payback was over $800 per month.
How was I going to pay this back with only $150.00 per month in my hands?
My Finances came crumbling down
I can still remember the day I received the call from the bank’s lawyer asking me to come into his office. When I got there he gave me a letter to read. I broke down right there and bawled like a baby. Not only did I have to pay the entire amount for the line of credit but I also had to pay an additional 10% for the lawyer and I had to do so in 7 days. It was over thirty thousand dollars.
There are many other examples that I could share how dire my financial situation became however I was able to regain control of my finances by doing the following.
Here is how you can Regain Control of your Finances
1. Become an Entrepreneur
This is your opportunity to start the business that you always wanted to start. Establishing a business will provide you with additional income that you can use. And no you don’t have to have a lot of money to start a business. I started by selling candies, popcorn, cakes, ice pops, pens, pencils, erasers and sharpeners to the students at the school where I worked. The monies I made enabled me to purchase food and gas on a day to day basis. Do you enjoy baking? Then you can start a business baking for the persons where you work or the persons in your neighbourhood.
It may seem uncomfortable to you but when you are in an unordinary situation, you have to do unordinary things.
2. Get a Second Job/ Parttime Job
Getting a second job will certainly ease the squeeze financially although it may be taxing on the body. I got a part-time job working at a restaurant as a cashier or 3 days per week. While the hourly rate wasn’t much to talk about, the number of tips I received compensated for it. Using the tips I received I started throwing a box ( something like a savings but not in the bank) and invested to start my second business. I started selling stainless steel jewelry and ladies handbags. I do have an entrepreneurial mindset from since I was a child. I had that job for over 2 and a half years.
3. Refinance your Mortgage.
It is a good idea to get all of the debts under one umbrella. Refinancing your mortgage will reduce the number of monies that you would have to pay back thereby putting back more monies in your pocket. Through refinancing, I was able to merge my mortgage, my car and that line of credit together enabling me to free up $1000 of my monthly salary.
4. Give Back
You have always heard that it is more blessed to give than to receive. I can tell you that it is the truth. I have seen this principle work in my situation. Even though I was struggling financially, I made sure I found a way to give of the little that I had. I gave 10% of everything I earned to my church in tithes. Additionally, every time I saw a need I contributed to it. I received multiple blessings.
Doing these four things I was able to control my finances. I am now at the point where all of my bills are paid in full and on time and I don’t have to worry about how I am going to get it done.
I am not going to say that it’s going to be easy for you as it will take work on your part. I can tell that I followed the strategies mentioned to regain control of my finances. From my experience, you will see that no matter your financial situation you can regain control of it.
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