From the depths of debt to a cash based existence

Although I have been struggling with a major financial decision for the last 6 months, I have finally concluded that the cons outweigh the pros at the moment and that I’m going to hold off on doing anything major quite yet.

I thought I was going to pay a few things off, then I thought I was going to sell my house and use the proceeds for a special project, then I thought… what the heck? I need a break from all these life changing decisions! And that’s where I’m at now.

Divorce has been a blessing in disguise. I am not going to say too much just in case you know who has discovered this website, but financially speaking, I think I am better off than I’ve been in years. I don’t want to jinx myself, but it is the flat out truth. I can actually go to a movie once a month and not feel like I’m breaking the bank!

Another thing is my renewed motivation for taking a side job I do and turning it into a backup plan for my iffy day job. It is taking some real work and effort but I am seeing small progresses every month. I can’t guarantee it will continue to increase, because this month does seem to be slowing down, but I am going to continue to work at it and hope that my work pays off in the long run.

Even the custody arrangement is working well. I have the kids most of the time, but I get breaks that allow me to refresh myself so my nerves can settle and I can be a better parent when the kids return–until they start to drive me crazy again.

There’s something about having 100% responsibility for children that really makes a difference in how trying it is on one’s nerves. I love my children dearly and absolutely think the current arrangement is best for them, but I am so ready for those breaks when they come!

I keep meaning to update the site with my progress with using YNAB, but there isn’t a lot to say. The program is fantastic and works so well for me that I am almost kicking myself that I didn’t go ahead and buy it sooner. Who knows, maybe it would have saved my marriage… Oh, wait, I definitely didn’t get the program too soon in that case. LOL.*

*Don’t take me too seriously here…. Divorce sucks, even if it is easy to look back and see that maybe it really was the best thing that could have happened in the circumstances.

Also, the only thing I haven’t wavered on is the need for a flush emergency fund. That is not a decision I’m putting off.

This is a "sort of" review. By that, I mean I’m going to tell you how wonderful this budgeting software is and how it’s made my life much easier when it comes to planning and spending, and being able to actually enjoy my money. Especially now that I have so much less of it after the divorce!

I’m going to let you visit the store for all the technical details, because I’m lazy like that. :)

YNAB stands for You Need a Budget. And really, you do.

You should seriously think about buying YNAB as soon as possible. Click that link for more information.

YNAB is Budgeting Made Simple

I had a budget made out before I purchased YNAB, but it was difficult to work with. I had set up both Mint and an Excel spreadsheet to help me track my spending and let me know how much money I had left in my budget categories. But Mint budgets aren’t that easy to work with, not for planning and tracking, and spreadsheets are better for analyzing historical data, when it’s just about too late to do anything about it. I was using Mint with my Android phone, and I still to do for that at-a-glance reminder I sometimes need to keep from forgetting I have plenty of money in my accounts, mostly that which I’ve saved up for irregular expenses, but since they usually fall at different times throughout the year, it has created a nice cushion for me so I don’t have to worry about overdrafting or other crazy stuff that can easily happen when money is so tight that you have to watch every penny.

Why Bother / How YNAB Helped

I found this really interesting site a few weeks ago, and I spent a lot of time on it reading about early retirement and what some people are willing to do to get there as fast as possible. It didn’t take me long to realize that I’m not averse to trying a few things myself to help get out from under the thumb of an employer. Early Retirement Extreme might seem to have nothing to do with YNAB, and really the connection isn’t going to be obvious for everyone.

But with YNAB, I’ve been able to hone in on my expenses and determine what it really costs me to live each month. Knowing that, it has allowed me to trim those expenses to the point where I am very comfortable with my spending choices.

When I first did a budget for my income exclusively after we started the divorce, I’m not ashamed to admit, I panicked. The numbers were very scary and I just didn’t see how I was going to make it.

But then I bought YNAB and started using it. I knew I needed to start over with my financial software because I had so much stuff entered (I am/was very detailed oriented) and the thought of setting up another comprehensive financial set of books for my personal finance was overwhelming and, frankly, annoying. Plus, my software of choice is getting old and I didn’t want to buy a new one when I really, really just needed something to help me stay on track with my spending. YNAB, which I had toyed with purchasing several times in the past, seemed like a good choice this time around, and I bought it.

I wish I had bought it years ago, but I’m thrilled I have it now. I have never had an easy time spending money without feeling guilty, as if I’m taking money away from everyone else in the family by choosing to spend and always worried that I was spending money that I would need in a month and that I would regret it horribly.

YNAB has turned that around. I’m still struggling to get over some of the guilt, because I think I let myself get messed up by always choosing to let the ex spend and letting myself be the one who "made up the difference" in the budget by not spending.

However, those days are over, and now I just need to be aware what I have available in each of my spending categories and actually make myself spend it!

I am enjoying my money for the first time in years. I have YNAB to thank for that.

Click here to check out YNAB for yourself.

There it will end, I hope. Once I get my certified copy of the divorce decree, I will be done with the legal parts of divorce and I can finally move on with my life.

I’ve done some moving on already, but it’s been mostly of the emotional variety.

I’m still deciding if I want to sell my house and move into a smaller place, closer to the schools. Otherwise my financial situation is going to require that I put the kids back on the bus instead of driving them, which means I will save a lot of gas and time in which I can work to earn more money, but will lose about an hour and a half of time with the kids each day. That feels significant to me. It’s 1.5 x 5 x 46 = 345 hours a year. That’s a LOT of time lost when I only have a few more years with them before they’ll be driving themselves (if they can afford the transportation).

The ex tried to use the kids in the divorce, filing for full custody himself but in depositions it came out quite clear that he was just doing it because I wasn’t offering him 50% of the time with the kids. The thing is, I want the kids to spend plenty of time with him, but his schedule means the kids wouldn’t even be with him! And yet, he wanted to take them away from me when I would be home to watch them and send them to stay with his mother. I was offended and hurt by that, but I kept it together and emphasized how important I believe it is that kids be raised by their parents and he dropped it amazingly fast. So fast that I know it was just a ploy. He’s had several opportunities now to spend extra time with the kids and he’s "already had plans" and couldn’t do it. Very telling, that is.

He’s always been a good enough father and I do believe he loves the kids as much as he can, but I don’t think he’ll ever be a great father. That makes me sad for my children.

For my finances, this end means I can finally take the steps I need to take to set myself up as securely as possible. I’ll never be entirely secure as long as I depend on an employer to provide my income. My job is looking more unstable than ever, and I estimate I have about 6 more months before it falls apart unless they do something amazing or drastic to keep the business alive.

For me, that means seriously pursuing other income opportunities or jobs. Since I don’t want another job, I have every intention of riding this until the horse falls over dead. :) While, of course, I pursue those income opportunities in the background.

I run some websites online that now make me about $200 or so a month after expenses. I am going to put a lot more effort into them and see what comes of it. I really have nothing to lose because I sure don’t want to spend my spare time looking for another job.

And that’s my latest update.

I’ve accumulated no extra debt. With the divorce, I’ve actually shed quite a bit of the little stuff.

I got the house, and the payment for it.

I got the car, and the payment for it.

I got the student loan, and the payment for it.

I got a bunch of legal bills, and paid for most of them, but I do owe my parents $1,500 that they keep telling me not to worry about until they retire. They’re crazy. I will be paying this off first, because I love them, and that’s what you do, you pay the important people first. I believe that will all my heart.

But those are my debts. He got the remaining credit card balances (2) and he got the RV camper and the payment for it. He got the truck and the payment for it (there was a lot of equity in the truck and 4-wheelers but I got the 401k because of that).

That’s it. Divorce done.

The Total Money Makeover by Dave Ramsey is a hugely popular book. I’ve been a fan of Ramsey since I discovered his radio show. I learned all the baby steps from his website and then pretty much did my own thing. A few months ago, though, I finally read the actual book. I wish I’d read it sooner.

The Total Money Makeover is an essential finance book for anyone with debt. There’s a lot more in the book than just the basic outline of the baby steps that you get from his website. Not additional steps or anything like that, but a more comprehensive look at each baby step and some additional step-by-step instructions for paying off your debts that give you all the hand-holding you’ll need when you get weak. It’s hard to get weak on paying off debt when Dave Ramsey is so good at motivating you to get out of debt as fast as you can. All you need to do is spend a little time rereading this book and you’re right back on track.

Buy The Total Money Makeover book from Amazon

Sometimes it is more about motivation than actual knowledge. We all have weaknesses. Mine is eating out, and without the motivational boost I get from reading books about getting out of debt, it’s harder for me to give up those extra expenses so I can afford to pay extra towards my debt.

Dave Ramsey is a radio personality to be sure, and he’s not everyone’s favorite personal finance guru because he has some very strong opinions about debt and credit. But he has good reasons for the advice he gives and just buying into the anti-Ramsey sentiment because he’s popular with the masses is a mistake. Ramsey has a few things to teach all of us and we would all do well to heed the majority of his advice!

I’ve been a fan of Gail Vaz-Oxlade for years, after watching too many episodes of Til Debt Do Us Part to count. She doesn’t mess around. Her advice is to the point and she expects you to be able to exercise a little self-control, but truthfully, if you can’t do that, it should be self-evident that you won’t be able to stop spending more than you earn and get yourself out of debt.

The Debt-Free Forever paperback from Gail Vaz-Oxlade brings all her advice into one book that you can read. When you finish, you’ll have a plan to get out of debt and stay out.

Buy Debt-Free Forever in paperback from Amazon

She really seems to know her stuff. She’s been a personal finance writer and columnist for 25 years and her advice on Til Debt Do Us Part is of the variety that makes you feel like she really enjoys helping people wake up and realize their financial situation needs improvement. Her attitude motivates those people to try a lot harder than they thought they could.

Purchase Debt-Free Forever if you need someone to give you a step-by-step plan to follow to get out of debt. This could be the book that turns your life around and helps you figure out just how bad it is but how doable it will be to get back on track with your finances.

This is my annual income now that I’ve increased my work hours at the office. The good news is that this is twice as much as I was making before the divorce started. I could have made more but I was focusing on being a stay-at-home parent.

On $22,433 a year, I can afford a whole lot less than I could afford on our two incomes.

Just for kicks, here is my balanced budget for my earned income. You’ll notice some major items that are in the budget at zero. At $22,433 annually, this is life.

My Budget

As you can see, this is not a long-term, workable budget. Without funds for some of these categories, any normal person is going to become overwhelmed by the un-sustainability of this budget. If I get sick, how will I pay for it? If I want to watch TV, I’m out of luck. I can’t buy Christmas presents for my children. I can’t provide a single meal out of the home unless I sacrifice funds from my already unrealistically meager food budget for 3 people.

The good news is that this isn’t the only income I have. I do have a small amount of funds coming from a few websites I built that earn money from affiliate sales. I make about $150 to $200 a month. I also have child support coming of $825 dollars. This extra $1,000 doesn’t go far, when I spread it between telephone, internet, health insurance, Christmas, groceries, auto maintenance, home maintenance… In fact, there isn’t enough to go around, but it has to do, because that really is the extent of what I have available to work with for the moment.

Imagine what life is like for some Americans though, those that do have to live on an income of $22,433 a year? Because there really are many full-time jobs that don’t pay more than this. It’s scary to think of it. It really is. It’s no wonder there are so many people falling behind and getting so deep into credit card debt, because basic expenses like food and healthcare can’t be covered by a full-time salary.

Minimum wage is $7.25 an hour and that’s an annual salary of $15,080. All I can say is that I hope only teenagers are working these jobs, because anyone living on their own couldn’t make it.

I do know that likely I’ll be selling my home and purchasing something less expensive within the next year or two.

My financial journey is beginning again. I look at this as a chance to do it different, to do it right.

We see what we want in the people we love. Does that mean that when we finally see what we don’t want to see we have fallen out of love?

I must not be quite there yet, because I am still having a hard time facing the reality of what my ex-to-be has done. It just seems so unreal to know that we were leading different lives when all along I thought we were sharing a life.

I wish I didn’t have to think about this divorce again. Sometimes I feel great but sometimes I’m still so heartbroken that I can’t see anything in front of me but the shadow of what’s behind.

I want to change my life, but I don’t know what kind of life I want or how I can pay for it.

The only thing I know for sure is that I don’t want to live in debt and I don’t want to spend the rest of my days worrying about money. I don’t want to end up with no retirement and a bunch of assets that aren’t really assets at all.

I have started a change of direction. I have the same goal: get out of debt and stay out of debt. But now I can get there my way, on my own timetable without consideration of someone else’s spending habits.

I haven’t been fooling myself. I am a better money manager and saver than my ex-to-be. I’ve managed to save for legal bills instead of rely on debt to pay them. I’ve been saving for my irregular expenses. I budget. I keep my money under my control even when it means passing up things I would like to have. But the truth is, I’ve lived a very austere life the last 10 years, feeling guilty for every penny I spend because I wasn’t working as many hours as my husband, because I worked only part-time, because I wanted to stay home even more and thought somehow that by not spending he would see that it was possible. He didn’t, and now I know that he never would have. He didn’t value any of the financial contributions I made to our family, because they were never enough.

I didn’t see any of this, because I imagined him to be so much more than he turned out to be. I made up elaborate reasons why he behaved the way he did, made the choices he made, had the reactions he had. None of them were real.

Because we really do see what we want to see in the people we love.

I came across this book today, and although this isn’t the time for me to be thinking about those extra kids I wanted but didn’t get, Selfish Reasons to Have More Kids is a book I want to read.

Without having read the book, I can think if one major reason why having more kids is better for your financial future and society as a whole.

Retirement.

The more children you have, the greater the chance that you’ll have at least a few who are capable of helping you out if you need assistance during your retirement.

Whether that turns out to be money or just someone willing to do things you would otherwise have to pay to have done, in the end, the cost of your retirement on society as a whole is decreased because you’re less likely to need government or community assistance.

One of my major financial goals right now is to get as much money saved up as possible. I’ve made it clear many times that we don’t have much savings. All that’s gone now and I am working to save up my own emergency fund.

Although I’m somewhat confident that this blog is private enough that my soon-to-be ex wouldn’t know how to find it, I find myself very hesitant to post anything about my financial decisions just yet on the off-chance he does recall the name of this blog and uses it to guide his own decision making process during the divorce.

All this means is that I’m saving all my posts about the financial impact of divorce for the time after the divorce becomes final.

I will say I’m doing okay. Emotionally, I have my moments, because let’s face it, despite our money issues, I have never wanted a divorce, but there wasn’t really an alternative I could live with after certain revelations.

I’m dealing with the divorce by keeping my eyes looking toward the future and contemplating the beautiful possibilities that are coming to my attention, and although I wouldn’t have given up the marriage for them, what’s done is done. I have to look to the silver lining.

The Silver Lining

• Total financial control
• No more sharing important decisions
• Freedom to live however I want
• Opportunity for a more loving marriage in the future; the chance to have a true partner

Things don’t seem so bad.

From NOLO, Divorce & Money: How to Make the Best Financial Decisions During Divorce addresses the money issues that come up during a divorce and tells you what you need to know so you can make decisions that will be in your best interest depending on your circumstances.

Buy Divorce & Money by Violet Woodhouse and Dale Fetherling

I picked up this book for the obvious reasons. I’m getting a divorce and I need to know a lot of stuff I’ve never needed to know before and I wanted to get it from a reputable trustworthy source.

NOLO is a recognized source of legal information for those of us who want to know more than most laymen’s books will tell us.

Divorce & Money is one of the most highly recommended books on the topic of divorce and money, with many people saying it’s the best book they’ve come across. I’ve skimmed the table of contents and read a few sections and I’ve liked what I’m found in this book. The level of detail is good and the advice seems solid.

There are 20 chapters in this book.

Table of Contents of Divorce & Money

Introduction

1. Legal vs. Financial Realities of Divorce
2. Financial Realities No One Talks About
3. Emotional Divorce: Managing the "Money Crazies"
4. The Hardest Part: Is My Marriage Really Over?
5. The Separation: What Happens When One Spouse Moves Out?
6. Closing the Books: What do We Do With Joint Property?
7. Getting Help: Who Can I Turn To?
8. Financial Fact-Finding: What Must I Know and When Must I Know It?
9. Facing the Future: What Must I Plan For?
10. Protecting Against Risks to Life, Health, and Property
11. Taxes: How Do I File and Pay?
12. Property and Expenses: Who Owns and Who Owes What?
13. What Will Happen to the House?
14. Retirement Benefits: Who Gets What?
15. Financial Investments: How Do We Divide The Portfolio Pie?
16. Evaluating Employee Benefits and Stock Options
17. How Will We Divide Debts?
18. Child Support and Alimony: What Might I Pay for Receive?
19. Negotiating and Finalizing the Best Possible Settlement
20. After the Divorce: How Do I Get From "We" to "Me"?

Appendix: Resources Beyond the Book

Index

There are a lot of good reviews of this book, so if you’re in a situation where you need some financial advice for a divorce, this book is an excellent option. Click here to read Divorce & Money reviews or to buy the book at Amazon.