Let’s take a moment to extrapolate on the word “plan.” Going through a divorce is like driving cross country. You can have a plan for the route you’re going to take. But then you’ll face traffic jams, roads that are closed, accidents that are unexpected and you have to tweak. That’s to be expected.
And for stay-at-home moms, the journey is often even more challenging as we deal with how to move on and reinvent ourselves once the divorce papers are signed.
“You might feel like you had made an agreement with your husband that he was going to work and earn, and you were going to stay home and take care of the kids, and now the rug has been yanked out from under you,” says Emma Johnson, founder of WealthSingleMommy.com. “It’s a very emotionally wrought time.”
Moving on financially requires a look at your inflows and outflows in detail to determine what your new normal is going to look like, and how to make adjustments to get there. Here’s how to start:
Think carefully about your housing
While holding onto the family home may have been important to you emotionally during the divorce, it’s important to take a look at the actual costs of that home now that you’re fully responsible for it.
Run the numbers carefully to see what type of an impact downsizing to a more affordable home could have on your finances. That means taking a look at the cost of the mortgage itself, plus taxes and insurance and all of the monthly bills related to the cost of the house including utilities, HOA and upkeep.
And know that letting go sooner rather than later may be the right move: “If you can’t afford the house, everything else is going to be a strain,” says Carla Dearing, CEO of online financial planning service SUM180.
Work on your credit
Recently divorced women often find that their credit score is lower than they expected, either due to poor debt management as a couple when they were married or because they didn’t have credit in their own names during their marriage.
Regardless of the reason, now that you’re on your own, boosting your credit score is important. A poor credit score can prevent you from being able to rent an apartment or even affect future employment, whereas a good score will ensure that you can access loans at the best possible rates. Start rebuilding yours by making small purchases on a credit card and paying them off immediately, and setting other recurring payments to auto pay, so that you’re never late. And if you find you can’t get a card on your own, apply for a secured credit card pronto.
For more on boosting your credit, see “6 Surefire Ways to Fix Your Credit.”
Step back into the workforce
Even if you receive child support or alimony, you’re likely still going to need—or want—to start earning money of your own. The more quickly you can re-enter the working world and start earning your own money, the more quickly you’ll be able to secure your own financial independence and regain your financial confidence. Start by reaching out to friends and former coworkers to network and get the word out about what type of work you’d like.
Even if you’re not ready or able to jump back to corporate life full-time, there are benefits to short-term and part-time jobs and gigs.
“There are lots of opportunities now, even before you find your next career move, to work part-time and generate some income to just get by and keep things moving forward,” says Jamie Hopkins, director of the New York Life Center for Retirement Income at the American College of Financial Services. “A lot of people just make it work week to week until the right career opportunity opens back up.”
If your skills need a refresh, consider taking an online class to give your resume a boost.
Protect yourself from the worst
Since you’re fully responsible for your home’s finances, you’ll need to make sure you’re prepared for the unexpected. That starts with an emergency cushion: Aim to set aside three to six months’ worth of expenses, so that a hospital bill or a leaky roof won’t throw all of your finances off track. If three to six months’ isn’t achievable right now, start small, setting aside a little bit each month will grow faster than you think.
Also, consider disability insurance, which will protect your income if you’re injured or get sick and can’t work for a period of time. And, if your children are dependent on you for financial support, make sure you have enough life insurance to get them through college and into adult life.
Update your estate plan
You’ll want to take another look at all of your end-of-life documents to see what, if any, changes need to be made. You may choose to remove your ex-spouse as the beneficiary on your accounts and designate a new health care proxy and power of attorney. “You also want to create a new will, assuming you had your ex-spouse listed in your old will” says Stephanie Sandle, a Certified Financial Planner and managing director of MAI Capital Management. “That way if something were to happen, you’ll make sure that the assets go to who you want.”
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