Don’t let money stop you from being happy and independent! These tips on how to save money for a divorce will help you create a financial plan, so you can start your life over.
In Divorce: Think Financially, Not Emotionally: What Women Need To Know About Securing Their Financial Future Before, During, and After Divorce, Jeffrey Landers helps women focus on vital financial matters and offering specific instruction on a number of key issues vital to securing long-term financial security, such as building a top-notch divorce team, uncovering a husband’s hidden assets, protecting your personal assets, business and intellectual properties, dealing with pensions, 401Ks and other retirement accounts, and negotiating alimony.
The best time to start saving money for a divorce was the day you got married; the second best time is today. I’m not being cynical; I believe all women should be financially independent – or at least strong enough to be able to walk away from their homes and possessions if they want to start over.
Money is one of the biggest obstacles to getting divorced. Don’t let your financial situation trap you in a life you’re unhappy in – or even hate.
10 Tips for Saving Money to Get Divorced
If you earn your own money, start saving as much as you can every payday. It might start out as $20 every two weeks, or $500 a month. You can open a separate bank account to save money for a divorce, and ask the bank to automatically move a predetermined amount every couple weeks.
Save your financial windfalls
You’d be surprised at how much money you can save if you stay alert! A one time cash windfall from a relative, a tax refund, gift money, anniversary money, divert a second income, get a second job, sell some things that have value but you don’t use, don’t renew full insurance on a vehicle for six months or a year, or skip a big purchase or vacation (cut your vacation in half or spend only half your budget). The best tip on how to save money to get a divorce is to view every penny as precious.
Set up an automatic savings plan
If you struggle with money and are prone to spend everything you have, an automatic withdrawal/deposit coupled with a predetermined end date might be all you need. If you like to watch your money grow, start a chart to track your progress and be proud.
Learn what an emergency fund is
An emergency fund is a reserve of money set aside for situations where you suddenly need cash. An emergency fund can also be a long-term savings account for your plans to get divorced, because divorce can be expensive. It gives you peace of mind because you are partially prepared for unforeseen situations.
Assess your sources of financial help
Do you have assets you could liquidate quickly? Do you have family or really close friends you can turn to for help? Would you be able to turn to others for financial help (is pride going to get in the way or would it get in the way of your kids)? Is your credit rating an obstacle to getting an inexpensive and quick loan? Could you miss a mortgage payment without penalty because you have made double down payments in the past?
Learning how to save money for divorce will help you deal with financial debt after getting divorced.
Calculate how much money you can realistically save for a divorce
Some people struggle to save any money at all. For them, saving even $2,000 might result in feelings of failure and desperation. If you struggle financially and don’t know how to save money, it may be more realistic to save $500 or $1000. This may give you the fresh start you need might to get a divorce. Then, $3000 might just seem possible! Start small, and work your way up to saving more money.
Keep your money easily accessible
Your emergency fund needs to be very liquid, so you can access the money very quickly if you need it. Cash in your pocket is the most liquid, but if it is more than $100 it is too risky. Losing your purse could end your plans to get a divorce! Saving money under your mattress might be a bit more secure, assuming your husband doesn’t snoop or make the bed.
Get an interest-yielding savings account
If you can learn how to save money to get divorced AND earn money at the same time, so much the better! If you have more than $500, consider opening a bank savings account. It’s liquid, secure and will currently pay you between 0.2-1.5% interest on a high yield account.
Consider opening a money market fund
Money market funds once paid better interest than a high yield savings account. But, those days are over. The best money market funds pay around 1.2%, with some institutions offering a bonus during the first 6 months. Note that some money market funds cost you annually (or even monthly!) or there may be a management expense ratio (MER) that cuts into your paltry interest. Beware of load funds; make sure you purchase only no load money market funds for your emergency fund. If you do decide to save money for divorce in a money market fund, be sure the fund allows you to get your money out the next business day.
Avoid using your savings for regular expenses
Stay focused on your goal: you are saving money for a divorce. A new pair of shoes – or even an expensive birthday gift for your child – is an unnecessary expense, and should not derail your plans to start your life over.
If you need more tips on how to save money for a divorce, read How to Get Money to Leave Your Husband.
I welcome your thoughts on saving money to get divorced below, but I can’t offer advice or counseling.
My prayer for you is that you save enough money to survive the divorce – and even thrive when you’re own your own!