Although my husband moved out in September, we continued to pay our bills out of our joint checking account through the end of the year. This was largely for his benefit, since I earn significantly more than he does, but I was willing to do it out of the spirit of staying amicable. It also gave me a few months to think about taking charge of my own finances again. For most of the last 30 years he’s been in charge of paying bills and I just worried about earning money. I did keep a small checking account of my own as my own little slush fund (you know; manicures and the like).
So now it’s all changed. I’m in charge of all the bills now. In charge of making the money that goes into the checking account and making sure that all the bills for the house, the utilities, the insurance, the cable, etc. get paid.
Like so many other aspects of my life, I’m using the divorce as a catalyst for reevaluting my spending. As my husband and I went over the bills I would be paying, I questioned every item. Did I really need three-way calling? Did I really need a land line at all? It turns out that in my area, if you want high-speed Internet you have to have a land line, by the way. Did we really need to each have $500,000.00 in life insurance, now that we’re not going to be responsible for each other’s welfare and our youngest is out of college? Why were we paying $80/month for business-class Internet when we could probably do with $20/month residential service?
In our evaluation of the bills that we were paying (and had been paying for so many years) I realized that, like our marriage, we had become complacent with the status quo. It was easier, I guess, to just keep paying them than to call, question and maybe change.
Well, I’m in charge now, buddy; it’s a new day!
Here’s a recap of the changes I’ve made so far:
Reducing bills, getting more benefits and keeping it easy:
The first thing we did was call AT&T and negotiate a cheaper price for Internet service. We dropped every non-essential telephone service (call forwarding? I don’t even know what that is!). The combined bill (for wireless, satellite dish, Internet and phone) went down by about $100.00.
We agreed to keep $250,000.00 each in life insurance so that the mortgage would be paid off if one of us dies. We currently each carry twice that so the premium will go down.
I called the snow removal service to cancel the agreement. Neighbors have a snow blower that they’re loaning me for the rest of the winter so I figured that I would just deal with it myself. When I called to cancel though, the snow guy dropped his price by more than a third – that’s a deal I can’t resist. I’ve never been a haggler, but that was just so easy!
Any bills that I can pay by credit card are being paid that way. That way I’ll earn points on purchases that I would be making – and paying for – anyway. I figured that I would get enough cash back to pay for at least 6 manicures a year. Speaking of credit cards I’m paying off the remaining balance on the one card that I have this month so that I won’t be paying any interest charges going forward. And I will continue to pay it in full every month, so I’ll get the benefit of the accruing points without paying finance changes.
Every regular bill is on auto-pay so I don’t have to really deal with it.
The little side checking account is the one that I’m going to use for the next few months for spending (groceries and pocket money). I’m going to try to spend no more than $100/week for groceries for my younger daughter and me as well as my spending money (which would include the occasional taking my kids out for meals, movies, dinners out with friends). At one time, $100/week sounded like a lot of money, but, boy it’s not at all.
Thinking about spending (now and in the future):
I’m keeping a log this month of every penny I spend. It’s really helpful to watch the money add up that way. And I’m not debiting anything – it’s all cash. I definitely spend less when it’s real money passing through my hands. I totally recommend that anyone who is trying to cut back or just get a handle on what they spend to get a small weekly planner and write it all down – every penny.
I’m keeping a spreadsheet of all the bills that I’m paying and how I’m paying it (auto pay, credit card, etc.) so I can use it to budget for subsequent months. I also pay some of my mother’s bills and reimburse myself at the end of the month from her money, so I’m tracking that as well. I love seeing it all spelled out – it’s so clear and there’s something about committing to the spreadsheet that keeps it so real.
Finally, I’ve made saving an emergency fund a real priority. I think that being married gave me false security (he never made much money, so what good would he have been?). Now, it’s just me, and that emergency fund is important.
My husband and I spent a lot of money without thinking about it. Regrettably, we ripped through thousands of dollars a year. I’ve made some choices about spending that I probably wouldn’t have made while married:
1. Holiday gifts were very modest this year. My kids aren’t children and they didn’t need to get one gift for each night of Hanukkah. I gave them things that I knew they would love and told them that I thought about them, but weren’t expensive.
2. I think it’s really important to keep up a social life now – more important than before I was separated – but I don’t want that to get out of hand financially. I meet friends at the movies, but we go to a matinee that costs significantly less than at night and go to dinner afterward (rather than eating first and then going to the movie when it’s more expensive). Another benefit to that is that I get home earlier that way, which I prefer now that I’m driving myself around – and because in Chicago it gets dark so early this time of year.
3. I entertain just as much as I did when married, but I’ve gotten really good about delegating. When people ask what they can bring, I’m honest and give a real assignment. I had a large group of friends for brunch and I had people bring juice, bagels, fruit, cooked dishes and cream cheese. Not only did it keep the cost down for me it made it so much easier on me in terms of shopping and prep. Nobody minded bringing things – we just really enjoyed each other’s company.
4. When things are $10.00 for 10 at the grocery store it doesn’t mean that I have to buy 10 of them. I think my husband always did that just because that’s what the sign says. I’ve learned that $10.00 for 10 means that I can buy 3 and pay $3.00. It may be a good deal price wise, but if it takes up too much room or might go bad before I can eat it, it’s not.
5. I’m spending more time reading grocery store ads and thoughtfully putting together a shopping list. It helps that I’m not living with a vegetarian any more so, if turkey’s on sale, I can cook turkey.
6. Soda’s too heavy for me to shlep from the store, so I’ve switched to water or Crystal Light at home. Cheaper, better for you, and easier to carry from the car to the house.
7. I’m having a hard time changing my cooking style to cooking for just one or two people. I still make huge pots of soup and four loaves of bread at a time. I’m learning to be way better about freezing and marking so that I can come home from work, pull the right container out of the fridge and nuke some yummy Chicken Tortilla Soup, for instance.
8. I’m shopping in my pantry. We bought a lot of stuff and never ate it. I’m not sure why that happened. I guess we planned meals a lot but then decided to go out, or just bought the wrong things… Whatever we did, we filled up that pantry and I’m trying to get it eaten. I’ve taken everything out, looked carefully at every box and package, and figured out how to eat it or get rid of it if it was something I didn’t really want.
The bottom line…
I guess it seems like all I do is think about money right now. It’s true that money – not enough of it, specifically – has been a great source of anxiety to me up until now. My husband was, shall we say, somewhat evasive at times about how much we had/owed/spent/earned…
In the midst of a divorce, it feels good to have something that I can control (because there’s so much that’s completely out of my control right now) – and I’m so excited to finally be getting my finances to a good place!
What are your “finances in the midst of divorce” tips?