Managing Your Finances and Looking for Work After Divorce
One friend of ours has refused job after job because she feels the entry-level positions are not commensurate with her age. We have continually suggested she get in touch with reality. While many of her friends from college have been in the workplace for 20 years, she has spent 20 years at home. Her work at home was important, especially to her family, but when it comes to advancement in the workplace, she may have to step back a bit to get her foot in the door. Don't feel you have to take just any job, but be reasonable. It's better to get in the workforce and get some experience under your belt, so you're prepared for that great job when it comes along!
As soon as you're faced with the prospect of going it alone financially, call an accountant or divorce financial expert. An accountant, especially one familiar with your family's financial situation, is in a good position to help you develop a plan to get back on your feet.
If you don't want to go to a professional, you can work to get a handle on financial issues by listing your income, assets, and expenses. (See below for a worksheet to help you.) Then you will know if your current income is adequate, or if you must strive to earn more. Notice that we haven't mentioned putting more debt on your credit card. Adding debt will ultimately lead you into a quagmire. It is better to cut back on unnecessary expenses or increase your income.
Carmen Carrozza, a former bank manager in Chappaqua, New York, has seen many people in the midst of divorce come through the door. The most uncertain are often women whose spouses have been the sole providers while they have been caring for the children. Even though these women worked for a few years before having children, they have been out of the workforce for too long to reenter at the same level, or the work they used to do has changed dramatically.
Looking for Work
You Can Do It!
Before you start looking for a job, make sure you're heading in the right direction. Rank your special interests in such areas as: art, teaching, organizing, cooking, or child-care. Then, if possible, follow these interests as you seek work or build a career. And remember, with adult education courses at your local high school or community college, you should be able to increase your skills and credentials.
If you haven't worked for a number of years, getting back into the workforce will take some time and getting used to. But it can ultimately reward you with far more than financial security. You will begin to feel self-reliant. You will meet new people. And you might even find you are distracted from the problems related to your divorce.
Discover the person you have not yet become. You probably have more resources and talent than you give yourself credit for. To help you identify your natural aptitude, we suggest you list your special interests and abilities in detail. Use the list to help you focus your studies, your job search, and your goals.
Developing a Credit History
For those exiting long-term marriages, finding a means of earning enough money to stand on your own can be the most important first step. Very few people are married to partners so well-off they can expect to receive support payments forever. For those whose husband or wife has “made it,” you may be eligible for permanent financial support, depending on your state's laws. Anyone in this situation should fight for all they are entitled to.
According to Carmen Carrozza, one of the most common concerns for those in the midst of divorce involves building personal credit. The task is far easier, of course, for people who can show they have assets or income, by way of steady support or employment.
Good credit is vital. These days, it seems, we can hardly exist in America unless we pull out a credit card to pay the tab. If you have been working all along, your credit rating will not be affected by your divorce, unless you and your spouse had joint accounts and failed to pay those bills on time, or if you stopped paying them after the divorce was filed. If you have been relying on your spouse's income, on the other hand, you will have to establish your own credit history. Although the prospect seems intimidating, it's not as formidable as it sounds.
First, you must be able to identify your assets, like cash accounts, and your sources of income, including salary, interest, and, of course, maintenance (alimony). Because banks are seeking good credit risks, they will be looking not just at your income, but also at debts, credit history, collateral, and stability (how long you've been living in the same place). There's a formula to this, and it's not mysterious: If your income-to-debt ratio is 30 to 40 percent (you use no more than 30 or 40 percent of your income to your pay mortgage, car loans, and the like), banks will generally consider issuing you a credit card.
If you don't have a viable personal credit history, you can start to build one by shopping at stores that give instant credit; department stores, gas stations, and local stores are all good candidates. Begin by making small purchases on credit, and pay your bills promptly. Then, get a Visa or MasterCard. Pay your debts on these cards right away, too. If you've done things right, you should have your own positive credit history in about a year.
More on: Dealing With Divorce
Excerpted from The Complete Idiot's Guide to Surviving Divorce © 2002 by BookEnds, LLC. All rights reserved including the right of reproduction in whole or in part in any form. Used by arrangement with Alpha Books, a member of Penguin Group (USA) Inc.
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