Business models can be useful during an uncontested divorce because they help keep the emotions aside and assist you in making more prudent decisions in the long-run. Cash flow rules are a good way to move your uncontested Pennsylvania divorce in a positive direction. Benefits of following cash flow rules include reducing worry and doubt.
1. Never Run Out of Cash
Your lifestyle and your finances are going to change. Once you divorce, you may be moving from a large Philadelphia home to a small Pittsburgh apartment, since you may be transitioning from a two income household to a single income home. In addition, there may be additional expenses during this time, such as having to pay bills that your spouse previously covered. We suggest at least having three months of living expenses as cash on hand. This doesn't mean you have to hide it under the mattress. If you don't have your own private checking account you should get one. This may also be a good time to start building up a good credit history by using your credit card, as long as you pay off the balance in full every month (in order to avoid interest charges).
2. Know Your Cash Balance Six Months From Today
Get started on your budget right away. This includes making a list of assets and debts. Look at your expenses and see where you can trim after your divorce. Do you really need that fancy cable package? A cheaper alternative may be Netflix or getting movies from your local library. Don't wait till you are in crises to figure out your cash flow.
3. Give Every Dollar a Job
Each dollar which you have should be assigned to a task or a "job". This means that you know how each dollar will work for you. The dollar can go to work for you by paying an electric bill to adding an extra five dollars to your child's college fund. Following this rule will save you from many impulse purchases.
4. Live on Last Month's Budget
If you happen to get even an extra ten dollars in your budget don't go and blow it. Put it aside and figure out how it will be best spent to meet your needs and long term goals.
5. Increase Income & Reduce Spending
There are a few ways to get started with generating money after your uncontested Pennsylvania divorce. Look around your house and consider items you no longer use for possible sale. A great place to start is with clothes that your kids have outgrown. Search consignment shops in your area or take out a free add on Craigslist.com to get some quick cash. A word to the wise, don't go selling your spouse's golf clubs or grandmother's antique clock. You don't want to hamper future marital settlement agreement negotiations.
Many couples have been living above their means. An uncontested Pennsylvania divorce can bring this fact quickly into the light. Start taking a serious look at what expenses you can cut back or eliminate. You don't really have to buy your double latte at Starbucks every morning.
Some additional cash flow tips:
- Pay bills on time. Late charges can take a considerable chunk of your money;
- Use your credit card wisely. Remember that you have pay back the money you borrow. Pay the full balance every month to avoid paying interest;
- It may be time to liquidate. This might mean liquidating your home or selling your jewelry or gun collection. Yes you worked hard for them, but in hard economic times, sacrifices must sometimes be made..
If you are having trouble with your budget there are several software packages you may want to look into. Don't forget to look at free software programs first and their reviews. Also, you may want to invest in a financial planner or a divorce coach for assistance.
