RoxanneWhether the change comes from a separation, divorce, or some other reason, several steps can make the transition easier to manage. This article will explore those steps.
Do Not Panic
While losing a partner can be emotionally draining, losing an income can be financially traumatic. As hard as it may be, it’s vital not to panic. Instead, get a clear picture of the financial situation to see what needs to be done.
Is there any money set aside for emergencies? Count it, as this change in income could easily be considered as such. Will there be any money coming in as a result of the loss? Infusions of cash via alimony, child support, or life insurance payouts should be documented, as well as any others that could help pay the bills.
Get Help from Others
Asking for help from family, friends, coworkers, etc. can provide essential relief when times get tough. If that sounds too uncomfortable to do, ask for assistance by giving something in exchange. Doing work around the house or babysitting are examples.
Reaching out to a personal network could result in a loan or income in exchange for services, but it could also create new job opportunities. For this reason alone, it’s an action worth taking.
Beyond personal contacts, a newly single parent can contact creditors, service providers, and the like to explain their situation. Hardship programs exist to provide financial relief, at least temporarily. Monthly payments can be reduced, due dates can be extended, and more to ease the burden that comes with adjusting to a single income.
If the single parent lacks a personal network to lean on, they can look elsewhere for help.
Find New Income Opportunities
As one provider leaves and takes their income with them, finding new ways to bring in money becomes crucial. The most common way to do so is by working extra hours or getting a second job. But since the single parent may need to take care of children, that may not be a viable option considering high childcare costs.
Luckily, there are several ways to gain extra income by working from home. Freelancing as a writer, virtual assistant, or some other service online is a great way to add a new flow of cash to the household.
There are other ways to bring in extra income besides employment. A garage sale or selling household items like clothes online can bring in cash fast. If there’s a spare car that isn’t being used, it can be sold. Likewise, an extra room in the home that’s not being used can be rented out for the time being.
One overlooked method of adding income is by readjusting current employment. As mentioned, working more hours can increase income, but so can asking for a raise. Lastly, tax withholdings can be adjusted to increase take-home pay. In exchange, the yearly tax refund will be lower, but this solves the issue of bringing in cash quickly to remedy the situation.
Make Budget Adjustments
If a budget was absent when two incomes were present, it will become necessary once one of them disappears. Creating a budget can make it easy to pinpoint unnecessary expenses. If something isn’t a necessity, it should be cut from the budget so that any essentials can be met.
What are some examples of unnecessary expenses? Cable TV is one. Although the single parent may want cable for their children, they could change their plan to one with fewer channels and a lower monthly rate. Gym memberships could be cut as well, opting for in-home exercise that’s free as an alternative.
Necessary expenses could need adjusting too. Utility costs may be high and call for some changes regarding air conditioning, excessive water use, and the like. Cell phone service could be changed to a more affordable plan. Even car insurance changes could yield some much-needed savings. Credit cards are another place to look for instant savings. A quick call to the credit card company could result in a lower interest rate to free up some of the budget.
