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Article written by Chris Coulter
After a divorce, your financial picture can look much different than it did prior to divorce. Your expenses may have increased and your sources of income may have become more limited. You are likely responsible for running your own household, whereas you probably shared that responsibility with your former partner before. With more expenses, fewer financial resources and less available time, it’s easy to understand why enjoying a night out is not as easy as it used to be.
While splurging regularly is not recommended, the good news is treating yourself to a night out is possible, but do consider the following points:
1. Know Your Budget and Stay Within It
It’s important to identify all of your fixed expenses and all of your sources of income. Your income needs to be greater than your expenses. If not, you need to rework your expenses so they are less than your income. At the end of this assessment, you will see the net difference between income and expenses, and have a clearer understanding of what money is available for saving or spending.
2. Needs versus Wants
If you’re having difficulty making that expense number come in under your income amount, make a list of what you need, and what you want. Needs represent essential expenses such as housing costs, utilities, car expenses, insurance, and food. Wants represent fluctuating or non-essential expenses like daily lattes, gym memberships, hairstylists, manicures, clothing, entertainment, and buying lunch from a vendor as opposed to bringing a lunch from home. Once you break your monthly expenses into needs and wants, you’ll have the ability to add in those wants that you really don’t want to give up. Remember that those little items can add up to a significant amount when tallied up at the end of the month.
3. Expensive Dinner Out versus Ordering In
It’s all about making choices. Will you get the same benefit of a night out for dinner as you would if you invited friends over for homemade pizza? If the difference will save you $50 or more, then you may want to consider the second option.
4. Look at Ways to Bring in Extra Cash
Do you have a talent that you can monetize? Perhaps you have a flare for creative writing, artistic ability, or are good with tools. Can you turn this into money by working a few extra hours a week? Uber and Airbnb have turned an entire generation into ride-sharing providers and hotel purveyors. That few extra hundred dollars you earn may translate into some of your entertainment budget.
5. Avoid Taking on More Debt
Stay away from attractive offers for new credit cards and “don’t pay a cent for six months” deals unless you have that money earmarked in your bank account. You should try to avoid paying with credit, regardless of how attractive the deal may be. Paying with cash or debit may not seem as attractive, but you’ll appreciate not having to pay that credit card balance that is accompanied by a 20% monthly compounded interest rate (which incidentally, increases your monthly expenses).
6. Today Doesn’t Mean Forever
Although your world may not be perfect today, it doesn’t mean this will be your reality forever. As I like to say to people, present state does not equal future state. Continue to be fiscally responsible, put away money at the end of every month and try to avoid carrying any excessive debt, and you’ll find your financial picture will change. The changes may not happen overnight, but with time, diligence and patience, your financial picture will improve.