Dear Kim,
I’ve been divorced for over two years now, after 21 years of marriage. It took me the first year after divorce to realize that I was finally free from my former husband’s controlling tendencies. I feel like I’m a new person with brand new opportunities in life for travel and experiences, but I also want to make wise decisions about my financial future. How can I best balance living my life and also protecting my future?
Sincerely,
Balancing Freedom with Finances
Dear Balancing Freedom with Finances,
There really is life after divorce, and it takes most people 6 months or a year to come to terms with that. Congratulations on making it this far. Your question could be answered in several ways, but if you read this column, you know my answers always begin with a spending plan. Have you figured out your income vs outgo, and know how much money you have left over at the end of the month? I always recommend paying into your savings and retirement accounts first, and living off the remainder. Do you know when you want to retire, and how much you have accumulated toward that end? When you say ‘living your life’, what does that entail? Are you wanting to take trips, go out to dinner with friends…? Identifying what that looks like is a good starting place so you understand what kind of money you need to set aside for those purposes. It is a balancing act, but it all begins with a plan. The most frequent question I get asked is ‘How much money do I need to save to retire?’ There isn’t one answer to that question…it all comes down to what are your plans? How much does it take to balance your budget each month? How much extra do you need to be able to live the life you want to live?
Again, congratulations on coming out the other side of your divorce, and I wish you a happy, fulfilled life going forward.
Kim
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