Life can take unexpected turns, and one such curveball is divorce. Transitioning from a shared life to living independently can be daunting, especially when considering the financial implications. Recent studies are calling it the “Single Tax”, showing that on average, a single person pays $7,000 more in rent compared to their cohabitating peers.
Affording to live on your own after divorce takes strategic planning, but is absolutely doable. The journey might seem like scaling a massive mountain, but with the right strategies, you can not only afford to live on your own after divorce but also build a secure financial future. In this blog, we’ll explore practical steps to help you regain your financial footing and thrive as a single individual, regardless of whether you have children or not.
In American culture, the emphasis on individualism and self-reliance has shaped a distinct approach to living alone, particularly after divorce. The concept of starting anew after divorce aligns with this narrative, as Americans tend to prioritize building self-sufficient lives. In contrast, many other cultures around the world place a stronger emphasis on community and familial bonds. Support systems often play a central role in navigating life changes, including divorce, and living alone might be less emphasized.
My point? If this feels difficult, it’s because it is. Don’t be afraid to ask for help and let yourself lean on others while you navigate this transition. You can do this, but having community offer a kind shoulder along the way isn’t a negative reflection on your ability to handle life.
That being said, let’s get you in the best financial situation possible as you begin to dream up your future goals and plans!
In this blog:
- 9 Tips to Afford Living on Your Own
Tips to Afford Living on Your Own
1. Craft a Purposeful Budget
For many people, “budget” can be a trigger word. If you weren’t living on a budget beforehand, this is a great time to start. Before you start feeling down about budgeting, I want to help redefine what that means for you. Budgeting is about ensuring your money is going toward the things you value most.
When you have a budget, you can actually track how much of your money is going towards the things that don’t actually make your life better, and how much of your money would be going towards your greater goals. Meaning, if a $5 coffee on your way to the office every morning IS something that makes your mornings exponentially better, let’s keep that in the budget and find somewhere else you don’t mind reallocating the money from.
When I first started keeping a budget, I recognized that I was spending more than I was comfortable on drinks out. I always justified it as “socializing is important”, but I realized that if I was a bit more strategic about my spending, I could afford to do things with friends that really did matter to me. Now, me and a group of my besties all have memberships at a climbing gym and I feel so much better about how I am spending my time and money.
We have tons of resources on crafting a budget in our free guide here.
2. Invest in Your Healing
Emotional healing is the foundation of financial success. If you are currently worried about simply paying your bills, I understand that this might have to wait a bit. However, I know I am guilty of putting off investing in my mental health until I reached xyz, but I failed to realize that investing in my mental health was what was going to help propel me into those future goals. And as the Guns ‘N Roses drummer famously said, without our health, we have nothing.
Emotional well-being enhances decision-making and resilience, indirectly contributing to better financial outcomes and a generally better quality of life. Investing in your mental health pays dividends for all aspects of your life.
3. Start Investing
If you are newly single, you need to know that you are the one responsible for your financial success. This has actually always been the case. Why? Because no one is ever going to care as much about your financial future as you do. This might sound a little blunt, but I actually mean it as an encouragement! Because if you are the responsible party, then that means you have a lot of control over what your financial future looks like.
Learning to invest is the bread and butter of building wealth, and it’s also the Clo Bare specialty. There is a free live class you can sign up for here.
There are tons of investing opportunities, but if you are just starting out, it could be worth investigating low-risk options like index funds or mutual funds. Diversifying your investments can help your money grow over time. Investing is a great way to build wealth over time and can help you afford your dream home, no matter who you are living with.
4. Explore Spousal and Child Support Options
Depending on your situation, you might be entitled to spousal and/or child support options. Familiarize yourself with the laws governing support in your area. If eligible, pursue these options to help stabilize your finances as you transition to living alone. Legal entitlements can provide a crucial lifeline during the transition to single living.
5. Boost Your Income
This one might seem obvious, but it’s also one of the best ways to help you gain financial freedom. There are lots of different paths to take to increase your income, but personally, I think it’s best to start by increasing your income in your 9-5. Maybe this looks like going for a promotion, or it might mean doing a career pivot and transition. I know I was never personally told to think about the potential earning of my chosen career when I was 18 and starting college, which meant when I was 25 and inching close to the top of my income potential already, I knew I needed to make a change.
If you absolutely love your job and want to stay right where you are, it could be time to think about a side hustle. Check out these side hustles to help get inspired. While side hustles can be a great way to supplement your income, they often aren’t sustainable for years on end. If you choose to go the side hustle route, I would recommend setting goals about how long you wish to have the side hustle, how much you hope to make from it, and if you want it to eventually become your full-time job.
If you aren’t sure about what is next for you in your career, hiring a career coach might be a great option. Similarly to investing in your mental health, it might feel counterproductive to spend money to make money, but that old saying can really be true! If you need to make a career transition and aren’t sure where to go, there are experts who help people just like you every single day score life-changing opportunities.
There is a great podcast episode with a career coach you can listen to here.
6. Choose the Right Housing Option
Housing is often one of the biggest (if not the biggest) monthly expenses a person can have. If you are wondering how to afford to live alone after divorce, it’s important to make the big choices right. Often when people are starting to budget, they look at the small expenses first: are they buying coffee out? Should they cancel Spotify Premium? And while those things can be helpful, they won’t make nearly as much of a difference as your housing and transportation costs.
Downsizing, sharing accommodations, or moving all might be great options for you. Having a community around you can be emotionally and mentally beneficial as you navigate this big life change, so having good roommates might even be the best choice, even if you can afford to live alone.
While you are making these big life decisions, this could be a good time to ask yourself if this is the city you want to live in. Did you end up here because of your ex’s family or work? Did you stay in your hometown because that’s where you both were from? If you have always wanted to try living somewhere else, this could be a good opportunity to explore those options, and depending on where you move, the cost of living could be more affordable.
7. Study Up
Equipping yourself with financial knowledge will help you in every area of your life. But if finances are a stressor for you, there is no better time to study up on your financial literacy. I know I used to feel really overwhelmed when it came to “financial literacy”. It caused instant flashbacks to math class when I was asked to show my work in front of the whole class. But luckily, there are resources available that have made financial literacy accessible, fun, and empowering. In fact, you are improving your financial literacy right now, just by reading this blog!
If you want some other easy resources to help integrate financial literacy into your life, check out this free guide.
8. Prioritize Your Emergency Fund
You are taking control of your financial future and a big piece of that pie is securing an emergency fund. For a single household income, you should work toward saving 6 months of your necessary expenses. Remember that budget we talked about earlier? That will help you tally up the total of your necessary expenses. You can slowly put aside your emergency savings each week, and once you reach your goal, do not touch it unless it’s an emergency.
If you look at your budget and you don’t feel comfortable with how long it will take you to save up a full emergency fund, this might be a great time to lean on a side hustle to help speed the process along.
There are more resources to help you with emergency fund planning in this free guide.
9. Have You Met an HYSA?
High-yield savings accounts are the quickest finance hack I can think of. A high-yield savings account is like a regular savings account but with increased interest rates. Normally, high-interset rates are sort of a bummer, but not with High-Yield Savings Accounts. Why? Because you are the one being paid the interest. It takes all of 7 minutes to set up an account and there are virtually no cons.
You can read more about High-Yield Savings Accounts here. Important things to look for when you are choosing a High-Yield Savings Account include:
- The ability to withdraw whenever you need to, as many times as you need to
- Savings buckets
- Competitive interest rates
While the prospect of living on your own after divorce might seem overwhelming, remember that you have the strength and capability to take control of your financial journey. By crafting a purposeful budget, investing in your future through your mental health, career goals, and financial literacy, finding smart housing solutions, and making smart financial moves like building an emergency fund and putting your savings in a HYSA, you’re laying the groundwork for a financially independent future. Embrace these steps with determination, and you’ll navigate this new chapter with resilience and success.
If you are ready to change your financial future, there is a free live class on investing with a Q&A.
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