I am a divorced woman with three children. I have been working toward obtaining a college degree, and I work two part-time jobs — but my hours have been cut significantly. I have one credit card from my marriage that went into default, and I am paying the $19,000 balance to a collection agency. I have been underpaid by my ex-husband for a year and suffer because he was unemployed at the time of divorce. He now earns a normal salary. However, he keeps taking me to court to try to get out of paying me and to try to gain custody of our children. My parents have helped me financially with all of this, but they are nearly out of money. I am forced to live in an expensive town because I share custody of my two youngest kids. Help! I want to be able to budget and stop the bleed! — Jane
Looks like you’ve got a classic case of the mountain syndrome. When so many issues are piled on top of each other, dealing with it all at once feels insurmountable. So here are each of the problems you’re facing, broken down into six separate topics — and how I think you should approach them.
1. Work. The jobs you currently have are not providing you with the income and security you really need right now, so concentrate on getting one full-time position. Easier said than done? Absolutely. But a steady stream of cash that is enough to pay your bills is essential, so make it an absolute priority.
2. School. If at all possible, stay on track with your college degree. Working and taking care of the children may cause you to slow the pace a little, but don’t give up entirely. You must consider your long-term goals, happiness and financial health. Sacrifice now, instead of later.
3. Child support. I know how bad a battle for child support can be. Some exes will fight every step of the way. That said, the kids need and deserve the money, so get good legal counsel and use it sparingly. Obtain as much free advice as you can on your own (divorce support groups abound, as do free legal clinics and excellent books on the topic) to save yourself some cash along the way.
4. Parents. Stop leaning on your parents for financial support. It sounds like they don’t have much to spare, and if they’re elderly, tapping into their limited savings is not fair. You asked about a budget and this is just what you need to live within your means: List your income and subtract all of your expenses. If you don’t come out at least even, eliminate all unnecessary expenditures. That might include downsizing to a less expensive home, even though you say you can’t. Sometimes, you have to make painful decisions. If you need help, book an appointment with a nonprofit credit counseling agency. They’ll work with you to put together a livable spending plan, for free.
5. Debt. $19,000 is no small sum. Typically, third-party collectors don’t allow people to make installment payments for very long. If this is the case, and you’re repaying the balance over the course of a few months, it will be all over soon. When you’re in the clear, those payments will return to your budget, loosening it up a lot.
6. Kids. Talk to your children about your financial situation … delicately. They need to know that you’re doing everything possible to make things right and that they will be OK. Trust me, when kids are in the dark about money problems, they tend to think the worst. Now is the time to teach resilience and independence via both words and actions.
I really want you to get over this mountain, not be crushed by it, Jane. So climb — step-by-step.