Going it Alone? 3 Tips to Getting Your Finances in Order After a Breakup or Divorce
In many marriages and live-in relationships, finances are shared. Couples often split up household responsibilities, including the management of these finances. If you're recently out of a marriage or relationship where finances were previously shared, and your significant other was playing the financial guru, you may be finding yourself clueless in the money arena. Or, while you were busy trying to make your relationship work, you may have simply let your finances take a back seat. Instead of hearkening back to your college accounting days, let us help you get control of this crucial aspect of your life.
Tax season is upon us, and now is the perfect time for you to get reacquainted with your finances and get back on track - especially if you're going it alone. Here are 3 steps that will help you get organized and stay organized for April 15th and beyond.
1. Get your finances online.
The web is perhaps your best ally when it comes to getting your finances organized. Not only is it good for the environment by going paperless, but the web can also give you a central location to monitor all of your accounts. The first thing you need to do is go to all of your vendors' (banks, insurance companies, etc.) home pages on the internet and sign up for online access. You will need to have your account information and Social Security number handy. Once you have gained access you should be able to pull up old statements (typically up to 12 months) as well as get access to any important documents that you need to file your taxes. The next step is to sign up for E-Delivery. Why do you keep getting paper statements? Most of us never read anything that is sent to us through snail mail. Don't worry, because you can always print out your year end statement for your records. Lastly, say goodbye to that pile of old statements that's been cluttering your desk for the last 5 months, and remember always to shred anything with your name and account number on it.
2. Create a budget.
Now, we know a lot us instinctively flinch when we here the word "budget," but this is something that everyone should have, whether you are a millionaire or find yourself living paycheck to paycheck. There are several sites that we recommend for creating a budget such as Mint.com, but our favorite is Total View, available on smithbarney.com. Total View is simply a web application that provides a single log-on to all of your online accounts. You can provide a link to your 401k at work, your mortgage statement, or even your Comcast bill. When you get to the application, which is under My Access on smithbarney.com, click on the demo and the software will demonstrate how to link your various web accounts to Total View. Once you have completed the process, Total View actually tracks your investment performance, your net worth, and even your cash flow. Best of all, it is all updated automatically for you! No more tracking monthly purchases through Excel or Quicken. Lastly, under the spending reports section, you have the availability to enter in what you want to spend every month in a certain category such as Restaurants or Travel. If you exceed your goal, Total View will actually email you to alert you of any reckless spending.
3. Organize your hardcopy statements.
Buy yourself a large 3-ring binder. Then, visit my website, located at www.fa.smithbarney.com/jonathanstroebel and under the "Financial Planning Section" download the "Family Records Organizer." Use the pages as tabs to keep your financial records in order. Also, under the "Financial Planning Section is the Document Locator. Fill out this form and hand it to your next of kin so that they know where your important records are in case of an emergency.
Congratulations! Once you have completed these 3 important steps, give yourself a pat on the back, or better yet, take a (small) chunk of your organized finances and treat yourself to something nice. You are now officially on top of your finances - but remember, managing finances responsibly is an ongoing process, so once you're here, you've got to work at it to stay here.
Jonathan Stroebel is a Chartered Retirement Planning Specialist and Financial Adviser with Morgan Stanley Smith Barney. His practice is geared towards helping individuals in financial transition answer two basic questions. Am I going to make it? And are they any gaps in my financial strategy that will prevent me from succeeding? To contact Jonathan Stroebel and learn more about his practice please visit him at www.fa.smithbarney.com/jonathanstroebel.
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