Money Mistakes for Newly Singles

Money Mistakes for Newly Singles

Have you recently separated from your significant other and now at a lost with your money and expenses? Often times bank accounts are in a precarious position when someone is newly single. But not always, of course.

You might emerge from a breakup or divorce feeling liberated and self-assured and wondering why you stayed in the relationship so long – and not find yourself anywhere near the throes of money trouble. But when you’ve come through a nasty breakup or divorce, or you’ve lost a loved one to death and are immersed in grief, you’re at your most vulnerable, and if you’re not careful, so is your bank account.

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It might sound petty to worry about money at a time like this. But if your emotions are in turmoil, you don’t want to make things worse. So if you are newly single and unhappy about it, keep in mind that this is the time to be overly cautious when it comes to money. If you aren’t alert, a lot of things can go wrong.

You may overspend. 

If you’re reeling from a breakup, impulse shopping is something you’ll want to avoid. Still, overspending doesn’t have to mean going on a shopping spree, says Russ Thornton, a financial advisor in Atlanta. He points out that if your income wasn’t exactly robust, and you were splitting expenses with a significant other, and now you’re paying for everything on your own, that may still be a form of overspending.

Rebecca Schreiber, a certified financial planner in the District of Columbia, agrees. “The biggest money mistake people make when they are newly single is that they continue to live the same lifestyle they did before on a dual income,” she says.

Even worse is spending more than you did on a dual income, Schreiber adds, observing that many people treat themselves to lavish gifts after the loss of a relationship to make themselves feel better.

If you do that, she says, “spending and debt increases exactly when income decreases. So watch that spending carefully.”

You may fail to revamp your budget.

If you were married or living together, and now you’re not, you have many financial corners of your life to look at, far beyond rent and utilities.

“If it’s a divorce, be sure to know all of the assets in the family and which ones you’re going to be able to access, such as cars, 401(k) accounts, investments and other assets,” says Michael Meese, a retired U.S. Army brigadier general and chief operating officer of the American Armed Forces Mutual Aid Association, a Fort Myer, Virginia-based nonprofit that provides life insurance and other financial solutions to the military community.

“If it’s a spouse who dies, make sure you know what you have in terms of insurance, annuity payments, pensions and health care provisions that carry on from married life to newly single life,” Meese says.

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You may make rash decisions.

Almost every choice anyone makes can be potentially expensive, as you know if you’ve gone to the grocery store without a shopping list or bought a pet on the spur of the moment without thinking about veterinary bills and pet food. But you really want to be careful when you’re angry or devastated over the loss of a relationship. You may not be thinking clearly.

For instance, Warren Ward, a certified financial planner in Columbus, Indiana, says he’s seen people rush into another relationship, and even marriage, after a painful breakup, which, he cautions, can cost you plenty if you wind up divorcing again.

And you certainly want to be careful when you’re making decisions that directly relate to money.

“The first thing to remember, especially for those who have suddenly lost a loved one, is to take time and don’t make any hasty decisions for long-term financial investments,” Meese says.

Meese suggests deferring all major financial decisions for six months, allowing (hopefully) enough time to gain a clearer picture of what life will be like now that you’re single.

You may shut down.

It’s easy to do when you’re stressed or depressed over losing a relationship. Obviously, if you’re extremely depressed, hopefully you will consider finding a therapist or counselor or doctor to talk to.

“When I was first divorced, I was overwhelmed. I had never managed the checkbook in my marriage,” says Carol Charron, an entrepreneur in Grand Haven, Michigan, who says she was also depressed.

“This led to a lot of mail going unopened and denial about paying bills. I had a good job; I was just having a hard time doing it all. I was working full time, and I had three sons to take care of when my marriage ended,” she says.

Charron eventually started seeing her finances and mindset improve after she took a financial management class at her church. “In a span of three months, I paid down almost $3,500 in debt I was carrying,” she says. “It was an important step as a single parent.”

Whether you’re sad or seething, you owe it to yourself to be careful with your money and avoid purchasing a future of debt and despair.

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Photo credit: US News. 

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