I Was Divorced, a Single Mom & Had $7K of Debt: How I Rebuilt My Life

True Confession: As a money coach, I’ve struggled with my own issues around money. (Gasp!) Never was it more painful for me than after my divorce. As with many hard lessons, I was able to grow from this experience and pass on my learnings to clients. But I’ve never shared this story. I think that until now, five years later, it was simply too hard of a story for me to tell.

So after some thoughtful reflection, I decided it was time to finally share the real story of where I was only a few short years ago. I offer it here so you know that you are not alone. And if I can survive and thrive, you can too.

So, let’s go back five years…

Looking Back

I awoke with a start, temporarily forgetting where I was. Then it all flooded back to me. With the ink on the divorce papers not yet dry, I had taken my 9-year-old son and found refuge in my mother’s home.

Everything was gone – everything. I was 39 years old, suddenly a single mother, and I had nothing. I had no house, decimated retirement accounts, no savings, and I was $7,000 in debt. There was no divorce settlement coming my way.

I felt like a refugee, still in shock, with my belongings in boxes on the floor of the room I had last inhabited in high school. The shadows of my old teenage music posters seemed to taunt me from the walls. Sadness washed over me, mixed with anger at a future that felt suddenly ripped away. And I felt a cold, stomach-clenching fear at the daunting prospect of rebuilding my financial life from nearly nothing, at almost 40.

I thought of my young son. Down the hall he slept in a small, hastily cleaned out room. He needed a stable home, a yard to play in, and a mom who wasn’t overwhelmed. This was all like a bad time warp, or just a very bad dream that I would surely wake up from soon.

I laid back and cried.

Later, when my mind calmed, I assessed the situation and thought about what I did have. Beyond the shame of being a money coach who currently had no money and a negative net worth, I did have skills that I could use. Though divorce had robbed me of so much, I knew I was good with managing my money – if I had any. And while my emotions felt out of control in this tsunami of change, I was equipped to avoid overspending, and plan where I needed my money to go.

And the thought of being a paid boarder living with her mother for the rest of her adult life depressed me… so I needed to move quickly.

In my professional life, I had written about “underearning” and how women undersold themselves. And I had taught countless people how to heal their spending issues. And now that it was all up to me, it was time to put my knowledge to the ultimate test. This was no longer an academic subject – I was literally living in a bedroom. I had to step into financial success in a big way.

Creating a Plan

To start with, I created an annual income and spending plan for my new single life. Basically, this was an annual budget. I was living with my mom and did pay rent to her, but my expenses were pretty low. Even so, I wanted to bring my expenses down lower so I could pay off my credit card debt and build up a down payment to buy a house. I needed to see what I could and could not spend, and how much money I needed.

To actually pull this off, I knew I needed to be diligent. I made sure that I sat down each and every month to create a unique spending plan for the coming weeks (as each month was different). No excuses. This helped ensure my spending was where I wanted it (low!). I used this time to plan each month’s savings and debt payments, too.

Tracking

I tracked my actual spending weekly so I could monitor my monthly plan and adjust it as needed. And I could see how I was tracking on my “big picture” annual plan. Not surprisingly, I found that when I tracked my spending, my impulse buying went way down.

Reducing Spending

I had some very ambitious goals set for myself in that year. In order to reach them, I realized I’d have to get creative about my spending. Meeting my goals was incredibly important to me, and I knew I could do anything temporarily, so I made some pretty significant changes.

First, I decided I would “shop in my own closet” for all but essentials, to reduce the amount I was spending on clothes. I asked some girlfriends to come over and help me put new outfits together. It was actually fun, having them go through my clothes and combine things in different ways. (With wine, of course.)

Next, I cut back on dinners out. I still wanted to have fun, so my friends and I started hosting appetizer parties instead of going out to eat. And when it was my turn to host, we enjoyed my mom’s fabulous living room. Good friends are good friends and, lucky for me, everyone adores my mom.

Lastly (and probably the biggest sacrifice for me personally) I decided to color my own hair for the year.

At the end of each month, I updated my debt and savings balances so I could really see my progress. Looking at the numbers every month was a huge incentive for me, since I really hate coloring my own hair.

Increasing Income

On top of all of this planning and saving money, I found that I seriously had to increase my income.

Why? I had to pay off that $7,000 in credit card debt. This debt had been generated during the divorce process, and I knew my debt-to-income ratio would have to come down if I stood a chance at securing a mortgage. (Using a high percentage of your available credit can have a negative impact on your credit score, which is a major mortgage factor. There are many ways to get your credit scores for free — including through Credit.com — to see how your debt is affecting your credit scores.)

Plus, I couldn’t afford to service debt in addition to taking on a house payment. And, even though I knew I would be buying a pretty small house, I needed a down payment. I knew I could get a first-time homebuyer’s loan (my ex-husband and I had always rented), which comes with a smaller down payment, but I’d still need about $15,000.

To bring my income up, I took these three steps:

I sent an email to all my colleagues and clients telling them I had room for three new clients. And I also increased my visibility by sending out a newsletter every two weeks with a new article I wrote.
I raised my fees by 15%. It was high time I raised them anyway (a good rule of thumb is to raise your fees every two years).
I tightened my cancellation policy so I would not lose money due to empty spots.

Mental Focus

With all this work, and really trying hard to stay visible for marketing reasons, my anxiety and stress increased. I had to find ways to increase my self-care so I could stay focused and on track, but they had to be items that cost me little to no money. That year I took a lot of bubble baths and hiked often with friends.

I also read a lot of money books so I could dive deep into the metaphysics of money. I found that I had been underselling myself in various ways, so I improved my negotiation skills. I realized I was operating under a whole host of beliefs that had kept me from taking my income to the next level. (Like the belief that I didn’t deserve to make a lot of money or that if I charged more, people would think I was greedy.)

Results

It took four months to pay off the credit card debt. Then in the fifth month, I took the same amount I was paying on the credit card, and rolled it into a money market account where I power-saved up the down payment.

In one year I had accomplished my goals: I paid off the debt, and saved enough for a down payment on my very own home. Then I found and bought a house! I even restarted my retirement accounts. Yes, I did this in one year.

This was also the year I crossed the threshold of becoming a six-figure woman.

Moving Day

Exactly 12 months after waking up in my old high school bedroom, my son and I rode in the front of a moving truck, leading the crew to this new home that I bought on my own – with no husband and no money from anyone else.

I will never forget the day we moved in. My son ran around the rooms in delight, loudly proclaiming that his bedroom was his new castle. I lay on the floor of my empty living room and looked up at the trees that grew on the property I now owned. I felt like I had a personal, beautiful forest. I lay there for a long time watching the wind move through the branches. I felt in control of my life and my future. A deep sense of peace and calm spread through me.

It’s now five years later. I have rebuilt my retirement to where it was before my divorce. And I love my home as only a woman can – a nest that heals and provides me a retreat from the world. Next month, I am breaking ground on a major remodel. And next year I have plans to build a second home for rental income. Life is very good.