Scott Pape: A single pregnant woman suddenly faces financial challenges

A PREGNANT woman left by her husband needs to take urgent action to get funds for herself and her children, writes Barefoot Investor.

A pregnant woman, now without husband, is feeling the stress.

A PREGNANT woman left by her husband needs to take urgent action to get funds for herself and her children.

KATE ASKS: My husband left me two months ago. I am 24 weeks pregnant with our third child. Since having our first child five years ago, I have been on maternity leave, doing home duties and working one day a week, as it was agreed I would stay home while he worked. Now he is gone and I have all the bills to pay. He is not paying child support as yet, so I am reliant on my Centrelink payments and one day of work. I am a smart woman who just wants a financially secure future for myself and my children. Maybe it is just “baby brain” but I honestly do not know where to start.

BAREFOOT REPLIES: I can’t imagine the stress you’re under. Given you’re nearing the final trimester, you need to focus on just a couple of things: close off your joint bank accounts and credit cards, and apply for a child support assessment with the Department of Human Services to see how much your ex-husband needs to pay you. Then, seek legal advice immediately.

WORK THAT JACKPOT

MIKE ASKS: Recently, I was lucky enough to win $250,000 on a game show! Since winning, I have paid off a loan I owed my dad and put the rest into our mortgage — the house is valued at $320,000. I have just bought a new car and paid for it out of my home loan. The balance is now $95,000. We intend to start a family inside the next 12 months and are scouting for investment properties (we earn $110,000 combined). I am very excited but also confused about whether buying another property is wise at this point in our lives.

BAREFOOT REPLIES: Congratulations for winning Family Feud and killing Channel 10 (just kidding). If I were in your shoes, and planning a family within 12 months, I’d focus on three things: First, boost your pre-tax super contributions to 15 per cent of your gross income. Second, save up three months of living expenses in a Mojo account. Third, take a baseball bat to your mortgage. If you can be debt free by the time your first kid goes to school, you’ll have dramatically less Family Feuds.

IT’S DECISION TIME

GEMMA WRITES: I am 28 and earning $70,000 a year. I am also $10,000 in debt because I did something I said I would never do: took out a personal loan. I have been desperately trying to pay it off, but it seems with every fortnight’s pay something comes up — my car needed servicing, my bed broke, and now I have to buy an expensive bridesmaid’s dress. I feel overwhelmed, like I am never going to get out of debt.

BAREFOOT REPLIES: You haven’t actually asked me a question, so I can only assume you are wanting me to: a) Listen empathetically as you vent about your first-world problems, while I gently stroke your hair and whisper “it’ll be okay, honey”. Or, b) Give you a kick up the backside. I’m going with option B. You say you’re “desperately” trying to get out of debt, but I’m calling your bulldust. Make a freaking decision! You’re either totally committed to getting out of debt, or you’re not. It’s this indecision that’s causing your being overwhelmed. Once you’ve made the decision that you absolutely, positively will get out of debt, the rest is a cakewalk. If your bed breaks (not a bad problem to have in your 20s, by the way!), all you do is lay the mattress on the floor until you can afford to buy a new one. Simple! If you’re asked to be a bridesmaid, you tell the bride that you can’t afford it. Or tell her that it’s such an honour that you’ve decided to work overtime for the next 12 weeks to pay for it (and make your additional extra debt repayments). Here’s the thing that no one tells you about getting out of debt: it’ll build a confidence in you that will change the course of your life. Just ask Chris (below).

WILLPOWER PAYS OFF

CHRIS WRITES: I spent my 20s telling myself I could never afford to own a home, so I just spent my money. Then I started reading your stuff. When I saw that even singles on the minimum wage could make a go of it, I kicked myself in the backside. I got a better job where I could put in heaps of overtime, I sold my car, and I set about paying off my personal loans (plural, because I was still paying for the car, too!). I stopped using drugs (all of them, massive effort) and I saved. I found a sense of self-worth, pride and confidence. I met an amazing woman, and we bought a house together. We have a small mortgage on a beautiful home, and no other debt. We own shares (something else I thought was beyond my reach) and we have cash in the bank. We will pay our home off just after my 45th birthday — I am 33 now. We got married two months ago, we have been on holidays together (I never had money to travel before) and now I am moving into a new career over a period of a couple of years because it is time to spend my days doing something I enjoy rather than something that pays me enough to survive. And all this in just under five years, with so much time left to achieve more. Thanks mate, you changed my life.

BAREFOOT REPLIES: I didn’t do anything. That’s what happens when you give up your excuses, and fully commit. Well done!

Read more:

Six steps to ruin your financial life

Prepare right now for interest rates to rise at some stage

barefootinvestor.com

The Barefoot Investor holds an Australian Financial Services Licence (302081). This is general advice only. It should not replace individual, independent, personal financial advice