Financial Planning

Leaving an abusive situation is not only difficult emotionally, but can also be challenging financially. Here are some tips for surviving on a smaller budget and getting back on your feet.

Steps for surviving money crisis

  1. Change your expectations
  2. Tell yourself the truth
  3. Decide how to pay for necessities
  4. Identify your assets
  5. Discover how much you cost
  6. Calculate what you can afford to cost
  7. Call your creditors
  8. Quit paying late fees
  9. Create a budget
  10. Do Not ignore the IRS or INS

Budgeting – Create a budget and stick with it! Figure out how much money you have to spend each month, and how much your living expenses cost. Don’t forget to set aside some money for unexpected expenses such as appliance or car repairs.

Developing Goals – Develop financial goals for yourself. Think about where you want to be financially in the next six months, or year. Take the necessary steps to achieve those goals such as picking up extra hours at work, or cutting down on unnecessary expenses.

Keep Financial Records in a Safe and Confidential Place – Your records are your business. Keep them in a place only you have access to, such as a safe or lock box. Oftentimes it is good to be sure the box is fire and/or waterproof.

Debt Management – Save before you borrow. The only time you should charge to a credit card is when it is an amount you could also pay for in cash. This is important to remember when trying to build good credit and get out of debt. Look at charging as buying money. You want the best rate, but you want to buy as little as possible.

Prevent Identity Theft – Many times abusers will try to use old account numbers and pins. Be sure to change your pins and shred receipts that show any account information. Be cautious on the phone. Never give out too much personal information. You don’t really know who is on the other end of the line

Tax Information

By requesting innocent spouse relief, you can be relieved of responsibility for paying tax interest, and penalties if your spouse (or former spouse) improperly reported items or omitted items on your tax return.

You must meet all of the following conditions to qualify for innocent spouse relief:

  • You filed a joint return
  • There is an understated tax on the return that is due to erroneous items of your spouse
  • You can show that when you signed the joint return you did not know and had no reason to know that the understated tax existed (or the extent to which the understated tax existed).
  • Taking into account all the facts and circumstances, it would be unfair to hold you liable for the understated tax

Rights and Responsibilities

You have the right to:

  • File a separate return even if you’re married
  • See and understand the entire tax return (including supporting documents) before signing a joint return
  • Refuse to sign a joint return
  • Request an automatic 6-month extension of time to file your tax return
  • Get copies of prior years’ tax returns from the IRS
  • Request relief from your spouse’s liability
  • Obtain independent legal advice

Building Good Credit

Here are 5 tips for building good credit:

  1. Charge only what you can afford to pay – this helps you avoid excessive debt and shows creditors that you are a responsible borrower.
  2. Use only small amounts of the credit you have – maxing out credit cards – or even coming close – is one of the most irresponsible ways to use credit.
  3. Start with one credit card – the more credit you have the more you end up using so start with one card at a time.
  4. Pay your balance in full and on time – a large part of your credit score includes timeliness of payments. The sooner you pay the better your score.
  5. Carry a balance the right way – having a balance isn’t always a bad thing. Just be sure to make more than the minimum payments in order to pay your debt off quickly.