2012 Retrospective #1 (finances)

I’m planning to do a series of reflective posts about last year.  It was a big year for me, primarily because it was my first full year being divorced.  What that meant for me was that it was my first full year on my own, where I was financially and physically responsible for myself and my kids.

That’s a lot to grapple with.

Perhaps the biggest challenge of being on my own was managing my own finances.  First, I set up a rough budget and tried to live with that, being careful of my spending.  I was fortunate to find a very affordable home for our family, which made living within my means easier than I’d feared it would be.  There were many financial unknowns on the horizon for our family and I also had to pay full tuition for my last few quarters of my PhD program, so I had to be quite careful with my spending.  I found that the (free!) mint.com software helped me to keep tabs on all of my accounts, debts, and assets quite easily.

The next step was that I anticipated how much I would owe the government and adjusted my tax withholding accordingly (and was so close in my gu-esstimation that I owed less than $200).  I then filed my taxes on my own (with a wee bit of help from TurboTax), which was a bit complicated because of divorce-related entanglements, but I managed to figure it out and also, several months later, I managed to convince the IRS not to audit me when they questioned my status as Head-of-Household(!).

My employer offers free retirement consultations, so I set up an appointment to ensure that I was taking full advantage of my employer’s matching contributions, and also to discuss how much additional money I should be putting away each month.  While I could definitely be doing better in my long-term savings, I saw a significant increase in my retirement account this past year (it more than quadrupled), so I feel satisfied with my efforts in that arena.

Overall, while there were some facets of my finances that still warrant improvement, I’m calling 2012 a success.  I sat down and crunched some numbers a few days ago and realized that I began the year with a negative net worth, and am ending it in the black–and all of this while supporting my kiddos well (and even paying for my son’s first semester at a private college).  Whew.

I know, all too well, what it’s like to not have paycheck-enough to stretch to the end of the month.  I know, too, how careful I still have to be with my finances so I can keep my bills paid and not feel stressed by those expensive emergencies that crop up now and then.  Also, I recognize just how precarious my own financial stability is in today’s economy.  But…even as I realize that, it’s a good feeling to mark 2012 as being the year that I established a strong foundation for my future financial security (and for that of my children, too).

Photo of my daughter, when she was about 3 or 4 years old.