While my divorce remains pending several other unsettled items, the one thing that my soon to be ex-spouse and I could agree to was keeping (and paying off) our own debts. However, since there are certain things that remain community debt, I had to draw up a plan to pay off my debts in a year or less, putting me in a position to either refinance my home or pay my home off outright -- the house being the holy grail in the divorce settlement, of course. To do this, however, I had to take a good, hard look at my debts, our debts and how I was going to dig my way out of this pit, clean up my credit and move forward on my own.
Fixing my income problem
The first thing that most people say to me (and something I've said to myself many times) is that it's easier to pay off debt when you have more income. Knowing that my current freelancing income wasn't quite up to par and stable, I took on an additional, traditional job as a sales manager, offering me a base salary plus bonuses. I also started up a side job with a travel company (which I work about one hour per week) to boost my personal income. From these three jobs, I should be able to clear at least $80,000 in 2013, without having to sacrifice time with my children -- in fact, I'm sitting on the couch with them right now -- and I'm going to do it all in primarily residual income.
I plan to use my weekends to finish my book, and self-publish in less than two months from today. After that point, I will be able to collect even more residual income, pushing me up to a comfortable level to pay off every single one of my debts, and potentially even my home in the next year.
You see, as opposed to choosing to trade time for dollars, I am focusing on making myself more profitable.
Fixing my debt problem
After having pulled my credit, I found a heaping pile of discrepancies. I am going to be sifting through each of these both with the credit bureaus and with the creditors over the next year. As I find the debts that are mine and that are valid, I will pay them off or settle them, in order to clean up what I need to on my credit report for good. Right now, I'm looking at about $15,000 in debt that may (or may not) belong to me. Either way, I'm budgeting for the worst case scenario, and planning to dump at least $15,000 into the debt payoff pit.
Fixing my house problem
If my calculations are correct, and I am able to clear more than $80,000 in residual income this year, that means I would only be $20,000 shy of being able to pay off my house, and put me in a perfect position to refinance, if need be, per the final divorce decree.
If there is one thing I've learned in going through my divorce it's that it's important to have a plan, and to be able to have a plan you can implement with ease the year following your divorce. Because forward motion is everything, and living debt free is worth its weight in gold.
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