Blumenthal - The Wall Street Journal Guide to Starting Fresh: How to Leave Financial Hardships Behind and Take Control of Your Financial Life

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Copyright 2011 by Dow Jones & Company, Inc.

The Wall Street Journal is a registered trademark of Dow Jones and is used by permission.
All rights reserved.

Published in the United States by Crown Business, an imprint of the Crown
Publishing Group, a division of Random House, Inc., New York.
www.crownpublishing.com

CROWN BUSINESS is a trademark and CROWN and the Rising Sun colophon are registered trademarks of Random House, Inc.

Library of Congress Cataloging-in-Publication Data

Blumenthal, Karen.
The Wall Street journal guide to starting fresh : how to leave financial hardships behind and take control of your financial life / Karen Blumenthal.1st ed.
p. cm.
1. Finance, Personal. 2. Debt. I. Wall Street journal. II. Title.
HG179.B56635 2011
332.024dc23 2011023485

eISBN: 978-0-307-58874-6

Jacket illustration Peter Hoey/TheIspot.com

v3.1

T O H ARRIET ,
WHO KNOWS ABOUT FRESH STARTS

APPENDIX
H ELPFUL W EBSITES

tarting over is never easy.

No matter how old you are, major life changes are scary. And it doesnt help matters that some of the scariest changes are ones that also tend to wreak havoc on your finances. This is true whether youve been blindsided by a job loss, youve experienced the death of a spouse, or you have known for some time that the day of reckoning will come, as with bankruptcy or foreclosure or divorce. A million decisions seem to be staring at you all of a sudden, demanding resolution at a time when your emotions are most frayed and vulnerable. You may feel overwhelmed, frightened, confused, or maybe even paralyzed by the enormity of the challenge ahead.

This book seeks to ease that pain and allow you to move forward by helping you get a handle on what you can control: your financial life. You rarely can choose the curveballs that life throws at you or predict the grief or emotional roller coaster that may follow. You cant help the fact that by their very nature, divorce, the death of a spouse, and the loss of a job create financial hardship. But step by step, you can make decisions about your money, your spending, and your debt that can help put you back in control and on the way to building your new financial life.

Taking a slow-and-steady approach, this guide walks you first through the issues that need immediate attention, like where to look for assistance and how to make the best use of a cash influx from a settlement, an inheritance, or a severance check. Youll get a good, clear look at how financial institutions, lenders, and credit bureaus will size you up, as well as an introduction to the new health-insurance law to ensure that you have adequate and appropriate coverage.

Because the specifics of a divorce or bankruptcy are more legal matters than financial, this guide wont advise you on how to divide property or whether a bankruptcy filing is the right decision. But once those wrenching moves are under way, it will try to help you get back on track to recovery.

As you move past the initial adjustment period, this guide addresses thornier questions: How can you adjust your budget to your new situation? Should you move or should you stay? Should you borrow to buy things or pay cash? And what kinds of insurance do you need now?

If you havent borrowed money or applied for a new credit card in a while, youll get up-to-date information on new rules for credit, banking, and mortgages that have been put in place since the 2008 financial crisis. And you will also find concrete and understandable advice for how to best invest and manage your retirement funds under your new circumstances.

Because there is no single way to manage moneyand no one lifestyle that fits everyonethis guide will offer options to identify and set your own personal financial priorities and carry them out in a way that works for you. Not every section may apply to your situation, but there are many areas of financial life that you may not even realize need a fresh look when you are starting over.

If youve been through a significant trauma, you have a lot of healing ahead. Having a grip on your finances can soften the blow and empower you to move forward with confidence in other parts of your life. This book will help you take those first important steps.

s you remake your financial life, heres the first big decision you need to make: decide that you wont make any big financial decisions right away.

Not making decisions may seem as scary as trying to resolve all your problems at once. But if youre hurting or feeling wrung out or emotional, theres a good chance that you wont be making your best decisions right now. And you dont need poor choices compounding the challenges you already have.

You shouldnt have to rush into anything right awayand you should be skeptical of anyone who pushes you to make a big-ticket spending decision. Almost any financial issue that seems to be looming over your head right now will still be there when you are better ready to deal with it in the near future.

Youll make better choices and fare better down the road if you take some time to step back, reflect, assess, and get your bearings. Here are your Fresh Start First Steps.