Dear Mary: I was married for 23 years and recently got divorced. I find myself and my two college-age children living on my paycheck alone, with no other support. What are the top five things I need to be doing to survive month to month yet continue to put some money in savings? -- B.H., e-mail

Dear B.H.: You are in a tough situation. But not impossible. You are a smart, capable woman, and I have confidence in you.

The most difficult thing you must do right away is to release your non-minor children to support themselves. That doesn't mean they cannot live under your roof, but you are not in a position to pay for their board, education, transportation, insurance, cell phones, clothing and so on. You are at a critical crossroads where you must decide whether you are going to care for yourself and your future or get derailed by taking care of others while putting your own financial future at great risk.

That being said, (1) you need to make sure that you are contributing the maximum of $15,500 each year into your employer's 401(k) or 403(b) retirement plan. Once you reach age 50, you can increase that to $20,500 per year, and you should. If your employer does not offer such a plan, you can save for retirement yourself with an IRA.

Next, (2) you need to be saving 10 percent of your net (take-home) paycheck in an emergency fund that you keep in a savings account. You need at least $10,000 in this contingency fund. This is absolutely critical, as you are now solely responsible for your financial support.

Starting today, (3) as much as possible, put yourself on a cash diet. You cannot mail cash to pay your bills, but as far as your day-to-day spending for gas, food and so on, pay with currency.

Get a small notebook because (4) you must start recording all of your spending -- every nickel. You have to see where the money goes so you can begin to plug those spending leaks. You cannot afford to let money slip unnoticed from your life.

Stop using your credit cards until you (5) pay off all of your credit card debts. My Rapid Debt-Repayment Plan will help you create a quick payoff plan you can follow. You can see a demo of the RDRP at DebtProofLiving.com.

You need (6) an additional account where you are saving a little every payday for your next car, upcoming auto maintenance and repairs, and other irregular expenses you will have from time to time. I call this account your Freedom Account.

There you go -- five things you need to be doing plus a bonus.

Watch your mailbox because I am sending you a one-year membership to Debt-Proof Living Online. Make sure you read the April 2008 issue of the newsletter (it is a membership benefit), especially "Retirement Investing."

But wait, there's more! I'm also sending you a copy of my brand-new book, the expanded and revised "The Financially Confident Woman." In addition to the fundamental financial information every woman needs to know, I take the opportunity to share my faith. I hope you enjoy it.

Do you have a question for Mary? E-mail her at mary@everydaycheapskate.com, or write to Everyday Cheapskate, P.O. Box 2135, Paramount, CA 90723. Mary Hunt is the founder of DebtProofLiving.com and author of 17 books, including "Debt-Proof Living." To find out more about Mary and read her past columns, please visit the Creators Syndicate Web page at www.creators.com.
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