Divorce is hard, and can be very daunting. One of the reasons why people find it so hard is because they are thrown into a financial and practical state of being single again, when for the length of the relationship they became used to being in a couple.
Many people facing separation, unfortunately most commonly women, haven’t had to worry about their finances for a while. Their partner may have taken care of the bills, the debts, the savings and anything else.
There are two main thoughts that pop into your head when facing with divorce or separation:
- How do I manage my own finances?
- How can I survive and look after my family on a single income again?
This article has some tips for how to face your fears and regain your financial empowerment even in divorce.
With these tips, you’ll be able to take some positive steps towards feeling financially empowered moving forward as a single person.
10 Tips for Feeling Financially Empowered in Divorce
- Don’t be scared
Facing your finances is one of those things that always seems so much worse than it actually is. In your mind, you may have built this up to be something incredibly difficult. It isn’t, and you don’t need to hide from it.
Be kind to yourself but be firm as well as confident – tell yourself that you have got this!
- You are in control now
Being part of a couple meant that you didn’t have to take sole responsibility for your finances. Now you will. You will have to be the one who takes care how money comes in and goes out. You will be responsible for setting and sticking to the budget.
You may have less income coming in, and you are now the one managing all of your bills and expenses, which may not reduce by the same amount as your income does.
- Take it step by step
Break things down to one step at a time, because it’s when we look at all of the tasks facing us at once that we become overwhelmed. Make a list of the things that you need to get your head around, and then tackle it one at a time.
- Update your accounts
Make a list of all your accounts, policies, and debts. You may need to update all of them with your new name or contact details. You may also need to remove or alter who has authority to access these accounts.
- Educate yourself
There are many online resources to educate yourself about money and managing your finances, including articles, books, videos, ecourses and more. You are sure to find a delivery mode that works for you.
It helps to know what your partner was responsible for bringing in and what they paid for. If you don’t have access to these figures there are online calculators that can help you estimate your numbers, plus speaking to a family lawyer can help you get access to any documents your partner is holding back.
- Create a budget
There are many templates online for creating a household budget. This budget should be honest and realistic, not just what you hope will happen. When creating your budget it helps to comb thoroughly through your bank statements and expenditure for at least a month, and even up to 12 months because there will always be little costs or periodical charges that you forgot about.
Once you’ve created a budget you should put in place a system that works for you to help you stick to it. Pen and paper or a computer spreadsheet can work, but there are also apps that can help.
- Check and build your credit
You should check your credit rating report. If you have always applied for credit in your partner’s name then you might not have much of a credit history, meaning that it may be difficult to apply for credit on your own.
There are things you can do to help you fix your credit and also develop a good credit history. A financial counsellor should be able to advise you of this.
- Understand how your investments and ongoing costs work (and how to switch to a cheaper option)
One of the main things to educate yourself about is how your investments and ongoing expenses work, including things like your superannuation, your insurance policies and what they cover, and your loans and repayments.
There are often cheaper options for loans or insurances and you may also find that you are paying for things you don’t need (or not paying for things that you do). Look into other policies and options to make sure you have the best one for your purposes moving forward.
- Talk to a financial counsellor or advisor
It’s important to speak to someone that you feel comfortable with, and that understands your current situation. Finding someone who has dealt with financial security post divorce will help.
There is a list of financial counsellors here. I can also recommend a number of service providers that I work with.
- Make long-term goals
Your first step will be understanding your finances and making sure that enough money keeps coming in to support you and your children. But you should also set long-term goals for your money as well, including saving for retirement or paying for university or re-training.
If you aren’t sure where to start, but you know that you need to get going on understanding your finances and gaining financial empowerment post divorce, contact me to talk.