Breaking up is hard to do, especially when money’s involved. In a long-term partnership or marriage, there’s bound to be an intertwining of finances, and it can be a messy business trying to untangle it all. Adding to that rapid change and unresolved emotions, and it’s hard to keep a clear head when it comes to handling the financial side of a breakup.
Thankfully there are some general guidelines you can follow to get the process rolling. The key is to take action so you can move forward with your life.
Read on for tips on how to handle the financial side of your breakup as painlessly as possible.
Take your time
Your instinct may be to act quickly to get it over with, but don’t rush into any major decisions just yet. The settlement you agree on could have major financial ramifications for years to come, so make sure you consider everything carefully before making any rash decisions.
If your goal is to move onwards and upwards, being transparent about your income, debts, superannuation, credit cards and inheritance is key to coming to a financial arrangement. If you hide any of these items and they come up later in negotiations, it just makes it that much harder to come to an agreement, in addition to creating distrust with your legal counsel and your ex.
Hire a professional
Now this doesn’t necessarily mean a lawyer, but you’ll want a professional on your side as you navigate the division of finances. This could be a lawyer, a mediation service or accredited divorce coach. Relationships Australia is a great resource for mediation services as well.
Separate your finances
It’s time to begin the process of cancelling joint accounts and credit cards. Make sure your pay is redirected into a personal account and be sure to change the passwords to any personal accounts that your partner may have access to. For a comprehensive list of items, be sure to take a look at this helpful checklist from ASIC.
Accept that you may not get everything
As the rolling stones say, “you can’t always get what you want.” Accept that there will be some things you’ll be unhappy with. You’ll need to compromise, which means each of you will need to give a little. If you can go into negotiations with this attitude, you’ll save yourself a lot of heartache in the long run.
Make a budget for yourself
Now that you’re solely financially responsible, you’ll need to make a brand new budget. It’s important to see what life looks like on a single income so you can re-evaluate your current savings and expenditures.
Review your superannuation, insurance and will
You’ll also need to review important items like your superannuation and insurance to ensure they meet your new financial needs. You may need to change plans as a result and also update your beneficiaries. Now is also good time to evaluate your will if you have one, as you may want to take your ex-partner out of it.
This is also a good time to think about how you will refund your retirement on a single income.
Lean on friends and family
Breakups are stressful, but that doesn’t mean you need to go through it alone. Lean on your friends and family for support and advice as you navigate this new territory.
Go easy on yourself
This is a time of major transition, so it’s ok to feel off balance. You’re finding your way again in more ways than one and it’s going to take some time to get used to all of the changes. You will heal with time, and now you have a chance to start everything fresh again – the world is your oyster!
Focus on the positive
Remember, the sooner you untangle your finances, the sooner you can both heal and move on. Focus on a fresh start rather than dwelling on the past to get focused on the task at hand.
If you’re struggling with a financial breakup and you need some expert debt advice, give our friendly team a call on 1300 368 322. We’ve been helping Australians move forward for over 15 years and we’d love to help you too.