Deal With Your Finances During A Separation

There are many important things you need to organise when going through a separation. One that may not be a priority, however is crucial to your current and future financial wellbeing, is your finances.

The following article outlines the first steps you need to take when going through a separation to help you get a handle of your finances through this difficult time.

Gather Financial Information

Now is the time to get a good handle on all your financial information. If you didn’t control the finances within the marriage, getting your key financial records together is an important step. Here is a great starting list by ASIC’s Money Smart[1]:

• Savings and transaction account statements
• Utility bills (e.g electricity, gas, mobile and internet)
• Credit and store card bills
• Property paperwork (deeds, mortgage papers, home loan details)
• Investment paperwork (managed fund statements, share dividend statements)
• Tax records (tax returns and tax file numbers)
• Insurance policies (e.g health, home and contents, car, income protection and life)
• Superannuation accounts (both yours and your ex-partners)
• Will and estate plans
• Contact details for your accountant and lawyer

Create A New Budget

With the end of a relationship comes change, financially you need to work out what income and expense are going to change. With this knowledge you can then plan for your future better, as well as avoid and rude financial shocks.

An easy way to start a new budget is to write down all your income streams and expenses, then work out what is essential and what can be cut back.

Related Article: Surviving Divorce: Financially Where To Start

Reduce Joint Debt

“Although you may be separating from your spouse, your debt is still married. You must continue to pay any joint debt accounts that you have in your name. Check your credit report for a list of those accounts, such as credit cards, and consider closing them as soon as possible. Keeping joint credit cards open could be dangerous because you are still responsible if your spouse splurges on a big-ticket item.”[2]

Note: This is general information advice only and does not constitute specific legal advice. If you would like further information in relation to this matter or other legal matters, please contact us on 03 9620 0088 or email info@resolveconflict.com.au

[1] ‘Divorce and Separation’, ASIC Money Smart Financial guidance you can trust, viewed 9 May 2018, https://www.moneysmart.gov.au/life-events-and-you/life-events/divorce-and-separation

[2] Leamon, S 2016, 3 Tips for Managing Your Money While Separated From Your Spouse, Nerdwallet, 21 September, viewed 9 May 2018, https://www.csmonitor.com/Business/Saving-Money/2016/0925/Three-tips-for-managing-money-while-separated-from-your-spouse