When a relationships ends, it can be a difficult time, both emotionally and financially. Starting over financially takes a bit of time, but if you take the right steps, it can provide you with a clean slate to get moving with the next phase of your life.
Consider establishing your own bank accounts
If you've had joint accounts you might like to consider setting up your own bank accounts.
Know where you stand financially
Take some time to review your finances to assess your net worth. Look at any debts you may be responsible for and list all your assets. Knowing where you stand financially can help you manage your money more effectively.
There are some simple steps you can take to determine the inflows and outflows of your money. You could start by collating all your key financial documentation including:
Utility bills (e.g. electricity, gas and phone)
Credit and store cards statements
Any investments documentation e.g. share dividend notices
Property deeds, mortgage papers, home loan details
Savings and transaction account statements, including any PINs and passwords
Any insurance policies such as Life, Health, Income Protection and General Insurances such as Home & Contents, or car insurance
Will and estate plans
Contact details for your accountant and lawyer
Seek professional legal advice
Most people find that consulting a legal professional beneficial in assisting with the equitable division of you and your ex-partner’s assets; such as property that is held in both names, or to prevent the sale of any property prior to any settlement that is held only in your ex-partner’s name. They can also provide advice on formalising a property settlement. It’s likely that you will also need to review and change your Will to take into account your new circumstances.
After a relationship ends, it is also important that you get your super sorted. In many cases, when going through a formal separation or divorce, both parties' super savings may be considered as part of the formal property settlement and your ex-partner may have some rights to claim some of your super, or you may have a right to claim some of theirs. Your legal adviser can assist with this as part of your broader property settlement.
Once the settlement has been finalised, you should ensure any super accounts that you hold have beneficiary nominations that match your circumstances in the event anything happens to you. For example, if your ex-partner is nominated you might want to reconsider your nomination.
Adjusting from a double income to a single income
If you were the money manager in the relationship you're already a step ahead. However, if it was your ex-partner making the money decisions, you now need to take charge of your own finances. Consider using the list above as a starting point to determine what kind of bills and expenses you may need to pay and what savings you may have. For example, the amount and frequency of phone bills and credit cards, details of the duration of any loan terms which you may still be accountable for or other costs like utilities, council or strata costs.
Once you know, you can focus on your own financial future and make key decisions as to how you will manage your finances going forward.
Taking a look at your income and expenses and setting a budget is a great way to get your finances in order. You can find budget tools online that can be very useful in helping you see what you spend and where you can cut back.
You also need to think about reviewing your insurance, including car, home and contents, income protection and life insurance, especially if you have children.
Just like your super accounts, you should double check the beneficiary of your insurance policies, if your ex-partner is nominated you might want to reconsider your nomination. This may also be a good time to review all of your insurance coverage levels to make sure you have the right amount of cover, either inside or outside of your super.
The information is current as at 19/10/2015.
This information has been prepared without taking account of your objectives, financial situation or needs. Because of this you should, before acting on this information, consider its appropriateness, having regard to your objectives, financial situation and needs.