Steps To Map Out Your Financial Future Post Divorce
Create a ToDo list. Image by Markus Winkler
Taking control of your financial future is vital after a divorce. The process can be one of one of the most traumatic experiences that anyone can undergo in their lifetime. Fear of starting all over again can leave many people in a state of paralysis. This is particularly applicable to spouses who have not had to deal with financial practicalities such as tax, standing orders and direct debits.
In a divorce, a financial agreement sets out how you and your ex will divide your finances. It can include you obtaining a share of your former spouse’s pension and/or regular maintenance payments.
When preparing for the impact of your divorce, you may have already organised your finances ready to move towards being in control. If not, here are some practical tips to assist you.
Create a ‘to do’ list of all things financial (bills etc) and an aspirational list to set goals for enjoyable things such as treats and breaks.
Linked with this, have two bank accounts - one for day-to-day expenses for the house, food, car and associated expenses, direct debits, standing orders and credit card payment. The second is for setting aside some savings for exceptional expenses such non-essential clothing, holidays, and house repairs.
Set out the absolute and exact payments needed every month for your house and family.
Don’t have bills estimated and only pay for what you use.
Pay off your credit card monthly and avoid debit cards
Know when your maintenance payments arrive and budget accordingly. Ensure standing orders don’t go out before your monthly payments are due in.
Apply to your Council for a 25% council tax discount. The concession applies if you are on your own or have younger children.
Expand your support network if you’re on your own or have children. Now is an ideal time as the country emerges from lockdown.
Be prepared and plan for child maintenance coming to an end.
Take professional advice on preparing and budgeting for your own retirement.
Make a will. If you have a pension or life assurance, ensure it includes your chosen beneficiaries and is updated. Review it every few years.
Stay healthy in body and spirit – try new things. You could also consider engaging a life or Divorce coach who specialises in helping people in your situation prepare for their new future
If you meet a new partner and are thinking about moving in together, seek the advice of an experienced family law firm as it could affect existing maintenance agreements.