The end of a relationship is for most people a turbulent time. I’ve been there and struggled with questions such as – how will I take care of my children, where will I live, how will I survive on one income – all while grieving and trying to look after children who are in shock.
There is so much to deal with at a time where you’re probably not emotionally up t even tying your shoelace. I guess that is the first suggestion I would make – hold off as long as possible on making any permanent decisions (no tattoos or major purchases!!). Accept help from family, friends and even your ex if they are offering it.
My next tip is when you are ready, let go of the past and let yourself look forward. Start realistically planning the life that you will be living. If that plan involves purchasing a new home, speak to your mortgage broker as early as possible and ascertain what is possible before you make your financial settlement. Seek legal advice.
My husband and I ended our long marriage when our sons were teenagers. We had met when young and both arrived at the relationship with very little. We had both worked hard in our employment and home lives. We both had similar earning capacities. We decided to split everything pretty much 50/50 including the care of our children and did this all ourselves without legal advice or intervention. Of course, not everyone is lucky enough to experience this. For this reason, I don’t know much about family law and how settlements are worked out. I do know that before you work out your settlement either with or without assistance, it is helpful to know what your financial goals are. Will a 50/50 split be equitable and will it allow you to move on with your life without entering into financial hardship? Do you have the same earning capacity as your ex? Look at all of your assets and liabilities including super when working out the pool that will be split.
How to go about getting back on your feet:
1. Assess Your Financial Situation
Assess your current financial situation thoroughly. Gather all your financial documents, including bank statements, tax returns, and assets and liabilities. Create a clear and comprehensive picture of your financial standing to know where you stand and where you need to go.
2. Establish a New Budget
With a clear understanding of your financial situation, it's time to create a new budget. A post-separation budget should reflect your changed circumstances and financial goals. Start by listing your monthly income and essential expenses, such as housing, utilities, food, and transportation. Be realistic about your spending habits and make necessary adjustments to live within your means.
3. Build an Emergency Fund
An essential part of financial independence is having a safety net in case of unexpected expenses or emergencies. Aim to build an emergency fund that can cover at least three to six months' worth of living expenses. Having this cushion will provide peace of mind and financial security.
4. Re-evaluate Your Financial Goals
Any major change in life often prompts a re-evaluation of your life goals, including your financial aspirations. Take the time to redefine your financial goals and set new objectives for yourself. Whether it's saving for retirement, buying a home, or starting a business, having clear goals will motivate you to work towards financial independence.
5. Update Legal and Financial Documents
It's crucial to update your legal and financial documents. This includes changing your will, updating beneficiaries on life insurance policies and super funds and think about giving someone power of attorney. Ensuring these documents are current will protect your assets and financial interests.
6. Seek Professional Help
Don't hesitate to seek professional financial advice during this transition. A financial advisor or planner can help you make informed decisions about investments, savings, and financial planning. They can also assist you in developing a long-term financial strategy that aligns with your goal and provide advice on insurances. A legal professional can help you to know your rights, a mortgage broker is the best person to advise you on your ability to buy your next home on your current income, with different deposit amounts (based on a range of projected settlement outcomes). This can help you to negotiate your settlement sum with facts and figures rather than emotions.
7. Get your Financial House in Order
It's time to establish your credit history. Start by obtaining a copy of your credit report from Equifax.com.au Check your report for any existing debts in your name (eg joint credit cards), take steps to open new accounts in your name, pay bills on time, and manage your credit responsibly. Investigate any blips on your record and take action now to get them fixed.
8. Explore Income-Generating Opportunities
Depending on your personal circumstances, you may want to explore income-generating opportunities beyond your regular job. This could include freelancing, consulting, or starting a small business. Diversifying your income streams can provide financial stability and help you reach your goals faster.
9. Consider Child Support and Centrelink Benefits
If you are entitled to child support payments, make sure you understand your rights and obligations. These payments can be crucial in supporting your financial well-being, especially if you have children. Work with a lawyer if needed to ensure you receive the support you are entitled to. Centrelink.gov.au has a payment and service finder. For example as a single parent with 50/50 care of my children I was entitled to family tax benefit and rent assistance that I was not entitled to pre-separation.
10. Focus on Financial Education
Financial literacy is a powerful tool. Invest time in educating yourself about personal finance, investments, and money management. There are plenty of online resources, books, and courses available to help you gain the knowledge and confidence you need to make informed financial decisions. I like the Barefoot Investor book and the She’s on the Money podcast - this podcast is aimed at female millennials – but the advice on how to get started when your young, and after a major life change is pretty similar really.
11. Prioritise Self-Care
It's essential to prioritise self-care during this period. Your emotional well-being is closely tied to your financial health. Consider seeking support from a therapist or counsellor to help you navigate the emotional challenges you and your family are experiencing.
12. Stay Flexible and Adaptable
Financial situations can change, and unexpected challenges may arise. Stay flexible and adaptable in your financial planning. Be prepared to adjust your budget and financial goals as needed to stay on track. While divorce can be a challenging and emotionally draining experience, it also offers an opportunity for women to regain their financial independence and chart a new course for their financial future. By taking proactive steps like assessing your financial situation, creating a budget, and seeking professional advice, you can rebuild your financial stability and work toward achieving your financial goals. Remember, your financial independence is within reach, and with determination and the right strategies, you can achieve it.
Please feel free to call me or send me an email if you have any questions or would like me to look at your future borrowing possibilities. This is a free service.
Please note that this post is general information only. I am a qualified mortgage broker, I am not a financial planner.
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