Personal finance

Five Tips to Secure Your Financial Future During Divorce and Separation

ferfefgetwAccording to the Australian Bureau of Statistics, more than half of divorce applications in Australia are filed by a single applicant. Whereas the telltale signs of a deteriorating relationship are often apparent, what this statistic shows is many people are surprised to learn that their partner wants to go separate ways. The following tips can help you get through divorce with minimal financial strain.

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1. Bolster Your Cash

On becoming aware of an application for divorce, one of the first things most people will do is to get in touch with divorce lawyers. It’s only rational. Yet, other things could be happening that require more urgent attention. In this era of online and mobile banking, finances can be transferred quickly and with relative ease.

People get married under the presumption they’ll live together happily ever after. So thinking about what would happen to the money in your joint account may sound like a bit of a taboo topic. Nevertheless, even if for financial prudence alone, you should start to ask yourself how much money you’d have if you suddenly lost access to joint accounts.

Despite having a good regular income, divorce can be expensive in the short-term. You may be the one to move out of the home, so you will need money for rental bond, electricity installation, internet and phone. You should already have a personal bank account but if you don’t, create one right away so you can start to redirect your pay and other income there. Secure or cancel credit cards if necessary.

2. Contact a Lawyer

Divorce and separation are legal processes. Legal advice is therefore crucial. You have to ensure your rights are protected. Divorce may mean entering into contractual agreements that have far-reaching, long-term repercussions. One wrong move and you’ll be bound by the negative consequences for years to come.

Some couples already have a family lawyer. In such instances, you may need to seek new representation.

3. Prepare a New Budget

Divorce leads to a dramatic change in your daily life. You may be entitled to some financial compensation as a settlement. However, such assets and funds won’t be immediately available to you. You must create a new budget taking cognizance of your income and likely expenses in the short and medium term.

In some instances, it may be necessary to embark on an aggressive job search to accommodate the new reality. For example, if you are co-owners of a large home mortgage, there’s no guarantee your former partner will be willing to continue contributing to the repayments.

This will not only place the home at risk of foreclosure but also impair your credit score. Your lawyer can help bring an angry partner back to their senses but you want to have some headroom to chip in for their share in the interim.

4. Protect Your Personal Documents

Your documents are just as if not more important than cash as you prepare to start a new life. Chances are that you already have your license, insurance, Medicare and credit cards in your purse or wallet. On the other hand, your birth certificate, passport and other vital documents are likely in the house.

You may not have a chance to return to collect them so take them at the earliest opportunity. Remember, divorces are emotional and even seemingly cordial ones can quickly spiral out of control eventually becoming a bitter confrontation. It’s best to be well prepared for any eventuality.

5. Remember the Kids

Where there are children involved, every effort must be made to shield them from the emotional toll of a divorce. Equally important is making sure their quality of life doesn’t deteriorate significantly due to financial difficulties.

Ergo, in addition to finalizing child support payments and custody, you may need to get in touch with the child’s day-care or school to notify them of your separation. This will provide a context in the event that there are court orders limiting access to the children or if you need to negotiate new payment arrangements in line with your new financial circumstances.

Separation and divorce have been the beginning of financial ruin for many. It doesn’t have to be that way.

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