Divorce not only takes an emotional toll but can often also lead to financial stress. Many women, in particular, have not been very involved with the family’s finances, and now face the daunting task of managing their (reduced) income and assets. Quite often, the accountants and financial advisers will side with the husband, leaving the female spouse without any support.
So how can women bounce back from the financial implications of divorce?
Do not make any important financial decisions straight away
Let the dust settle and maintain the status quo for a while (i.e. not selling the house, moving, etc.). Finances and emotions generally don’t mix well, so it is best to wait until you have a bit more clarity and worked out what your new personal goals and priorities will be.
Go back to basics
Focus on spending money to provide accommodation, food, clothing and essentials like utilities but try to limit any big expenses for now, such as major home renovations, buying an expensive car, etc.
Establish a financial routine and budget
It will take some time to get into a new financial routine. You may be surprised that many of your costs will be fixed (insurances, rates and utilities) and not necessarily reduce because you are now single.
Establish an emergency fund
Make sure you have access to cash to cover any emergencies. This may be in a savings account or an offset account if you have a mortgage.
Educate yourself on your financial position and your options
You should take an active interest in your finances and understand your options. This will give you peace of mind and allow you to make more confident financial decisions.
Review your personal insurances and estate planning
Now is the perfect time to review your Will and other important documents. As you may now also be reliant on just one income, you should look into your personal insurances and make sure you are covered.
Seek professional advice
You will gain peace of mind and confidence by finding a trusted financial adviser and/or accountant. They will educate you regarding your options and assist you in making the important financial decisions that lie ahead.
Yves Schoof and Affluence Financial Planning are Authorised Representatives of Synchron, AFS Licence No. 243313. The information posted is intended to be general in nature and is not personal financial product advice. It does not take into account your objectives, financial situation or needs. Before acting on any information, you should consider the appropriateness of the information provided and the nature of the relevant financial product having regard to your objectives, financial situation and needs. In particular, you should seek independent financial advice and read the relevant product disclosure statement (PDS) or other offer document prior to making a decision.