Top tips for money management post-divorce

Going through a divorce is hugely difficult, both emotionally and financially. During this turbulent time, many divorcees express concern about their financial health post-split. “What will happen to my assets? How will I manage my bills? Will my credit score be affected?” These are just some of the questions you may be asking yourself. If you’re worried about managing money after your divorce, check out our top tips below.

Retitle assets and change beneficiaries

Did you jointly own a house with your ex-partner? A car? Or any other assets that are in both your names? Then you’ll need to get these assets retitled after your divorce. The same goes for changing beneficiaries, such as the named beneficiary of your life insurance. This is important because if your ex remains your beneficiary, they will receive any payments or benefits should the worst happen to you.

Create a new budget

Whether you were fully dependant on the other person financially, you shared the cost of bills, or you were relatively financially independent, it’s likely you’ll need to create a new budget post-divorce. This is because your financial situation will have changed; for instance, you may need to pay rent or mortgage for a new property or start paying for a new car. An accurate budget is essential as it will help you stay on top of your new outgoings. Firstly, establish your income including any support you’re receiving, then make a list of your new expenses. This will give you an idea of how much disposable income you have at the end of each month, allowing you to calculate a monthly budget.

Change insurance policies

If you had joint health, household or other forms of insurance – you’ll need to update your policies. Take your homeowner contents insurance, for example. When you took out the policy, you’ll have listed all the expensive items you wanted to insure, such as music equipment or jewellery. If these items are no longer in the house post-divorce, there’s little point paying for this level of cover. Also, if you don’t already have it, now may be a good time to get income protection insurance – as you don’t have someone else’s salary to fall back on. This will protect you should you suffer an accident or injury that leaves you unable to work.

Close joint bank-accounts

You may have already done this during the divorce, but if not, it’s essential to close any joint bank accounts as soon as possible. Otherwise, you may be faced with hefty debts to settle should your ex go on a spending spree using the credit card or overdraft. Whether you spent the money or not is irrelevant because you are both liable to clear debt on a joint account and you may have to seek alternative funding methods to pay them off. That’s why it’s so important to close these accounts quickly to avoid putting yourself in a tricky financial situation.

The key to successfully managing your finances is to take it one step at a time. Create a to-do list and order each task by importance, then work your way through. This will ensure you haven’t forgotten anything and will help you take control after a difficult time in your life.

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