A separation or divorce can be a time of enormous stress. That stress can be exacerbated by a lack of understanding of the marital finances and uncertainty about the financial picture moving forward.
That said, divorce may seem like an unlikely place to find financial empowerment, but as you embark on the next chapter of your life, for many it offers an opportunity to take control of their financial future and gain confidence and pride in their financial achievements.
Here are 5 ways to take control of your finances through the divorce process and beyond:
- Prepare a Budget.
Preparing a budget (or revised budget, if this was something you did during your marriage) of your income and expenses can be tedious, but if you have fears around not having an income sufficient to meet your needs and the needs of your children post separation, this will go some way to alleviating those concerns (or at least bring them to light). This exercise will give you the opportunity to see what changes you may need to make to your work arrangements and spending habits, to live comfortably within your means.
- Understand your Asset and Liability Position.
It is not uncommon in relationships for one party to take responsibility for the finances. However, in the context of a separation, this can mean one person may feel completely in the dark about what they own and owe. The legal process around dividing property will help you gain clarity around what your marital asset pool is. Once a property division is finalised, think about maintaining a spreadsheet of your current assets and liabilities to keep track of your position. If you do re-partner, be proactive in managing your joint finances.
~Novel Serialisation: Heavens Fire~
- Educate yourself.
Information is power. If you weren’t involved in the management of your financial affairs in the past, commit to learning more about money moving forward. Seek out mentors and advisors (online or in person) to help you learn more about financial planning. Read books, articles and listen to podcasts on the topic of personal finance. There is a wealth of incredible resources available to help you feel empowered around finance. If you were financially savvy during your marriage, after your divorce you will have a new set of financial circumstances to gain confidence with and seeking help can fast track the transition.
- Be mindful of legal fees. Lawyers are expensive. At most divorce lawyers’ hourly rate, you want to be sure you are being as efficient and effective with their time as possible. The last thing you want to do is deplete the martial asset pool (and your property entitlement) on legal fees unnecessarily. Do your research before engaging a lawyer to find a lawyer who is the right fit for your needs. Be proactive about understanding the way your lawyer will charge. Ask your lawyer what work you can do to reduce the time they spend on your case.
- Set financial goals. Finance can feel like a dull topic for many but setting some financial goals can motivate and inspire you through the process. Whether your goals are around reducing debt, accumulating what feels like a comfortable emergency saving fund, or saving for a specific purchase like a holiday or home renovation, having a goal in mind will be help keep your efforts on track.
By Prudence Henschke
Prudence Henschke is an Australian based Certified Divorce Coach and Family Law Expert. Prudence offers 1:1 online coaching to help women realise the best possible outcome for themselves and their families, through the divorce process.
Having worked with separating women (and men) for over 20 years, I know it is essential for most women to see a financial planner – preferably one, like me, who knows the family law world. I wish I could calculate the savings woman make on legal fees by being financially informed and having a realistic understanding of what is possible and what is not.