Tag Archives: divorce

Love & Money

Hello all you Valentines!!  Sending kisses and much love to you gorgeous couples!

Did you know though, that money issues rank constantly in the top 10 reasons for divorce? Probably something you don’t need reminding of on what’s supposed to be the most romantic day of the year!

But then, communication issues, infidelity and bedroom boredom also rank pretty highly…  And ok, I’m not here to give solutions to those marital woes…  I’ll leave that to the experts!

But love and money can be a tricky subject, and communication has a huge role to play in this area.

And whether you’re a big marshmallow preparing for the most romantic day ever… or it’s just commercial hype and gets a big miss in your house, it’s always worth chatting about money.  Not sexy perhaps, but certainly smart.

Although discussing finances is a must before moving in together, committing to a relationship or opening a joint bank account… it’s an ongoing area that affects nearly every part of our daily lives.  Without the dosh, there’s no food on the table, roof over the head, annual holidays or even the hint of a lifestyle.

Being upfront early can also open your eyes to traits in your potential partner that you might want to know about sooner rather than later.

If there has to be a Top Tip, it’s to discuss money issues with your partner and that’s long before it gets to the shouting match stage.  Relationship goals are usually a joint decision that need sane and calm discussion (sometimes easier said than done… “honey, I’m pregnant!”)

People can have incredibly different attitudes to spending and saving which can cause much friction.  It’s great to be upfront with each other and admit which style is more yours.  Savers hate it when spenders come home with a new impulse purchase and the rates and water bills have just come in.

Helping spenders understand the needs of the family budget may help curb spending, or having a set amount to spend on ‘whatever’ may allow for the bills to be met, and have a little fun too.

If you’re not brave enough to pool your resources, based on previous trust issues, it’s a good idea to sit down and work out what your joint expenses will be.  You can either have a joint account that you both put an equal or set amount into each pay frequency or commit to paying certain bills instead.  That way, living expenses are covered, but ‘what’s yours is yours’ and remains that way.  My mother much preferred ‘what’s yours is mine and what’s mine’s mine,” so whatever works for you!

And when you’ve both been through the wringer before and are looking at starting over, especially if you both have your own families, it can be really smart, if not terribly romantic, to arrange a Binding Financial Agreement (also known as a pre-nup) so if things don’t work out, you both know exactly what you’ll get on exit and protect what you’ve brought into the relationship for your children.  It’s worth getting legal and financial advice for this one, and can put everyone’s mind at ease.  It may not send you to the dance floor for a tango in a fabulous dress with a rose in your teeth, but it’s certainly practical.

In many families, there’s one partner who’s a little more money savvy and the other often delegates the family finances to that one.  But not knowing what’s going on may be fine while everything is roses, but you’ll be kicking yourself if things go wrong and you’re clueless about what you have.  So talk about it, and make sure you’re ‘kept in the loop!’

And if your partner isn’t willing to share about your joint finances and everyday budget and spending and savings, something is likely off, so start sniffing around.  Intercept mail and let the bloodhounds loose.

Other families have issues where one partner is a much higher earner than the other. Being ‘with someone’ doesn’t mean you need to lose your financial identity though.  It’s important to work out what your shared goals are as a couple and how they’ll be addressed but it’s critical to have your own goals too.

So, it’s not rocket science, and if you want your current honey to still be your Valentine in years to come… start the talk, and never stop.

Taking control of your finances after divorce

The key to managing finances after a divorce is to get organised early.  Grab a cuppa and have a read through this short guide for six tips on taking control.

Divorce can be one of the most financially and emotionally stressful experiences of a person’s life. The key to taking control is to get organised early. Acting quickly to organise accounts, update details and make financial plans may help start the next phase of life with more peace of mind.

The following steps are a great place to start.

1.      Get organised

It’s important to keep track of key dates, such as when the separation occurred. It’s also a good idea to arrange a redirection of mail for the party moving out, so you continue to receive mail at the new address.

Both parties should gather all financial information, making sure there are copies of
all documents. Also write a list of all financial and property assets, liabilities and policies, making a note of whose name each document is registered under. This may include:

  • bank, brokerage or investment accounts
  • credit cards
  • vehicle registration
  • life, health, home, car, health and other insurance policies
  • utility bills for electricity, gas, internet and phone
  • property documents such as deeds, mortgage papers and home loan details
  • recent tax returns and tax file numbers
  • superannuation account details
  • will and estate plans
  • rental agreements or leases.

    2.      Close any joint accounts

    It is important to close accounts or credit cards that are in both names and cancel any redraw facilities. This will protect the finances of each individual and ensure no more debt accumulates. Each should then open an account in their own name, which only they can access. They will also need to redirect any income that previously entered a shared account into the new account.  Also check any shared social media or other accounts such as eBay – change of passwords may also be required.

    3.      Review your finances

    Update any remaining accounts, loans or policies so they are registered in just one name.  This can be time consuming, so make a list and tick them off as they’re completed.

    Insurance

    It’s crucial to update insurance policies as any individual not named will not be covered. This individual will need to make sure that they have other cover in place that is adequate and affordable for their needs. Also, remember to update any nominated beneficiaries on new or existing policies.

    Loans

    The person whose name is on a loan agreement is responsible for any debt, regardless of changed personal circumstances. It’s vital for the necessary party to remove their name or for both individuals to pay off the loan.  Sometimes agreements need to be reached prior to the changes being allowed.

    Superannuation

    Superannuation is usually a significant financial asset. Any nominated beneficiaries of the parties’ retirement nest eggs will need to be updated.

    Rent and Utilities

    Updating rental agreements and utilities will be crucial, as the listed person may be left with damage or unpaid bills to cover.

    4.      Change Wills, Powers of Attorney and Beneficiaries

    Many Australians don’t realise that divorce can affect their will. Different states have different laws.

    In Western Australia, for example, divorce automatically revokes a current will. It is vital to update wills to reflect new circumstances as soon as possible.

    To be valid, a will needs to be signed by two witnesses. Drawing up a will can be complex so it is often best to consult a solicitor.  Ask also about reviewing or starting Powers of Attorney.

    5.      Create a new budget

    It can take time to adjust to relying on one income. Creating a budget and financial plan early on can make it easier to track expenses and feel confident that bills and payments will be covered.

    6.      Reach out

    Most of us know someone who’s been there, and that divorce can be a very difficult time. There are many online government resources, as well as legal aid services, counsellors and financial advisers that can provide helpful advice on how to make the process as painless as possible.

    Getting in touch with nearby support services or creating a supportive group of friends is the best way to get a helping hand.