Divorce rates are higher now than they have ever been. Sadly, nearly half of all first marriages end in divorce, with around 60% of second marriages going down the same path.
Apart from the emotional toll that divorce takes on everyone involved, financially it can be a disaster for both parties. One normally loses income for living, and the other loses assets. As a general rule, if your husband has been the main income earner, you will gain assets but won’t have the same level of disposable income to support your former lifestyle.
Surviving divorce from a financial standpoint can be difficult, so here are five tips to help you cope with the monetary pressures that may be placed on you.
- “Think financially, not emotionally”
Jeff Landers, a financial strategist for divorcees, coined this term. It’s easier said than done however, and it’s a challenge not to be led by your emotions. Take a long-term view of what you need financially for the future and how that can best be served. And as much as it might be tempting, try not to act out of revenge or spite.
- Seek therapy
Divorce is an extremely difficult time in anyone’s life, and challenges your entire being. It’s traumatic and heartbreaking, even if you were the one who instigated the divorce. Dealing with all these emotions can take your focus away from where it needs to be. As with any life trauma, seeking a good therapist can help you navigate the ups and downs of a divorce with a clearer head. When you’re thinking more clearly, you can make better financial decisions that will suit you for the long term.
- Re-assess your needs
Depending on your age and stage of life, think about whether you really need the big house and all the upkeep that comes with it. It might be more suitable for you to free up some cash both from the sale of your combined assets and the reduced living expenses that come with moving to something smaller and more manageable.
- Get professional advice
Just like any other legal or financial situation, expert advice is worth its weight in gold during a divorce. A professional will help you fight for your entitlements and needs, give you solid advice when you don’t know what to do, and make the whole process smoother and faster.
- Maintain your four walls
Make sure you can keep the essentials covered – food, house/utilities, clothing and a car. You’ll be able to deal better with the situation knowing you can eat, have a roof over your head, a shirt on your back, and can get to work.
Going through a divorce is a challenging time, and navigating the financial ups and downs is a process that needs expert guidance. Great financial advice will help you make the right decisions.
To meet with one of our Financial Life Managers who understands what you’re going through, call us on 02 9241 2575.