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Monday, October 29, 2018

Financially Surviving a Split

Dealing with a break up is never easy. For most people, it is a time full of confusion, anger, sadness and every other emotion under the sun. What often gets neglected is the financial impact a breakup can cause. Often people are left financially devastated when they split, and it can take years to recover. Sometimes people never recover. If you have gone through a messy split or are about to, know that keeping your finances in order might be the most important thing you do. Today I am going to give you my 10 Tips on Financially Surviving a Divorce or Breakup. While you might be emotionally devastated, you certainly do not have to be financially devastated.

 

1) Prepare beforehand if you can

While some breakups are unexpected, most take a while to simmer out. I would start preparing for the worst when things start getting bad. Here is the way I look at it. I do not think it is wrong at all to have separate bank accounts. If you both are contributing a fair amount to the household obligations I do not see why it is wrong to have some money that is all to yourself. The story is different if you both, or one of you, is struggling. I think both individuals should have savings on the side to live on in case the relationship ends. If it is a point of contention, hide it. This isn’t about love and this isn’t about betrayal. This is about being left with nothing and no one deserves that.

 

2) Evaluate the scene

Make sure if things are starting to go south that you take notes of everything you own. I have heard too many stories of debt being racked up, investment accounts being pillaged, and cherished items being taken in the middle of the night. You must keep track of everything you have acquired together so that if your partner decides to get cute, you have a leg to stand on. If there are too many unknowns, you can not make a case for yourself if you need to later.

 

3) Let your loved ones know

Breakup time is extremely confusing, emotional and lonely. You will need some level-headed minds on the outside to help guide you through it. I recommend letting those closest to you know what’s going on. The reason this is important is that at this time you may need the help of a friend, whether it be guidance, emotional support or even financial help. Make sure you don’t isolate yourself. We can often get trapped in our own heads and this can lead to destructive emotional behavior, including being financially destructive.

The Twelve Financial Pitfalls of Divorce – Woman’s Institute for Financial Education

 

4) Don’t let emotions and money mix

Try your hardest not to let your current emotional state dictate how you go about your financial business. This can be easier said than done, but it is imperative to making it out intact on the other side. Many people find a situation like this as an opportunity to spend to no end, rack up debt, or be just plain destructive financially. I am here to let you know this is the opposite of what you should be doing. I have heard many, many, many times the excuse of a bad breakup for poor financial behavior. While I am empathetic, I do think there can and should be another way.

Financial Advisor

 

5) Regroup and chill out

Along the lines of the emotional spending side of things, a breakup is a great time to just relax. When you are in a relationship you often get caught in a whirlwind of dual mentalities. Breaking up shatters plans, goals and finances. Use this time to regroup and truly understand your situation. Create a budget based solely on your income and expenditures. The excuse of being in a couple allows many to overspend. Now its all on you. Reflect on the dual spending and see the error in those ways, if any. Focus on what you will need moving forward as a solitary unit. I bet you will be better off than you think.

How to Regain (or gain) your Money Optimism – Budget Boss

 

6) Be pragmatic

I am a man. While I understand that there are some men that get absolutely pillaged by their ex-wives when it comes down to settlement time, I also know that for the most part, men come out on top. No matter what sex you are, you must be pragmatic when it comes to devising a settlement. There is nothing that angers me more than a deadbeat who doesn’t provide for his family. This often comes about because the woman decides she would rather go it alone than determine what is rightfully hers and her children’s. Math is math and if it doesn’t add up, some one has to be responsible. I have heard enough stories of men, and women, getting off scot free in terms of child support. Don’t let it happen. Be civil but be vigilant. This is your future and most importantly, your children’s future. Never let anyone off the hook.

7) Assume the worst, hope for the best

We often get caught in a bad spot because we didn’t prepare for it. Always assume that the worst will happen. What’s the worst? Use your imagination. I have seen people without a place to go, all their stuff taken, debt racked up behind their back, and bank accounts looted. Make sure you understand the problems that might arise and be prepared for them. This includes always having a place to go, having some emergency money, and keeping track of all incidents. If you are prepared for the worst, when it doesn’t happen you will be pleasantly surprised.

 

8) Focus on yourself and the future

Depending on the situation, a breakup can be an uplifting moment in time for you. You can finally take the time to focus on yourself, plan for the future and get done the things you have always wanted. Key areas are health and your career. We often neglect these areas while in a relationship because life gets in the way. Take this time to renew your relationship with the gym, a book, and even friends you haven’t seen in a while. If you fill your calendar with activities, hopefully, low-cost ones, you will be amazed at how you can transition into single life.

12 Signs You Are Dating a Deadbeat – Budget Boss

 

9) Seek professional advice

Going it alone could cost you. Make sure you seek the help of a good accountant, lawyer and even therapist if necessary. Every person you encounter will have some form of advice for you when it comes to breaking up. My advice is to let the pros deal with the pro stuff. Not using these people could end up costing you thousands in mistakes and missed opportunities.

Financial Advisor

 

10) Don’t date

It’s a natural urge to get over one person by getting with another. I would recommend avoiding this urge. The reason is simple. When in a serious relationship we often lose our sense of self. I am not saying this is a bad thing, just that it happens. Bouncing from one person to the next will not allow you to properly move on from the last person and learn whatever lesson there was to learn. This could be crucial to the success of any future relationships. While being alone is well, lonely, I believe it is what you need at this time. You have a lot on your plate right now and a lot to absorb. Clouding it with an opportunistic new person won’t allow you to think. I know this is no fun and not what many want to hear, but life isn’t always supposed to be fun. Surround yourself with friends but avoid the games of the dating scene for the time being. Let’s be honest, you probably aren’t ready for that anyway.

Why You Shouldn’t Actually Date After A Breakup – Livingly

 

I have heard way too many sad stories of relationships gone financially wrong for me to think that it is not an issue. I think it is important to understand that financially ruining your ex is not good for anyone. Remember that you loved this person at one point and you more than likely do not want to see them suffer. Both individuals should focus on the future civilly or else it will end up costing them more than what its worth.

“I used to think that divorce meant failure, but now I see it more as a step along the path of self-realization and growth.” – Alana Stewart

Financial Advisor

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Email – joe@budgetboss.ca 

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