What you need to know about money if you're getting a divorce
Money and divorce: it’s a topic many of us have questions about - but sometimes we’re a bit afraid to ask. We know it can feel embarrassing, messy, overwhelming - or all of the above! - but with a helping hand, it doesn’t have to be. If divorce is on your mind, but you’re not sure what this will mean for you financially, we’ve got some info to help steer you in the right direction.
Why financial planning around divorce is important
At The Table, we’re here to support women to better manage their moolah. Some of us find money a bit of a tricky, awkward thing to talk about. Add divorce on top of that and it can be an extra sensitive subject, wrapped up in all the complexities of relationships and emotions.
We want to break down this stigma and get gals talking about money! By chatting about how we interact with money through all the different stages of our lives - the ups and the downs - we can help women gain more financial confidence and freedom. After all, relationship break ups are something most of us go through at some point, so we shouldn’t feel ashamed or scared to talk about it.
Top tips for if you’re going through a divorce
Get comfy and settle in to learn a few things you can do to look after your financial wellness when considering a divorce. Pssst - don’t forget that similar processes can apply if you’re separating from a “de facto” relationship, which means you’ve lived together as a couple for at least three years.
- Talk to a lawyer. There’s no way around this - there will be admin! Even in amicable break ups, a lawyer is essential for dealing with all the paperwork. They can help you navigate joint accounts and property, updating your will, and guiding you through any legal action if needed. They’ll be referring to the Property (Relationships) Act, which dictates how assets are divided between couples. Let’s be real, you might feel a bit overwhelmed by it all, so don’t be afraid to lean on their expertise.
- Reorganise your daily finances. It’s likely you will need to open new, solo bank accounts, and rearrange how your bills will be paid. While this might feel a bit daunting at the start, it’s also an empowering moment - you’re in control! Ensure all your joint accounts get closed and all bills are paid off: you’d hope it wouldn’t happen but you don’t want your ex racking up debt in your name or impacting your credit score. Don’t forget to revisit your insurance policies to make sure they’re up-to-date.
- Make a new budget. Budget, budget, budget! Now that you’re flying solo, your expenses will have changed. It’s important to take a beat to regroup and take stock of all the cash coming in and out of your accounts. How else will you know if you can afford that Eat Pray Love style holiday of self-discovery? Even a simple spreadsheet can help you get your head around your new situation - but if you’re an Excel whiz, go wild!
- Plan for the future. No matter your age, there are ways to boost your financial wellbeing and plan for a more abundant future. One of the most common investments New Zealanders have is KiwiSaver, which is super important for retirement planning. You can switch to the Mercer KiwiSaver scheme for access to expert financial advice about your KiwiSaver account and online tools to help you plan for the best possible retirement for yourself and your whānau. How good!?
- Look after yourself. Going through a divorce can be one of life’s most stressful events. Get support from your loved ones and take time to look after you. With a little bit of financial planning, you’ll be able to relax that much more, helping you get through the tough times. There’s always a light at the end of the tunnel - and you’ll get there!
The above article is general information and does not purport to give financial advice. The Mercer KiwiSaver scheme and Mercer FlexiSaver are issued by Mercer (N.Z.) Limited. Product Disclosure Statements are available free of charge at seatatthetable.co.nz.
