How to get your money in order when a relationship ends.
Money might be the last thing on your mind when a relationship has ended, but it’s important to consider your finances when separating from a partner - and we’ve got a checklist to help you.
You probably know what’s best for you, but if you’re not sure, ask a trusted friend or start by sorting out the immediate things, like your own bank account. Not all of these actions may apply in your situation.
If you have joint accounts and you haven’t already, consider setting up your own bank account(s) and make sure your income goes to that account. If you don’t already have a savings account in your name, you might like to open one too.
Have you considered closing any joint accounts? You’ll need to make sure the account isn’t overdrawn before it can be closed. Keep in mind that your bank might put a stop on your joint account if you’re in dispute with the other account holder, so no money can be withdrawn until a resolution is reached.
A budget is a good place to start when re-establishing your financial independence. Review your budget or develop one to cover how you will manage on your income with your expenses. You can use a Budget Planner to do this.
When developing your new budget, work out how you’ll deal with typical costs that may arise such as:
You might need to update your details for some of your financial obligations. For example, it could be worth checking that only your name is on the bills you’re receiving, like the electricity for the place you live and phone. Make sure you securely store key documents like passports and birth certificates. Don’t forget to update your passwords if you’ve shared them too.
Do you have joint credit cards or direct debits set up to pay them off? You’ll need to work out a plan to pay off any balance still outstanding before you can close the account. Your bank may allow only one of you to close the account or you may both need to close it, depending on the arrangement.
If one of you has moved out and you are renting, you’ll need to update your rental agreement. You’ll also need to talk about how to make future payments and how you’ll deal with the bond once the rental term is over. Will you divide it at the end of your lease?
If you have a joint home loan, dividing this can be complicated. You could think about whether you want to sell the property (and whether there are any fees for paying out your mortgage early) or if one of you is willing to buy the other’s share. You may also be able to get free legal advice to help you with your decisions about your assets and debts.
Dividing your assets when you’re separating can be complicated. You may need to seek professional advice. Start by listing your assets, such as your home, car, furniture and superannuation as well as your liabilities like any joint debt. You could use MoneySmart’s net worth calculator to help you do this.
Now is a good time to review who is named as a beneficiary for your superannuation, life insurance and will if you have one. The people listed as beneficiaries are those who’ll receive money if you pass away.
If you’ve completed the above steps, well done. You will have completed a bit of administration work but are well on your way to financial independence. Now might be a good time to start thinking about new goals. What is a suitable goal for you now? Visualising your goal can increase your empathy with your future self and help you feel motivated to put a plan in place to get there.
This guide contains general information to support you as you build your financial fitness. It doesn’t consider your personal circumstances and isn't financial advice. The information is true at the time of publishing.
.svg){kind=small}
.svg)