Divorces can be extremely expensive, particularly if you aren’t organised and don’t keep your finances in check. Here are eight top tips to help you save…
Going through a divorce will no doubt leave you with a lot more financial burden than usual. After all, the proceedings themselves may cost a lot, and living on your own is sure to leave your purse strings looking a little worn.
Though avoiding the financial burden of using divorce solicitors to come to divorce financial settlements is nearly impossible, there are some easy ways you can save money during and after your divorce. In this post, we’ll discuss some of the main ways you can keep control of your finances to avoid going into debt during this difficult time.
Download a budgeting app
There are several budgeting apps to choose from to help you understand your income and spending, and regain control of your finances. Often, budgeting apps can be linked to your bank accounts and credit cards, so transactions are automatically logged and tracked.
Certain apps and features allow you to set budgets, create saving pots, and categorise spending so you can see what you’re spending your money on. It’s also possible to set up limits and notifications to tell you when you’re going over budget.
Cut back on luxuries
Though getting your hair cut every week or buying the latest iPhone might be something you’d like to do, it’s wise to cut back on the luxuries when going through a divorce. Don’t get us wrong, treating yourself when you’re feeling down may seem like a great idea, but it’s often not the best solution when you’re trying to save. Try to limit yourself to one gift or ‘luxury’ (within limits) each month, while cutting back the rest of the time.
Break financial ties with your ex
One of the first things you should do when sorting out a divorce is to start to separate your finances from one another. Whether your financial ties are in the form of savings or a joint current account, it’s a wise idea to have a clean slate.
It’s also wise to apply for a financial consent order when you get divorced. In the UK, you do not automatically break financial ties with your ex-husband or wife unless you obtain one, and without a financial consent order, a former spouse can claim money from their ex many years (sometimes even decades) after the divorce.
Try to remain in the matrimonial home
In many marriages or civil partnerships, the family home will be the biggest asset you own as a couple. As well as being important financially, it may also represent security for your children. So, it’s important to try to come to an agreement with your partner before it escalates to complicated court proceedings.
The court often makes the decision based on who they think the primary caregiver is and what will cause the least amount of disruption to your child. Keeping these factors in mind before deciding on who gets the home will save time and money in the long run.
Don’t live with a new partner until the divorce is settled
In addition to the above, it’s recommended to not move a new partner in until your divorce is settled. Though you may think that this is a good means of saving money, it could hinder the amount you get in your divorce settlement due to an increase in household earnings.
It’s important not to hide or lie about your current relationship status, but ensure you fully consider the consequences of moving in a third party before your divorce is finalised.
Check to see if you’re eligible for child benefit
Everyone’s circumstances are different during divorce proceedings, and it may well be that you’re entitled to claim for Child Benefit during or after a divorce. There are several requirements that you must fit to claim, but it’s worth researching if you think you’d qualify.
Child Benefit can only be paid to one person – usually the main carer. If your ex-partner is receiving the Child Benefit payment, you might not get the money unless they pass it on voluntarily, so you must check sooner rather than later.
Reach an agreement on personal property
Ideally, it’s a good idea to agree on how your personal property will be divided before having to involve divorce solicitors and the court. Agreeing on your personal property sooner rather than later is beneficial in that it enables you to sell some items and invest the money elsewhere.
Some belongings will be easier to allocate than others, but assets that were a joint purchase, and cost a considerable amount, may take some mediation.
Regularly check your credit score
This may sound like a simple recommendation, but you’d be surprised how many adults don’t regularly view their credit score. Apps such as ClearScore are fantastic tools at giving you access to your financial data so you can monitor your progress.
As well as offering you sound financial advice on how you can improve your credit rating, credit score apps can recommend what types of credit cards and loans you’ll be pre-approved for.
Can you think of any other ways to save money during or after a divorce?
In this post, we’ve discussed eight ways you can save money during and after a divorce. Though this list isn’t exhaustive, it offers a variety of suggestions to get started with – from regularly checking your credit score, to cutting back on luxuries, and trying to come to a compromise on who remains in the matrimonial home.
If you’re really struggling to get your finances in check, we recommend speaking to an independent financial adviser who will be able to delve into your finances and help you curate a definitive plan. Best of luck!
Please be advised that this article is for general informational purposes only, and should not be used as a substitute for advice from a trained financial professional. Be sure to consult a financial advisor if you’re seeking advice on your finances. We are not liable for risks or issues associated with using or acting upon the information on this site.