Divorce is not only emotionally traumatic but financially it can leave you starting all over again. There are some key issues I’d like to share that we address when working clients.
If you have been through a divorce here are five steps steps you can take to get your finances back on track:
1. Reassess your financial goals
This may take some time but sit down and think about what is important to you. Write them down, they may change but at least get them down on paper.
2. Budget – Know what your expenses are
When you are back to one income budgeting becomes more important, you need to know exactly what money is coming in and what is going out. Look to see what savings you can make. It is a great idea to keep a ‘spending’ diary that you can analyse each week.
3. Your property
Decide what type of property is right for you now – unit, house, townhouse. Maybe you should rent until you decide what suits you best given the high entry and exit costs. How much can you borrow and how does that affect your other goals e.g. retirement.
4. Your Superannuation (Retirement Planning)
Review your super contributions and make sure you understand what it is likely to be worth once you can access it. If you only have a small super balance or have just lost part of your balance in a settlement you may need to increase your contributions.
5. Protect what you have
Protect your income – if you get sick or injured and can’t work, how will you pay the mortgage and other living expenses. Income protection insurance is critical.
If you can’t do this on your own – seek some help. The sooner you get started, the sooner you’ll be back on track financially.
Written by Dave Rae
More about Dave Rae – I am a financial planner and adviser based in Canberra but working with clients all over Australia. Over the past 15 years I’ve gained a wealth of experience across investing, personal insurance, superannuation and most importantly guiding clients on their financial journey. Contact Dave Rae
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General Advice Warning
The Information on this page has not taken into account your financial situation, needs or objectives. Before acting upon any advice, you should consider whether it is appropriate for you.