If you’re going through a divorce, you may be feeling a mix of emotions. It can be an overwhelming and difficult time to navigate, with lots to consider – from where you’ll live to how you’ll manage your money.
Here, we explore how to make smart financial decisions during your divorce so you can move into the next chapter of your life with confidence.
Get a clear picture of your finances
Firstly, it’s essential to have a thorough understanding of your financial situation. This includes establishing your matrimonial assets, such as property, pensions, savings, vehicles and so on.
Gather all relevant financial documents and consult with professional advisors to assess your current standing.
This is important because you and your ex-partner will “need to agree how to separate your finances” when you divorce, says the government website. Without knowing the details of your finances, it will be difficult to have these critical conversations.
If you agree on how to divide your assets, you “need to apply for a consent order to make it legally binding”. If you can’t agree, you may need to seek guidance from your solicitor, use a mediation service or get a court to make a financial order.
Create a budget and financial plan
Once you reach a settlement and know how your finances will look post-divorce, set some time aside to create a realistic budget. Start by establishing your total income including any spousal or child maintenance.
From here, calculate all your ongoing expenses such as utility bills, rent/mortgage payments, food, mobile phone plans and so on. Deduct these costs from your income. This will leave you with your disposable income.
You can then decide how you want to budget your disposable money – which may include setting some aside for savings and creating a pot for things like family activities and eating out.
It’s important to factor in long-term needs too, such as retirement savings and any educational costs you have for your children (if applicable).
Creating an in-depth financial plan will help you make smart decisions going forward in line with your new financial position.
Seek professional guidance
During your split, it’s worth seeking guidance from specialist divorce solicitors who can help you navigate the process.
They can assist with many aspects of divorce, including spousal maintenance, defining matrimonial assets, pre- and post-nuptial agreements and arrangements for your children. You can also get support with pension division and business interests.
Getting bespoke advice early in the process will ensure you don’t overlook any important aspects of your finances.
This specialist support will also help you understand the various options available so you can decide on the right approach to take for you and your family.
Navigating a divorce can be incredibly stressful and upsetting, so it’s important to look after yourself during this difficult time. Remember to seek support from your solicitor, reach out to loved ones and continue to do things that you enjoy, such as hobbies or sports.
You can also get help from Citizen’s Advice and find guidance on divorce on the gov.uk website.
