No-one goes into a marriage thinking it’s going to end in divorce, but unfortunately it does happen, and sometimes financial complication arise. So, what can you do to save money post-divorce? Read on to find out…
Whether you’re getting a divorce due to unreasonable behaviour, adultery, desertion, or you’re using an annulment solicitor to void a marriage that should not have happened, going through a breakup means overcoming many challenges. It can, amongst everything else, lead to complicated financial issues. Not only can the solicitor cost money, but going forward into life as a singleton can leave you in a financial spot of bother.
It’s a stressful time, and adding money to the mix is even more stressful for some. But, it is important to ensure that you, your family, and your finances are protected after a divorce and that you can divorce cheap and quick. This will help you to get on the right track for rebuilding your life post-divorce, as you will now need to support your household on one budget.
Read on to find out our eight top tips that might help you to save money post-divorce…
1. Review your insurances
More specifically, it’s important to make sure that your life cover is sufficient. This is especially important if you have children who are financially dependent on you.
Make sure to seek financial advice so that any policies are set up correctly to eliminate any Capital Acquisitions Tax (CAT) liability that could be due in the event of a claim.
2. Create an emergency fund
It’s important to start creating a backup fund now, so you have a safety net. Easier said than done, we know, but you’ll thank yourself later!
This could be used to fix a broken boiler, car repairs, or if an unexpected incident happens in your life. Three to six months of living expenses is a recommended amount to strive for. After this, you can start to think of short- and long-term savings goals, if your budget allows.
Consider reviewing your budget to know where you can cut down your expenses in order to save for emergencies. For example, start looking at subscriptions you can cancel and other luxuries that will help to increase your disposable income and allow you to save.
3. Switch utility providers
Another way to save money is to look around to different energy, gas, and water providers. Although, this wouldn’t be recommended by many experts in the current climate, it’s something to bear in mind for the future.
4. Organise your finances
One of the main expenses during a divorce that will drain the money you receive, is the time of your lawyer.
If your finances are organised, you and your ex-partner understand who wants what, and you know your rights in terms of pensions, this can make the divorce process much smoother and quicker, saving you time and money. To do this, some of the things you need to know are:
- Whether your ex-spouse has insurances in place to cover maintenance payments.
- Check to see if there are Pension Adjustment Orders (PAO) as part of the divorce settlement.
- Ensure to recognise how important a pension is.
- Get your bank statements, credit card statements, tax returns, mortgage payments, car loans, investments, retirement accounts and copies of titles and deeds organised.
- Ensure you have a paper and electronic copies of important documents where possible.
- Make a habit of emailing, not calling, your lawyers because time is money.
- But if you do need to call your lawyer, ensure that you have a clear and concise list of questions you want to get answered.
- Avoid paying for appraisals on houses and cars where you can.
- Change beneficiaries on your pension fund and other savings.
If this sounds all too much, be sure to seek the help of a financial adviser to help you out. They can guide you through the process of financial planning to manage your finances more effectively. But aside from working with a financial advisor, you can also consider using reliable personal finance applications and software to help organize your finances. With these innovative solutions, you can create a budget, keep track of spending, pay bills on time, and save money.
5. Consider a roommate
Although it might seem daunting, getting a roommate could be one of the answers to saving money post-divorce. If you are keeping your current property, you might have a spare room that can now be rented out.
The right roommate will help to take over some of the burden of the cost of rent, but they can also share the cost of groceries if you decide. In some circumstances, and once you’re sure they are trustworthy, you may also be able to rely on them for occasional supervision of your children.
6. Downsize your home
As a couple, you would’ve been able to afford a bigger home than what you can do now you are a single household. Your expectations on your home need to be realistic, as you will struggle to save money if you want to buy a house of a similar size. So, consider downsizing to help ease the mortgage repayments. It means moving from a bigger home into a dwelling with less square footage or fewer bedrooms to save money post-divorce.
However, despite the financial benefits, downsizing your home can be a tough process. That’s why if you’re planning to sell your old home and buy a new one, it’s best to work with a real estate professional who can help you. They know exactly how to sell in a sellers’ market and move to the buyers’ market to save most money.
7. Don’t forget child benefit/tax credits
If you are based in the UK, you might be entitled to child benefit or tax credits. This might not make a huge financial difference to you, but it could help to cover the essentials your child needs and will take a little bit of stress off your plate.
If you want to know more about these child benefits or tax credits, you may speak to a trustworthy legal or tax professional for guidance. They may also help explain the process so you can properly file a claim and receive the benefits for your child.
Remember, there are many solicitors in London or wherever you may be located, who will not only make your divorce as seamless as possible but will also protect your child’s best interests throughout the divorce proceeding. So don’t hesitate to talk to them to know how you can financially protect your little one from the financial impact of divorce.
8. Change your habits
Changing your habits could be one of the ways to save money after a divorce. It might be difficult to give up the things you are used to, but until you have worked out your budget it would be useful to give it a try.
Habits to change could include eating out less, spending time with friends and family at home, or changing the supermarket you shop in. All of this might seem small, but it will add up.
Feeling More Confident About Your Finances Post-Divorce?
Here, we’ve summed up eight tips that might help you to save money throughout the divorce process. Not everything will be suitable to you and your situation, but there is lots of advice out there that can help you to save money before, during and after a divorce or annulment.
Are you going through a divorce or annulment and have some top tips for saving money? Let us know in the comments below.