Splitting from a long-term relationship or a marriage isn’t as simple as saying your piece and walking away (or even ‘ghosting‘, if you are that way inclined) when you have shared assets and bank accounts together.
It can be challenging enough to amicably dissolve a relationship with someone you once loved, but the money side of things is often what can turn a peaceable split into a confusing mess.
So, if you are thinking of leaving a long-term relationship, or you are currently navigating a split, here are some of our top tips for easing the financial stress.
Close your joint credit account
The first thing you should do is close any joint credit accounts to limit damage to your credit score. By leaving them open, you may continue to pile up debt between you and your partner.
Open individual bank accounts to divide funds from any joint accounts you shared. If you are still deciding who owns what, then this is the first thing you need to work out.
Engage an experienced consultant
If you do not already have one, engage a solicitor and a financial consultant — someone who can act as an impartial third party to speak rationally and help you divide your funds fairly.
A consultant can help you work out the split of the money transfer as well as provide information surrounding assets like homes or a business (if you shared one). They can also provide a financial plan for a family if children are involved.
Get to know your budgets
If you are not used to managing your cash affairs — or if your partner managed the bills for the both of you — it’s now a good time to budget your costs so your solicitor can make sure that you are receiving the correct amount until the property/ financial settlement is complete. This will be valuable after the split to make sure you are able to fund your lifestyle.
If there’s property involved, look at refinancing options
Discuss funding options with lenders for any property that you will be holding after the split. As you may now be paying this off without a second person’s income, this may be a good time to refinance your home too and get a better rate.
Is it time to downgrade?
Review your current housing circumstances. Based on your individual requirements, you may want to consider downsizing from your current property so that you can save more and put it towards something else, like another investment in the future, or an awesome Eat Pray Love-style holiday.
Gerry Incollingo is the MD of LCI Partners, a firm that specialises in accounting advisory, lending, wealth, property, insurance and legal.