Breaking up with a partner is never easy. Add kids and money into the equation and you have the recipe for a high-pressure situation.
Here are a few tips to make the transition of breaking up a little easier when it comes to the financial side of things.
1. Fair Split
The first thing to consider is how your family has decided to divide responsibilities. Are you both working? Are you working fewer hours to be there for the kids or do one of you stay home and run the household? This all needs to be factored in as running a household is a full-time job and a huge responsibility that needs to be factored in when splitting, especially while that person finds an income. Engage a solicitor or financial consultant to help you determine a fair split if this is the case for you
2. Close All Unnecessary Joint Accounts
Next, close your joint credit accounts to limit damage to your credit score. By leaving them open, you will continue to pile up debt between you and your partner. This is the first thing you should do. Open personal credit accounts, get rid of the joint one
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3. Take Into Account All Your Kids Expenses
Factor in all of the expenses that you have for your kids. You may choose to have a joint account for them so that you can easily pay for the items that they need such as school tuition, uniforms, sport, food, and transportation
4. What About Your Home?
Do you own a home together? Again, speak to your advisor about the best way to navigate this. Some partners choose to sell the home and split the sale price. Others may divvy up assets or buy the other person out of the investment so they can stay put
5. Make A Budget
In any relationship, it is not unusual that one partner looks after the money and payment of bills. If you are not used to managing your cash affairs, make sure you put together a budget of your costs so your solicitor can make sure that you are receiving the correct amount until the financial/property settlement is completed. This is important because you need to make sure you can afford all of your expenses, but also live your life.
6. Downsize If You Can
Review current housing circumstances for the family. Based on individual requirements, potentially downsizing from a current property can mean more funds in the account and increasing a future earning’s potential.
Gerry Incollingo is the MD of LCI Partners which is a firm that specialises in accounting advisory, lending, wealth, property, insurance, and legal.
What are your top money tips for a couple considering breaking up? Tell us in the comments below.