The end of a serious relationship is never easy; whether you are married or not, and/or have children together. It’s a time often filled with a lot of emotion and can leave you feeling exhausted and confused. Unfortunately, it can be even more difficult to navigate if you have shared finances and assets.
In this blog, we share some insights and tips to help you navigate the financial waters during, what can be, a challenging period of your life.
1. Assess your accounts
Start by reviewing any joint accounts and liabilities that you may have. It's crucial that you understand which accounts are jointly held and what assets and liabilities are shared, such as any debt.
If you can, speak with your ex-partner and discuss what to do with the money in the joint bank accounts. You’ll also need to consider what payments and bills are linked to the account(s) and how these will need to be dealt with in the future.
2. Update your personal information
If you do have joint accounts, you’ll likely want to close them or transfer the ownership. To do this, speak with your bank to discuss the best way to manage these accounts post-separation. If the accounts had beneficiaries associated to them, review and update them according to your wishes. This ensures that your assets are distributed as you intend in case of unforeseen circumstances.
You may also have moved out and now have different contact details. Ensure that you notify the bank of your updated contact information, including your mailing address, email, and phone number. This step helps to avoid any communication gaps and ensures that you receive important financial statements and updates.
3. Establish individual accounts
It’s possible that you only had joint accounts during the relationship, and if that’s the case you’ll need to open individual accounts so you can manage your finances independently. Contact your bank to discuss closing joint accounts and find out what the process is if both account holders need to approve the closure.
Closing joint accounts can help prevent any negative impact on your credit score. Once you have your own solo account set-up, you’ll be in a better position to start dealing with splitting assets. Having your own bank accounts provides clarity and helps you regain control over your personal financial situation.
4. Monitor any joint debts
As with any debt, you need to address joint debts responsibly. Try and work with your ex-partner to determine how to handle any joint loans or credit cards you may have – and this includes a home loan.
You may need to close joint credit card accounts or refinance loans to remove one person's responsibility. If possible, be proactive in discussing and resolving these financial ties as putting it off can lead to further complications down the line.
5. Reassess your budget and expenses
A separation often brings about a change in income and expenses. Take some time to reassess your budget based on your new financial situation, which is likely to be just one income.
Be sure to prioritise essential expenses, such as rent, utilities, debt and food costs, and then make adjustments where necessary to ensure financial stability during this transition period. At the beginning of a separation there are a lot of changes happening, so if you can set yourself a budget and stick to it during this time it could be very beneficial once things start to calm down and you’re faced with your new normal.
6. Seek professional advice
It is perfectly acceptable to consult with financial professionals, such as accountants or financial advisors, to get personalised guidance on your specific situation. They can offer insights into tax implications, asset division, and long-term financial planning.
In more complex situations, seeking legal advice is advisable. A legal professional will be able to provide guidance on asset division, spousal support, and any other legal implications related to your financial separation.
Separation is undoubtedly challenging, and managing finances can add an extra layer of complexity to a stressful time in your life. By taking proactive steps, working closely with your bank, and seeking professional advice when needed, you can regain control of your financial situation and pave the way for a more stable future.
Resources you may find useful:
If you’re in crisis or need support, assistance is available:
- P&N Bank Financial Hardship team: 1300 591 276
- Financial Counselling Australia: 1800 007 007
- Family Relationship Advice Line: 1800 050 321
- Lifeline: 13 11 14
- 1800RESPECT: 1800 737 732 (National sexual assault, domestic violence counselling service)
Banking and Credit products issued by Police & Nurses Limited (P&N Bank) ABN 69 087 651 876 AFSL/Australian Credit Licence 240701. Any advice does not take into account your objectives, financial situation or needs. Read the relevant product T&Cs, before acquiring any product in considering and deciding whether it is right for you. The Target Market Determinations (TMDs) are available on our website or upon request.