One of the reasons divorce is hard is that people share more than just a bed when they are together. They usually also share their finances. However, divorce means one income, which can be hard for both parties.
So how do you uncouple yourself and slowly get back on your feet?
Hayley Parry, facilitator of 1Life’s Truth About Money initiative, has the following advice:
Set up an emergency fund
A priority for a newly single person or parent should be to put in place a financial buffer – an emergency fund. Since there is no partner to help weather financial emergencies, it is now your sole financial responsibility. So, if possible, use part of the settlement amount from the divorce to start such an emergency fund. This will ensure that you have enough money should an emergency occur. Start with R5,000 and then slowly work up to 3 months’ gross salary.
Build or rebuild a good credit record
You will be required to build your own credit record for you to be able to purchase a house on your own, for instance. If you were sharing credit accounts with your former spouse, make sure you close them as they will show on your credit report. If you can afford to get your own accounts, it is advisable to do so because this will show creditors that you can hold your credit responsibility.
Regain a good savings account
Now that you will be your own rock, it is important to start getting into the habit of saving. You need to think of the future.
Make an affordable housing arrangement
You may be required to find new living arrangements where you need to consider how much you can afford versus what house you would like to live in. Realistically, you need to consider rental, bond and utility rates.
Renting may be a cheaper option since maintenance, levies and rates will be the owner’s responsibility. This will give you extra cash in hand while learning to stand on your own again.
Update your will and policies
It’s critical that you update your will and the beneficiaries on any of your life insurance or investment policies and products, to ensure that your former spouse is no longer the beneficiary if something were to happen to you.
Get a financial advisor
A financial advisor can help you get your financial life back on the single track again by advising you on how to manage your divorce settlement and on financial products more suited to your new life.
Regaining your financial independence is a slow process, but with hard work and patience, it is achievable.
This article has been prepared for information purposes only and it does not constitute legal, financial, or medical advice. The publication, journalist, and companies or individuals providing commentary cannot be held liable in any way. Readers are advised to seek legal, financial, or medical advice where appropriate.
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