Saturday, September 20, 2008

Coping Financially After a Separation

There’s a lot more to separation that learning to deal with a new emotional state or making arrangements regarding your children. In practical terms sorting out your finances can be one of the trickiest areas.

If you and your ex have any joint bank or building society accounts, you’ll need to close them and re-open as individual accounts.

The simple fact is that you’re almost certainly going to have less money than you did before. Where you’d probably been used to two incomes, there will now be only one, and that will be further depleted by whatever you have to pay in maintenance for your child, which can take a serious chunk – possibly a quarter – off your net income.

Living With Less

The very first thing to do is review your finances. There might have been direct debits relating to your old relationship that no longer apply (phone bills, Sky or cable, etc). Make sure you cancel these.

If you’re paying into a pension or an ISA, take a look at how much you’re contributing and consider reducing it. In the long run you’ll want to re-assess, but in the short term, you can probably use the cash for day-to-day bills.

Take a look at exactly what you need to survive each month – rent or mortgage, council tax, heat, electricity, food. There might be very little left over, so you’ll need to set yourself a budget, and make sure you stick to it. If at all possible, try and save some money each week, even if it’s only £5.

Ideally, you should have a cushion of money in the bank, the equivalent of three to six months’ salary in case of emergencies or unemployment. However, in a lot of cases that simply isn’t possible, so saving slowly – and making sure you don’t touch the amount unless it’s absolutely necessary – will help.

If you smoke, this is the perfect incentive to stop – at 20 a day you’ll be saving well over £100 a month, which you can use for other things.

How to Make More Money

It might be worth dusting off your CV and applying for a better job where you can earn more money. You can also look into part-time jobs that will work around your regular hours – but make sure you still leave time for contact with your children. With a part-time job, not only will you be making extra, but you’ll be around a new set of people, which can expand your social life, as an added bonus.

What Not To Do

One thing to avoid is using your credit cards. It might seem like a good option when money is tight, but it’s one that will come back to haunt you. You can quickly find yourself struggling in debt, and forced to turn to consumer credit counselling to extract yourself. Cut up most of your credit cards to avoid the temptation. Keep one for absolute, unavoidable emergencies.


One side effect of having very little money and constantly struggling to get by can be depression. If you find yourself succumbing to this, go in and talk to your GP. The doctor should be able to suggest remedies, including counselling, that could help alleviate your depression.

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