Separation and divorce can be a very stressful time. Your entire world can feel like it has been turned upside down. The future that once appeared certain is now unclear.
It can feel overwhelming, especially if it is unexpected. There is so much to do and you may wonder if you can even face it. Where will you live? What about the children? What about the money? Will you be alone?
You may find yourself on an emotional rollercoaster with feelings of grief, sadness, disappointment, anger, embarrassment, etc. It can feel like a ride that never stops and can quickly take its toll on your emotional wellbeing.
This is clearly not the time to make rash decisions, but decision must be made nevertheless.
When it comes to your finances, there are a few important steps that can ease the stress. Reducing financial stress will help you cope better and focus on the other important matters at hand.
Secure your income flow – do you have a regular income to meet your daily living expenses? This can come from work, Centrelink, child support, your ex-partner, savings, etc. The goal here is to reduce stress by ensuring you can meet your ongoing financial obligations.
Get organised and take control – do you have your own bank account, credit card, estate plan (Will), insurances, etc? Are the bills you are responsible for in your name? Are those of your ex-partner in their name? You don’t want your ex-partner spending your money or burdening you with debt.
Preserve your existing assets – you will probably come out of this with fewer assets than you had when you were together as a family unit. The key here is to preserve your base to provide a level of security as a platform for the future. You may not yet know what you want in your future. Until you do, it may be wise to hold your assets where they are safe and accessible (security and liquidity). You might not want rush into long-term growth investments when your immediate priority might be to purchase a home.
Know your objectives before investing – don’t rush into an investment just because someone tells you it’s great. Know the reasons why you are investing and make sure your investments are suited to your objectives.
Is your objective:
Long-term capital growth;
Centrelink entitlements; or
A specific purpose (eg purchasing a home)?
Everyone’s needs are unique to their situation. It is important that their financial strategies address their own specific needs rather than simply investing in a one-size-fits-all financial product that may not be suited to their objectives.
This is a good time to speak with a professional financial adviser. Just be sure your adviser represents your interests and not those of a financial product provider. Find an adviser that you like, trust and whom you believe understands your situation and objectives.
There is significant change in front of you, but you do not have to face it on your own. If you would like some help, feel free to give me a call and let’s have a chat. There is no cost or obligation and at the very least you will walk away with a better understanding of your current situation and what you can expect in your future.
Information contained within this document is of a general nature only. Individuals should not act upon any such information without prior consultation with a qualified financial adviser to ensure that any action meets their personal financial needs, situation and objectives. No responsibility is accepted for those persons acting on information contained herein and persons do so at their own risk.
Responsibility is disclaimed for any inaccuracies, errors or omissions. Particular investments or insurance policies are neither invited nor recommended. All expressions of opinion are published on the basis that they are not to be regarded as expressing the official opinion of any other person or entity unless expressly stated.
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