Divorce is often not only emotionally traumatic but financially can leave you starting all over again. There are some key issues I’d like to share that we address when working clients. If you’ve been through a divorce here are some steps you can take to get your finances back on track:
- Reassess your goals. This may take some time but sit down and think about what is important to you. Write them down, they may change but at least get them down on paper.
- When you are back to one income budgeting becomes more important, you need to know exactly what money is coming in and what is going out.
- Decide what type of property is right for you now – unit, house, townhouse. Maybe you should rent until you decide what suits you best given the high entry and exit costs. How much can you borrow and how does that affect your other goals eg. retirement.
- Review your super contributions and make sure you understand what it is likely to be worth once you can access it. If you only have a small super balance or have just lost part of your balance in a settlement you may need to increase your contributions.
- Protect your income – if you get sick or injured and can’t work, how will you pay the mortgage and other living expenses. Income protection insurance is critical.
If you can’t do this on your own – seek some help. The sooner you get started, the sooner you’ll be back on track financially.
Dave Rae – Director at Beames and Associates Accounting & Financial Services Pty Ltd.