Essential Tips on personal finance for the Divorced!!

When she was married, Jasmine never followed a budget. Be it paying bills, making investments or making big ticket purchases, it was her husband taking charge. Post their divorce, she had a tough time taking care of finances. She was devastated emotionally. She was not able to think rationally all the time and made mistakes. She forgot to pay the electricity bill. She would go on a buying spree to uplift her mood and then realise she had no money left for necessities. She would then borrow from her parents or friends which made her feel worse.

Take charge of your finances - Though divorce can take an emotional toll on you, you have to be practical regarding financial matters. You have to assess the money you have and your expenses. You need to focus on the essentials - food, shelter and a source of income. You cannot be lax about finances as you will fall in more trouble.

Rashmi and her husband parted ways after 8 years of marriage. They had a house and other assets. She was content that he allowed her to keep the child and did not ask for her share in the assets. She later on realised she let go of her rights!

Ensure you get your share – Any property purchased during marriage by the couple automatically makes the wife its part-owner. The partners can be reasonable in splitting the assets equally. For example, the house can go to one partner and other investments to the other partner. Moreover, Rashmi has the right to ask for alimony as she will bear the expenses of child support. It is important that the child's upbringing is not affected because of the divorce. If the husband’s income is very high compared to the wife's or if the wife is not earning, he can be asked to pay alimony. Even if you are working, you can get alimony for child support. If you are paying EMI for the property, ensure that you cancel the cheques and/or the auto-debit option immediately. Rashmi paid for a couple of EMIs after the divorce as she was too distraught to think of financial matters.

Daljeet got a bitter divorce from his wife. When he got his credit card statement, he was shocked to see that she had splurged using the add-on credit card. She had also withdrew money from their joint bank account. He could not do anything as legally she had done nothing wrong.

Be Practical -If the divorce is not amicable, it is important to do the following -

Block credit cards.

Close joint accounts.

Stop cheques issued for EMIs for assets used by spouse.

Cancel auto-debit facility for things used by spouse,

Change the nominee on insurance policies, mutual fund investments etc. if required.

It is important to keep the financial aspects separate from the emotional aspects.

If it is an amicable divorce -

Divide the assets – house, investments, antiques, jewellery etc.fairly

Determine where each of you will live after separation

Transfer money appropriately to individual accounts from joint accounts.

If you have children, take steps to secure their future.

Review your financial plan if you have one and change it as per the new situation in your life. If you do not have a financial plan, make one so that it helps you to set up your financial goals and steps to achieve them.

If the divorce is a bitter one -

Move on – It is easier said than done, but you have to move out of the self-pity mode. You have to take charge of your life and your finances.

Focus on your financial plan – Create a financial plan. Make a budget. Check the savings and expenses. Make sure you get your fair share of the money, assets etc. Ensure that you do not squander your savings. Make smart investments and establish an emergency fund. If there are children in the picture, make investments in their name. You might have to face some lifestyle changes depending on your income. Accept it and take steps to increase your income either through a better paying job, getting an additional source of income, updating skill levels to get a better job with better financial prospects.

It is not easy to recover from a divorce in which one has faced a raw deal. But dealing with it smartly with dedicated effort and patience most  people recover. They also get back their happiness.