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BE EMPOWERED WITH YOUR PERSONAL FINANCES
05 BE EMPOWERED WITH YOUR PERSONAL FINANCES
The unfortunate reality is that two families cannot live as cheaply as one. For a start, there will be two sets of housing costs, which means double rent, mortgage payments, electricity, hot water...The list goes on! So, what does that mean for a separated family?
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◊ Both new families will have to budget. Until you can live within your desired means, budget stringently. Not having enough money will only compound the stress of your separation. ◊ Check your entitlements. One or even both of you may be entitled to a pension or similar payments. If you received them before separation, then you will need to notify Centrelink or the Government department in charge of your payments. ◊ Be honest about entitlements. Report truthfully to the pension department about how much time the children spend with each parent respectively. ◊ Consider new employment. If you were not in the workforce prior to separation, then you may need to apply for work. If you have no current, marketable skills, then you may like to sign up for further education or training as a stepping stone towards paid employment. ◊ Offer temporary financial support. Did you financially support your former partner before the separation? Do you earn an income that provides more than you need? If so, you may consider paying some spousal maintenance in the interim while your ex-partner finds employment or retrains. ◊ Accept that when you separate your assets, your financial circumstances may change. ◊ Have a debt reduction plan. When dividing your property and debts, you may need to develop an interim strategy.
It may be more important to deal with immediate concerns, such as outstanding bills, before addressing 100% of your shared finances. If you are following the steps to separating well, the above processes are more likely to be smooth, amicable and peaceful. You can negotiate via face to face talks, telephone, letters or emails. If you’re struggling to communicate well or reach an agreement, you may also like to try mediation or skilled help, including solicitors. Court is a last resort and the least pleasant option for all concerned.
What is it? This is a division of all your shared assets, liabilities and superannuation.
Property settlement
According to the Family Court, there are five steps to property settlement:
1) Step One: Does there need to be a change, or can everything remain where it is? If you simply share joint ownership of a home, then a settlement will be necessary.
2) Step Two: What are the assets, liabilities and superannuation, and what are they worth? Make a list to quantify this accurately. Label each item according to who owes or owns it. This can be a little complicated as each item may be attributed to: ◊ One of you. ◊ Both of you. ◊ An associated entity i.e. company, trust, partnership or superfund. ◊ Someone else’s name e.g. your mother or father. Take the time to go through this in detail now, in order to avoid dispute down the track.
3) Step Three: What are the contributions to those assets, liabilities and superannuation? Keep in mind that contributions may be financial or non-financial in nature. They may
