While marriage increasingly isn’t for everyone, steps like opening a joint bank account can become milestones in long-term relationships as they show a willingness to commit. Cohabiting couples are actually the fastest-growing family type in the UK. But if things go wrong for whatever reason and you break up, you’re likely to have a new financial situation to adjust to.
Money may be the last thing on your mind if you’re in emotional turmoil. But dealing with these matters practically can help bring a sense of closure – particularly if they were partly to blame for your separation. Experts cite money as one reason behind an increase in break-ups during the pandemic.
So how can you start over financially after ending a long-term relationship?
Assess your shared financial assets
You’re likely to have some big decisions to make regarding shared possessions and assets.
If you own a home together for example, will one person move out or will you sell and split the proceeds? With furniture, appliances and other household items, the owner will keep the items they contributed, while shared possessions can be split equally by value.
Joint bank accounts can be closed with each person receiving an amount that’s appropriate to what they contributed. When it comes to shared subscriptions, starting afresh with individual accounts is usually the easiest approach.
Examine your new financial state
Whether you earned an equal amount to your partner or not, you’ll both be going from two incomes to one. It’s often the case that one person was more switched on to the financial side of things too. Whatever your current working status or level of know-how, you’ll need to take stock of your personal finances.
That could mean collecting bank statements and payslips, as well as assessing bills and your credit report. It’s only with full visibility of everything that you can truly start afresh.
Create a new budget
Here’s where you can begin planning your new way of life. Create a realistic budget based on the information you gathered in the step above and assess any areas you can relax or cut back in.
If you’re not in a position to afford payments once covered by your partner, you may have to bite the bullet and go without. Having enough money for essentials like bills and food should be your main priority.
With solid foundations in place, now you can figure out your immediate priorities as well as long-term saving goals.
Areas to focus on in the short term could range from organising new insurance policies to setting up savings accounts and even buying furniture. Your larger financial aims are also likely to have changed and could now include moving to a new area or buying your own car, for example.
Money is often the cause of tension with those we love. But by separating the two and breaking away sensibly, you can approach your new situation with confidence.