The splitting of shared finances which once serviced one family in order to support two single parent families, will always come at a cost. The end result will leave both parents with monetary challenges they may not have experienced when partnered.
For some, it feels like their financials have gone backwards. For others, it feels like they are having to financially start over again.
We understand this and also appreciate how frustrating it can be.
For this reason, we have put together some simple suggestions to help you financially recover from your separation.
DOWNSIZE YOUR HOME
Unless you have arranged to stay in the family home following your separation, you’ll be looking for a new home.
Now is a great time to consider a downsize.
There will be less of you and, if you are co-parenting, your children may only live in the house part of the time. Could you manage with less space?
Downsizing your home means paying less for rent or your mortgage, as well as cheaper utility bills and maintenance costs.
Further reading: 8 Positive thoughts if you are downsizing your home.
START A BUDGET
Now is the perfect time to get budgeting. Everything has changed in your financial world and it is really important to know where you stand.
This is as simple as listing your incoming and outcoming money each month. Once you know this, you can make changes to ensure it balances and decide on manageable financial goals.
ASSESS YOUR EARNING ABILITIES
You will likely know what you are earning each week, but is it enough to meet your outgoing costs with enough room for financial emergencies.
If not, you will need to assess your earning abilities.
This can include:
- Asking for a pay rise if you are due one (or you feel you deserve one!)
- Finding better paid work
- Considering more work
- Retraining for another career or another level of your current career
- Think of a way to supplement your income
You might not be able to increase your earnings straight-away but having a plan for the future is important to keep necessary cash flowing.
PULL BACK ON SPENDING
It can be difficult to adjust to living on one income, especially when it comes to spending.
Doing the afore-mentioned budget will help you monitor your spending habits and decide whether change is needed.
Such changes include:
- Less takeaways, such as coffee, food
- Cutting back on luxuries, such as massages and meals out
- Finding cheaper utility providers
- Cutting back on your children’s extra-curricular activities
Creating new, healthy spending habits now is important but they need not be forever, just until you get back on your financial feet.
KEEP AN EYE ON YOUR SUPER
Superannuation is a significant factor in property settlement. If you have recently been through this process, you’ll be aware how much you have in your super fund.
Have you done a recent search for lost super? And are you using the best super fund available to you?
When comparing super funds check:
- Fund fees, the lower the better
- Fund performance
- Investment options
- Insurance options
- Extra benefits
Some people come out of their property settlements with a lump sum of money. If this is you, it’s important to use it wisely.
Do your research and get expert support so your money works for you. This could come in the form of buying property or investing in the share market.
Even if you don’t have a lump sum to play with, getting financial advice for future investment plans is a wise move for the long-term future of you and your children.
Saving might be the very last thing on your mind as you navigate your financial path as a newly single parent. Yet, the sooner you begin saving, the better.
A good starting point is to find an area where you are overspending, stop the overspending and use the money saved to start a new savings account.
You will be surprised how quickly your savings build and this will give you the incentive to save more.
It’s also good to have a savings goal. Decide what you are saving for as this will keep you committed and on track.
HAVE A FINANCIAL PLAN
Once you have taken care of the day-to-day financials for your new single parent life, it’s time to look to the future.
Where would you like to be in one year, five years, ten years? What financial goals do you need to set yourself in order to get there?
If you are unsure where to start, find an expert to help you. A good financial adviser will guide you to reach your goals in the least amount of time, as well as providing accountability.
Remember, as a single parent, you are 100% in control of your financial situation. The habits you set for yourself now will stand you in good stead, not only for financial recovery, but financial success moving forward with your new life.