Separation is an emotionally stressful time for all parties. For women, though, the financial impact can be especially tough. Many face unique challenges like wage gaps or career breaks due to caregiving. When a partnership ends, it can bring unexpected financial uncertainty.
Even though more women are becoming aware of the need for solid financial planning during these times, many still find themselves unprepared. The process of untangling shared assets and resetting financial goals can be overwhelming and complex.
This guide aims to simplify the key financial considerations for women going through a separation, offering practical advice to help them achieve financial stability and independence. It’s a difficult time, but by simply putting one foot in front of the other, many women find a happier and more fulfilling life on the other side of separation.
The first 3 steps
Step 1: Be proactive and build a support network.
The build-up to a separation is usually long and draining. The warning signs are always there, whether we choose to acknowledge them or not. As soon as you believe separation is a distinct possibility, be proactive and start establishing a support network.
That support network should be made up of friends, family and a team of professionals, such as:
• A family lawyer
• A financial planner
• A psychologist/counsellor
• A conveyancer
When couples separate, there’s usually a lot of financial untangling to do. For a lot of women, especially those who have been victims of financial abuse, getting access to financial records or basic information about insurance policies and wills can be difficult.
The best thing to do is get the ball rolling early, before separation proceedings have officially begun, and get a team around you who can assist with information gathering and know what steps to take.
Step 2: Work through these financial considerations
Broadly speaking, now is the time to get a clear understanding of your monetary flow – how much is coming in, how much is going out. This way you can set a budget for yourself and stick to it; you don’t want to exacerbate what is likely a financially hard time as it is.
Specifically:
• Review your wills and estate. Separation can greatly change the way things are awarded at time of death. Make sure the right beneficiaries are being rewarded, and assets are in the right places to help with taxes upon your passing.
• Understand your superannuation. Often, as part of a separation, super is split. How will that impact you? Does that leave you with more or less super? How does it affect your retirement plans?
• Review insurance policies. Policies that are in you and your partner’s name will have to be altered. In some cases, you will need new policies for a car, a house, even your income. Make sure you’re protected and that your family is protected too
Step 3: What are you entitlements?
There are two things to consider here: interim financial support, which can help you as you go through the separation process, and more long-term financial supports. These are really important initiatives that can really make a difference to your financial situation. If you’re not aware of them, however, you can’t claim them. That’s why it’s vital that you speak to a professional in this area, such as a family lawyer.
Interim support measures include:
• Interim spousal maintenance
• Child support
• Centrelink payments, such as crisis payments and income support
Long term considerations:
• Property settlement entitlements
• Possible superannuation entitlements
It’s really important that you speak with a financial adviser regarding these long-term entitlements so that they are set up to help you into the future, not just now.
What you need to think about
It’s an unfortunate reality that many women find their resources after separation simply aren’t sufficient. Generally, women are the primary caregivers in their households and often work part time. This means fewer resources going into super and retirement savings.
After separation, women often see a major decline in income and less surplus money. Some might have to return to the workforce, or change from part time to full time. Either way, you need to think about your goals and whether you’re still on track after separation. If not, what needs to change? It’s important that goals are set now and you think beyond ‘today’.
A financial adviser can help you draw up plans designed to achieve these goals so that you live the life you want – not be a slave to it.
Start acting before you leave
We cannot stress enough how important it is to act now and put plans in place before you leave your partner. A financial adviser or a family lawyer can help you put plans in place so that you have financial security and a support network ready before separation occurs. This is especially important for women who have been victims of abuse, whether financial or otherwise. Your safety and security is paramount. Think about what’s best for you, and reach out to people who can help you secure the future you want.
Set up the post-separation future you want
The financial advisers at Pride Advice have worked with many women going through separation. It’s a stressful time and hard to stay on top of things. That’s why it’s so important to have an advocate in your corner. We can be that. If you’re going through a separation, or thinking about it, or know of someone else who is, don’t hesitate to reach out and start building a support network today.