Welcome to the fourth section of the course. We will be taking a closer look at How to Separate Your Finances.
Upon separation, you and your former partner will have to un-mesh your finances and decide what to do about child support, spousal or partner support, and property division.
Separation can be costly. One of the great myths of separation is that it is cheaper to live as a single person than as a couple. For most couples, this is not the case at all. It is more expensive to live separately.
After separation, expenses that you didn’t think about may begin to surface – things like:
The pot of money to pay expenses doesn’t increase, but suddenly there are new expenses that need to be paid. Many people suffer from “sticker shock” when they realize how expensive running two households can become.
Short-term strategies can help reduce overall costs and decrease anxiety over money. For example, parents can make arrangements to share clothing, toys, food and other items in the short term.
Temporary agreements, can be used to help manage the finances in the short term. It takes time and money to separate a household. It makes sense to create short-term plans and make interim agreements to help provide financial stability for each of you, and for any children you have together.
Temporary agreements for support can take into consideration the extra costs of one person having to set up a separate residence. Interim agreements may also be written to cover the cost of the mortgage or a car payment until support is formally put in place.
Temporary agreements may also provide an amount greater than required under law. This may help one person to adjust to the new reality and cover expenses for temporary accommodation, to look for work, or buy a car.