|
The Top 5 Money Mistakes Separated Couples Make.
Unfortunately, separating from your spouse often means separating from your house. Avoid these common money mistakes or they’ll rob you of your chance at a new life.
Mistake #1 – Emotional Spending
Whenever we are hurting it is tempting to turn to physical things to heal our emotional hurts. But they cannot heal the hurts, and they usually make finances worse. Sure, you feel a short-term hit of freedom, control and comfort. But when the credit card bill arrives those fleeting feelings are very quickly replaced with stress and anxiety.
Better budgeting and limits on your luxuries will help you to spend smarter and keep control of your financial future. Think twice before splurging on new shoes, alcohol, holidays, or plastic surgery.
Mistake # 2 – Financial Surrender
Aim to be involved in all financial decisions. Don’t be a doormat. Stop yourself if you feel like saying “I don’t care about the money, I just want …” Women in particular will often channel all of their energies into one goal, like keeping custody of the children, and lose sight of the financial considerations.
Weigh up the advice you receive from all sources to see if they are aware of the financial impact of their recommendations. This advice alone, may have saved Regie’s resources.
Remember, lawyers are legal experts, and counsellors are relationship experts, not financial experts. For example, some people fight to keep their dream home, only to find they don’t have the income necessary to pay the associated bills, so it quickly turns into their worst nightmare.
Mistake # 3 – War
On the other hand don’t succumb to revenge. Movies like “War of the Roses” and “Intolerable Cruelty” depict how petty and aggressive fighting over finances can become during separation and divorce.
Your aim when you disentangle your joint finances is to split what you both currently own between the two of you. Unfortunately, when you start fighting each other, you forget that you are both losing out on the value you have. Engaging an overly combative lawyer as a weapon against your partner can also mean that the bulk of your money ends up in the lawyers’ pockets and you both miss out.
Mistake # 4 –Choosing Advisors
Couples need a separate accountant as well as separate legal counsel. Andrew Ferguson, an accountant with M J Consulting, cautions that “There is a huge conflict of interest in acting for both spouses when they are going through a divorce - even where the split is an amicable one.”
Angela Brown, a financial planner with Genesys Wealth Advisors, warns separating clients to be wary of others hiding or removing large sums of money, especially with the growth of Self Managed Superannuation Funds (DIY Super). “It is not only ex-partners who have been known to run overseas with money from SMSF’s – there have also been a few so-called financial planners and accountants involved in these acts of theft.”
It’s never too early to get good advice. Steve Collins, from The Mortgage Bureau in Coffs Harbour, recommends clients see him “BEFORE they get down to the nitty-gritty with their Solicitor for finalisation of the separation. They should see us sooner rather than later!”
Mistake # 5 – Major Change
Resist temptation and postpone major decisions for at least twelve months after separation. The first birthday, anniversary, Christmas and so on can be really rough rollercoasters of emotion. If you’ve felt restricted in the relationship, you’ll want to exercise your freedom as much as possible too. But the temptation of taking control over something, anything, even if it is totally unrelated to the problem, is not a solution.
By all means create a wealthy future for yourself by investing some money in your dreams. But allow your balance to build up and your brain to bounce back before you actually take the plunge on major changes.
Article supplied by Aussie Money Coach |