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Keeping your finances afloat when your relationship sinks

StepChange Debt Charity
by Lovemoney Staff StepChange Debt Charity on 25 October 2010  |  Comments 7 comments

If your relationship has broken down, find out how to keep on top of your finances.

It’s Saturday night. You’re home alone with just the television and a cheap bottle of plonk for company. You have just broken up with what you thought was the love of your life and you feel like your whole world has just ended.

When a relationship fails, money is often the last of your worries, especially when you’re feeling emotionally and mentally drained. Or it could be that money problems were the source of the relationship breakdown – in a recent survey of 372 CCCS clients, 37% said that a debt problem had adversely affected their relationship with their partner.

If you're recently out of a relationship where finances were previously shared, but your significant other was in charge, you may be finding yourself clueless in the money arena, particularly for those that used to be 'kept'.

And it’s easy to underestimate the cost of maintaining two households after a break up - mortgage payments, insurance, rent, utilities and cars.

It’s important to understand you’re not going to have the same lifestyle as prior to the split and things are going to change financially as well as practically.

So whether the split was amicable or not, we’ve developed a guide with practical tips on how you can stay on track by yourself:

Draw up a budget

The first thing to do is to sit down and work out a realistic and sustainable budget. If it’s the first time you’ve had to do this, use an online budgeting tool to help you. You can also take a look at the budgeting tab on the lovemoney.com online banking tool which allows you to set a monthly budget for any specific category (such as petrol and fuel).

If you were in charge of the finances before, be prepared for your new budget to look very different to your previous budgets.

What are you entitled to?

It’s advisable to get a benefits check as soon as possible. It could just be something as simple as a 25% single person discount for council tax, or you could now be entitled to a lot more, such as tax credits and housing benefit. 

Your local Citizens Advice Bureau can assist you with this and the Consumer Credit Counselling Service (CCCS) also have a dedicated welfare benefits team. It can be a tricky subject to approach, but if the kids are staying with you, try to make an arrangement for child support if you can.

Keep your priorities are up to date

It’s really important to keep on top of priorities, such as your mortgage or rent, council tax and utilities. If your partner took care of these in the past, contact your lender, council or utility provider to make sure there aren’t any arrears. If you are behind, contact them as soon as possible to make an arrangement to repay them within a reasonable timescale.

Joint accounts

Try to close or remove your name from any joint accounts. It’s even more important to remove your partner if they are an additional card holder to prevent them from spending at your expense! 

Banks may be reluctant to remove your name from joint accounts where there are existing debts or arrears so try to negotiate with the bank and your ex to make sure you’re not the one left paying the debts.

Check your credit file

This could bring up some surprises if you’ve been blasé about joint applications for credit, but the sooner you face up to your finances, the sooner you can start to gain control. This credit explained booklet tells you all you need to know about credit reference files and how to apply for yours. You can also read 10 steps to a perfect credit record.

If you do find that you’re behind with bills or now realise that you haven’t got enough money coming in to meet those ever-increasing outgoings, use the CCCS online debt counselling tool Debt Remedy to help you get back on track.

Hopefully the pain of the breakup will ease in time – just make sure it doesn’t cause a separation from you and your money.

Have we missed any tips, or do you have any experiences to share? Post your thoughts below.

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Comments (7)

  • Trixielooloobell
    Love rating 7
    Trixielooloobell said

    I divorced my husband in 2008. He brought nothing to the marriage other than a loving personality and a fun loving nature. In the ten years we were together I paid for him to complete his education, funding further and higher education which he dropped out of.  I funded him sitting on his backside for 5 months refusing to get a job as he was grieving for his mothers death (co-incidently my own Mum died ten months after his and whilst distraught I found it possible to return to work within the allotted compassionate leave period offered by my work). I could go on about what I financially contributed but you get the ieda. When I met someone who I felt more closely met my outlook and desires from life I called an end to the relationship and asked for a divorce. I had worked continually for the ten years, I had paid for everything, I owned the home we lived in as I had bought it outright with my Mum and Dad (a modest little terrace house in a not too horrible south London suburb), the car my husband drove and the clothes on his back. I indulged his every whim and got myself into debt trying to give him the quality of life he wanted and I wanted him to have.

    When we split everyone sounded the alarm bells. I sought out a good solicitor and the advice she gave me was don't just expect everything you brought to be yours to walk away with and the rules people go on about with 50/50 split just because you're married are bunkum. She told me that at the end of the day we could go to court we could put forward the facts and hope that my ex was sent off with the clothes on his back and he should be grateful but she said in her experience nothing is cut and dried and the magistrate can and sometimes does come completely out of left field with absurd rulings.

    I offered to pay my husbands solicitors fees for the divorce, after all I wanted it, and the advice from my solicitor for the most cost efficient and least heartbreaking way to resolve matters was to use a mediator. It cost about £300 all in for the mediator (with solicitors fees on top of that for myself and my ex) but I would urge that if things are amicable to try and use this to come to a joint decision.

    My ex was very angry that his standard of living would drastically reduce (but to be honest I couldn't support it much longer if we'd stayed together) and he even demanded half of my share of my Dad's house that my Mum had left me. This is pretty drastic but all I can say is don't assume that the legal system will see "sense" in the same way you do. I ended up agreeing that I would mortgage my share of the house I owned with my Dad, i.e. marital home and then I would pay off the debts that were run up on the games consoles, wide screen TVs and cars (my ex bored of his motors easily and there was always a good reason to get another car for him) and then what was left I offered to go 50/50. This amounted to just under £50k for me to pay into his bank account. The mediator thought this was rather generous in the circumstances but it was important that things ended amicably after all I married this man because I loved him and we had a lot of fun in our ten years together and he was my best friend so please try to remember that, when people are hurt they lash out.

    I recommend a good solicitor and mediation.

    My Dad died a couple of months ago, my ex has started playing the "I'm skint" card, knowing that I am the sole executor of my Dad's estate but I'm just glad I realised in 2008 that we were not right together.

    My ex husband and I were both in our 30s when we split with a similar earning potential and no kids. This does make things a lot simpler so I can't speak for those break ups where children are involved.

    Report on 27 October 2010  |  Love thisLove  0 loves
  • sodit
    Love rating 127
    sodit said

    When splitting accept that if you go to law there will be less to go round. Try to cooperate. Don't be greedy. This minimises both the financial and the emotional trauma of the separation.

    Report on 27 October 2010  |  Love thisLove  0 loves

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