Being in a relationship certainly has its advantages. Someone to enjoy life with. Someone who inspires you to be better. Someone who sets goals with you. While all that is good and fine, the reality is that not all relationships last.
If you’ve gotten serious with your partner and it comes to an end, you have to separate finances after a break up.
It’s the ugly side of relationships, but it happens. It’s not fun to undo a merge of feelings, finances, or material things. However, it can always be done. I’m sharing 5 ways to separate finances after a break up.
Whether you are in a relationship that’s working, or recently split from your partner, these steps will help you if you ever need to separate joint finances.
Ways to Separate Finances after a Break Up
Review Joint Assets and Debts
As hard as it may be, when you are looking to separate finances after a break up, you have to put your emotions aside. You’ll both have to come to the table with a logical state of mind and look at your joint assets and debts. Here are a few questions to ask to help you determine what may be joint assets and debts:
Did you have a joint bank account (meaning both names are on the account)?
Did you have a joint savings account?
Did you open any credit lines or loans together (again, both names on the debt)?
If you answered yes to any of the questions above, you’ll have to think about next steps for each account. If you have a joint checking and savings account, what are you going to do with any balances in there? I’d love to say that 50-50 split is the fair way to go, but it depends on who contributed more to the household.
Another good plan for any balances in the joint checking or savings accounts could be to pay off any joint debt. Ideally, you’d want to pay off any joint debts as soon as possible. If not, you’ll have a lingering responsibility between you and your partner, which could keep the lines of communication open longer than you’d like.
Open Separate Bank Accounts
The next important step in the process of separating your finances after a break up is opening separate bank accounts
. You may already have separate accounts and won’t need to open any new ones. My point here is that you need to get back to accounts that are solely yours.
If you have any current transfers or direct deposits going into your joint accounts, you’ll want to switch them to your personal bank accounts. Trust me, you don’t want to skip this step and deal with the hassle of getting your money back.
Create a Game Plan for Joint Responsibilities
I touched on this above, but you’ll want to create a game plan for any joint responsibilities that can’t be taken care of quickly. This applies to any joint debts that will take some time to pay off.
Will you both contribute an equal amount to the debt each month? Who’s responsible for making the actual payment? When will the debt be paid by either side?
Again, these are not ideal questions to deal with, but you can’t avoid them. Joint debts will hurt both parties if they aren’t handled in a responsible way.
You both may have other responsibilities that require financial means, such as kids, pets, property, and anything else of value that needs to be handled or separated. Who will take care of the responsibility? Will each party contribute equally? Will joint things of value be sold and profits split evenly?
Establish Communication Rules
As you are going through your joint responsibilities and coming up with a game plan for tackling everything, you’ll also want to establish communication rules. What happens if someone can’t pay their portion of a debt? What happens if someone loses their job?
Ideally, you’ll want to set rules around communicating things that could mess up the financial game plan. Though you may not want to share any details of your life after a break up, if it can impact your joint responsibilities, you will have to.
Have an Individual Plan
Now, this step isn’t something you both have to discuss together. However, this step needs to happen as you are separating finances after a break up.
What is YOUR game plan?
How are you going to take care of yourself? This can be hard to think about, especially if you were used to being supported by your partner.
You’ll want to make sure you have a few things figured out for yourself. Who paid for health insurance? If you were on the same plan, you’ll have to make some adjustments. Make sure your ex is included in any decisions that may affect them.
If you lived together, you’ll need to think about moving. Where will either of you go? Will someone stay and the other leave? Do you need to have money saved for expenses associated with moving? What about the security deposit, especially if someone is staying?
Having an individual game plan for yourself, as soon after the break up as possible, will make for a smoother transition process. I know it’s not fun to think about these things before, during, or after a break up, but it’s so important to your solo success.
Moving Forward Solo
Life after a break up is possible. As hard as things may seem while you’re going through the break up, things always get better.
I may not know you personally, but I do know that you’re a strong, independent individual! You can get through anything – what doesn’t kill you makes you stronger. If you need help, support, or guidance during your financial separation, make sure you get it! Take advantage of friends and family in this transition time.
You can also schedule a free consultation with me, and I’ll walk you through setting up everything for taking care of yourself financially.
Related: Relationships & Finances!
Break ups are hard and separating joint assets and debts can make it much harder. Having a plan for the separation will make life so much easier! You got this!
Have you ever been through a break up that required a separation of finances?
Post a comment below to share your tips and experiences. Your words may help someone else going through a break up!
The CGS Team