Financial Planning

How to start again financially after a break-up

20 September 2021 | Posted by Frankie Jones

When you’re in the midst of a break-up, money probably isn’t the first thing on your mind. But it’s important to make sure you’re financially secure for this next stage of your life. If you’re not married, this can make things easier as it’s likely you’ll be less financially tied together. Even if you only share a few monetary agreements (like phone bills) it’s best to split these as soon as possible. Keep reading to learn how to start again financially after a break-up.

Take things step by step

First thing’s first: take this one step at a time. Trying to juggle too much life admin at once can be overwhelming. It make the process of learning how to start again financially after a break-up even more difficult. It’s best to prioritise the most important tasks and work backwards from there.

Work out what you share 

Get a pen and paper (or your laptop) and write a list of everything you share together – financially speaking, that is. 

For example, if you live together, is the tenancy agreement or mortgage in both of your names? Do you have a joint bank account? Did you buy a pet when you were together? 

Once you have a concrete idea of what you share financially, you can make a plan to tackle these one by one.

Decide what you’re happy to compromise on

When you’re dividing up your stuff, it’s possible that you’ll both want to keep some of the same stuff. So now’s the time to decide what you’re willing to let go of and what you won’t budge on. For example, maybe you’re happy to let them keep your joint Netflix account but you won’t agree to let them keep the phone contract in their name.

Check your credit score

If you’ve ever taken out a joint loan or any form of debt with your partner, their actions could affect your credit score as well as your own. For example, if they go bankrupt or miss any payments. That’s because your credit report will also show the name of anyone you have a financial association with.

It’s crucial that you repay your portion of the debt and close this account as soon as possible to protect your credit score. You should also contact the relevant credit agencies and ask for a ‘financial disassociation’ to be created in your file. As part of this process, you’ll have to list any addresses you shared and declare that you no longer share any financial ties (such as bank accounts or joint credit agreements).

Going forward, it’s best to think carefully about whether taking out a joint credit account is necessary. Are there other, simpler ways to share finances that don’t tie you together?

Create a new budget

Take a fresh look at your expenses now that you’re single and budget accordingly. For example, you might not be splitting the monthly rent payments, food shop or car insurance anymore. 

Our free budget planner can help you build your new financial plan – download it here.

If money’s looking a little tight, try to find areas you can cut back in. Can you cut back on socialising in the short-term, for instance, to make ends meet? Or can you stay with friends or family to avoid paying rent for a while?

Update your address where necessary

If you’ve moved house since the split, remember to redirect your post to the new address. And change the name/address on any bills you used to share with your partner. You don’t want any important documents falling into the wrong hands, and you definitely don’t want to forget to pay your bills just because you haven’t received any letters.

Re-evaluate your financial goals

Now that life looks different, it might be a good idea to rethink your financial goals. If your hopes and dreams for the future were influenced by your partner, now is a great time to take stock of what you want. Maybe you were thinking about buying a home with your ex, but now that this isn’t on the cards, how could you use the money you’ve saved up differently? Or could you continue pursuing this goal but buy with a friend instead?

If you need a hand defining your financial goals, it could help to book a financial coaching session with one of Claro’s experts. They can help you explore your options and make the right decisions for your future, all in a personalised 45 minute session.

Other things worth mentioning

  1. Make sure you reclaim any money they owe you if you’re planning to rely on it
  2. Update your will (if relevant)
  3. Get any financial agreements between the two of you in writing (hopefully it won’t happen, but in case things get messy down the line)
  4. Consider selling any old things that remind you of them – it’s an easy way to make some extra cash

Always have an emergency fund

If you don’t have any cash to fall back on right now, it’s best to start saving as soon as you can. We recommend you have an emergency fund of 3 months’ worth of expenses squirrelled away for times like this, or other unexpected situations, like your boiler breaking. That way, when life doesn’t go to plan, you’ll have one less thing to worry about.

Finding the time to start again financially after a break-up can be difficult and emotionally draining. But it’s also a great opportunity to rethink what you want for your own life. Use this time to take care of yourself and plan to build the future you want. Sorting your finances in one simple way you can start to feel more in control again.

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