June 19, 2022
Divorce rates are going up, and it’s possible due to the impact that COVID-19 lockdowns have had on relationships. But, whatever the reason, divorces are hard. Particularly if you weren’t expecting it.
They take a toll on so many aspects of our lives; mentally, physically, and financially.
And, it’s rare that both parties come out better off financially. In a study conducted by Fletcher, only 16% of divorces resulted in both parties being better off after they split. In around a quarter of cases, both parties were worse off. This leaves a lot of cases where one person took not only an emotional hit but a financial one too.
One of the reasons for economic disparity after separation is the division of labour while they’re together. Particularly if they have children. One will be the ‘breadwinner’ continuing to work and grow their career. Meanwhile, the ‘homemaker’ took a break from their career to look after the children. During this time they not only weren’t earning, but their earning potential took a dive as well as they weren’t able to continue building up their career.
After the divorce, the ‘homemaker’ will often be granted custody of any children. And while child support payments go some way they never fully negate the impact of losing that extra income.
Another reason why someone might fare badly financially is because they let the other party manage the household finances. By not staying across their financial situation they were unaware their partner was squirrelling money away into a separate bank account, or that they were in more debt than they realised.
Whether you think a divorce is on the cards or not, there are some steps you can take to protect yourself financially. Here’s 3.
It's also important to realise that this doesn’t just apply to marriages and civil unions where there are processes to follow and paperwork to fill out if you want to dissolve the relationship. In New Zealand, de facto relationships are governed by the Relationship Property Act as well. This means if you’ve been living with your partner, or are considered to be in a de facto relationship, you’ll be subject to the same laws as those who have signed that bit of paper.
Finally, it’s worth getting the advice of an expert. Whether you’re only considering a divorce, or have already started the process, getting expert advice from lawyers, divorce coaches and financial coaches can help you get through with the best possible results.
If you or your partner are considering a divorce or you’re already going through the process and wondering how to best protect yourself financially, now and in the future, have your questions answered at our upcoming webinar. enable.me coaches Hannah McQueen and Shelley Palman will be joined by Bridgette Jackson, Divorce Coach and founder of Equal Exes to answer all your questions about managing your money through a separation and divorce and out the other side. Register to attend here.