Posted on: 28 July 2015
If you have just split with your partner and are panicking about finances, you need to take a deep breath. Become a single mum is hard on a range of levels, but when it comes to your finances, it can be especially hard. To keep everything under control, get started with financial planning as soon as possible with these tips:
1. File for child support immediately
Even if your split is not permanent yet, don't let months go by without collecting cash. If you are doing the majority of child care and especially if you are doing all of it, you need and deserve financial support.
Contact the Department of Human Services as soon as possible to set up a child support arrangement. That department decides how much child support you receive based on your income, the other parent's income and how much time each parent has the kids. You can also create your own arrangement as long as the amount of money received is not less than would be mandated by law.
2. Make financial changes
Regardless of how much child support you are going to receive, chances are that you may have less money coming in than you did when you were married. Do not wait for your debts to mount as you maintain your regular lifestyle.
As hard as it can be, make financial changes right away. Work more if you can or find a job that allows you to work at home. Cut down on unnecessary expenses, downsize to a smaller place or take a roommate.
3. Keep the life insurance policy on your ex
Although you are ending your marital relationship, if your ex dies, you will still suffer financially in most cases. He or she won't be there to help with even a little child care, and there will be no more child support payments.
If you already have a life insurance policy on each other, keep them in place and make sure that you are both named as recipients on each policy. If your ex won't let you be the recipient on his or her policy, consider taking out a policy on yourself so that in the event of your death your kids will be taken care of financially.
4. Decide who is going to claim tax benefits for the children
When you file your taxes with ATO, there are a range of credits you can take for having children and taking care of them. However, in most cases, only one parent can take these benefits. To prevent confusion and to protect everyone's financial interests, make sure that you decide early who is going to claim which benefits.
5. Consult with a financial adviser
Your finances are likely to be tight for a few years, but that doesn't mean that you should stop saving. Instead, you should work even harder to safeguard your finances. To protect your long term financial health, consult with a financial advisor after a divorce.Share