Anupama writes a letter to her 18-years old daughter. Read what she has to say.
Managing finances during a divorce is certainly a challenge. However, here are a few pointers by which you can cope up with your financial responsibilities during the divorce process.
The dreaded D word is just that, dreaded both in terms of emotions, and in terms of your finances.
Cutting your ties with someone, with whom you once shared your life with isn’t easy. Maintaining two households is a lot more financially draining than maintaining a single household. Previously, if there were two working professionals contributing to the home and child expenses, after the divorce you are left alone, supporting both yourself and your child(ren).
Although it does seem overwhelming most times, you can reorganize your lifestyle by planning your finances accordingly. Here are a few pointers that helped me while going through a divorce.
This is an investment, rather than expenditure. It is essential to resolve financial issues when dealing with a divorce. You will need to look at joint assets like the house you shared, joint accounts you hold together, etc.
Irrespective of whether the divorce is amicable or not, you will still need good legal help to sort out the combined finances you were holding together. If not a private lawyer, you can consider a mediator who will look at resolving the matter in a fair manner, without favouring either party.
Most family courts in India, provide free mediation services. They also have the provision to refund the court fees, for cases settled through mediation. It is best to make use of this facility before going to court for resolution of legal matters.
If you have been a homemaker, its time to get working. Of course, this is the most practical thing to do, but I cannot stress about how important it is to your overall morale, particularly after a divorce.
When your self esteem is already low, and you’re questioning yourself about the ‘what-ifs’ and ‘was I not good enough’ or ‘how could I had prevented this from happening?’, having a steady source of income will boost your confidence. Instead of seeing yourself as a victim and helpless, you will be in an empowered space, ready to take decisions from an emotionally balanced place.
Working also helps to build yourself up emotionally, and you will get to build a social circle of your own. You need to get up each morning, dress up and get to work. It gives you something to look forward to at the beginning of each day, instead of thinking about the past, which will not serve you. Keep the lessons, while living in the present moment is very important when you are trying to move on.
This is especially important in the initial stages of separation where I often spent months and months crying and blaming myself for the way things turned out. After giving yourself some time to recover from the initial separation, it is as important, if not more, to move on to your future. It is definitely not recommended to depend on the alimony or child support to come through, especially in our country where court cases go on for years, and you may end up with an insignificant sum, or sometimes even nothing. It is always better to rely on your own income, for something as important as your and your child’s future.
Break your expenses into major and minor, essential and non-essentials, and keep recording them on a spreadsheet, as and when you incur them. Make a note of the seemingly minor ones as well, since at the end of the month you’ll see how they build up to a significant sum, which you can minimize.
Record the annual expenses and monthly expenses separately, so that you have a better idea about where your income is going. Maintain a birthday fund, entertainment fund, daily expenses fund, so that you don’t overshoot your budget, and you can restrain on any kind of impulsive expenditure.
If you had a financial advisor during the marriage, find a new one during the divorce process. The reason being, it is a safer option as you will need a person who will see to your best interests rather than sharing one with your previous partner.
You will need someone to consult on tax savings, and planning your savings and investments as well. It’s better to have someone you trust rather than thinking you may be able to do it on your own. Save your energy and time for the more important decisions.
As a single parent, this is something that is mandatory, and which you cannot afford to overlook. You will need to be fully prepared to face a medical emergency or any other kind of unforeseen circumstances.
It is best if you start investing early in any kind of a saving scheme, like PPF fund, RD (recurring deposit) or FD (fixed deposit) as early as you can. While RDs and FDs are taxable, you can also look at various post office schemes, many of which are non-taxable and easy to maintain, with a rate of interest at par with the ones offered by banks.
This is as important as having a stable income, given the economy today and the rising expenditure.
You can open a PPF account in your child’s name, as well. The government has opened many saving schemes for the education of children which you can invest in, with guaranteed returns. Do look at the various options and start early.
Reduce the temptation to use credit cards and strive to keep debts or loans to a minimum. You do not want the additional pressure of a large loan looming, along with an interest to add on to your financial burdens. Unless it is very much essential, such as a home loan or a vehicle loan, keep all other debt to a minimum.
It is wise to open an insurance policy for yourself, in case of unforeseen circumstances. It is important to secure your child’s future, in case of a mishap. Health insurance is also a much essential investment which you will want to consider.
Divorce as it stands, is a difficult process to get through. By planning your finances and organizing your money accordingly, you can ensure a comfortable future for yourself and your children. While it is important to take care of your needs as well as the requirements of your children, do have a clear demarcation between your needs and wants, so that your financial burdens are kept to a minimum. Whenever it’s possible, do try to take freelance jobs or create an alternate source of income for yourself, so that you need not worry about the future, at least with respect to your finances.
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