If you know that your marriage is at an end, and you’re wondering how you’ll be able to live financially on your own after divorce, we’re here to help.
In this blog, our UK divorce lawyers share how to financially survive divorce – from living on your own post-separation, how to keep the price of your divorce low, and how to start over so you have financial freedom.
How can I afford to live on my own after a divorce?
It’s very natural to be anxious about your life after divorce. You might be worried about how you will afford housing, childcare, food, bills and how to keep your standard of living the same. It can be difficult to maintain the same standard of living when separation occurs, and that is why it is so important to take legal advice at an early stage.
You might not be the ‘breadwinner’ in your relationship. Perhaps you work part-time or have taken time out of work to look after the children, or because as a couple, you are comfortable enough financially for one party not to work. No two families are the same.
Whatever the reason, if you are the financially weaker party, you might have lots of concerns around affording things during and after your divorce. You may worry that you can’t afford to divorce.
Sadly, money is an unavoidable topic in divorce. Short-term costs like court fees and legal fees during divorce can be stressful. However, there are ways of mitigating the impact. By engaging in a non-adversarial process, like mediation, you can limit legal fees, as well as the additional emotional stress of taking the divorce to court.
Our lawyers actually settle 80% of our cases outside of court, which saves our clients time, money, and extra stress. Want to know if this would be possible for you? Get in contact with our team today.
Some couples choose to manage most of the divorce themselves. However, there are a number of risks associated with doing a DIY divorce, so it is best to seek legal advice where possible, particularly regarding finances.
If you are concerned about short-term funds, you can apply for legal aid (although this is available in very limited circumstances) or maintenance pending suit (MPS), which means your ex-partner must pay you some maintenance whilst the divorce is progressing. However, not all law firms accept legal aid, so please check this prior to your first meeting with your divorce solicitor.
It can be difficult but try to think rationally about what might be expected of you financially during and post-divorce. If you are financially weaker, it is unlikely you will need to pay any kind of maintenance, and there may be options for your ex-spouse to cover your legal fees. Your divorce lawyer will be able to inform you of this during your case.
Top 10 tips on how to be financially prepared for divorce
If you are considering divorce or separation, it is a good idea to start becoming financially prepared for a divorce. Financial planner, Jodie Phelps, has over 12 years of experience helping individuals and families with their finances.
Here, she is sharing several key steps to ensure you have a clear understanding of your financial situation and can navigate the separation smoothly.
1. Understand your current assets
Know what assets you have, their value, and what’s in place. Gather relevant documents such as bank statements, investment account statements, insurance documents and tax returns.
2. Know your joint incomes
Be aware of all sources of joint income. This includes salaries, rental income, dividends, and any other streams of revenue. Understanding the total income helps in assessing the financial situation post-divorce.
3. Manage your outgoings
Stay on top of your expenses by reviewing and cutting out unnecessary costs. Ensure you are not paying for subscriptions you no longer need. Regularly review and update your budget to reflect current expenses.
4. Understand joint liabilities
Know all the debts and liabilities you share with your spouse, including mortgages, credit card debts, and loans. This understanding is crucial for fair division and repayment planning.
5. Ensure you have a personal bank account
Ensure you have a bank account in your own name. Joint accounts can sometimes be frozen or restricted during separation, so having a personal account is essential for financial independence and security.
6. Build an emergency fund
Create a savings fund to cover any unexpected expenses that may arise during the separation process. This financial cushion can help you manage unforeseen costs without added stress.
7. Improve your credit score
Review your credit report and work on improving your credit score. Establish credit in your name if you haven’t already. A good credit score is vital for securing loans, renting property, and other financial activities post-divorce.
8. Check beneficiary designations
Ensure that the beneficiary designations on your financial accounts, insurance policies, and retirement plans are up to date. Some may not automatically change on divorce (such as pensions and life insurance), so it’s important to review these.
9. Develop a financial plan
Make a plan that outlines your short-term and long-term goals. Include budgeting, saving, investing, debt management, and retirement strategies.
10. Consult a financial adviser
A financial adviser can be part of your support network throughout divorce. They can help you understand the financial implications of divorce and assist in planning for your future.
How to start over after a divorce with no money
The law in this country means that financial settlements begin from a starting point of a 50/50 split during the divorce process. However, this doesn’t mean that your income and assets will be split directly in half. When giving a consent order, the UK courts will look at various factors, including:
- Housing
- Children
- Pensions
- Future income potential
If you are financially weaker than your spouse, it may be that you are entitled to spousal maintenance, or as part of your clean break, you may get a lump sum payment. You may also receive child maintenance. Remember, our expert lawyers can share what you will likely be entitled to, which can help put your mind at ease. For more information, reach out to our Client Care team.
A lot of people worry that after divorce, they will not be able to afford nice things like holidays, gifts or outings, and will struggle to make ends meet.
This can be stressful, particularly if you think your ex-partner is likely to be in a better financial position post-divorce. If you have children, you might be worried about the difference in life you could offer compared to your ex.
However, children who are living with parents who are unhappy in their marriage will pick up on this. Ultimately, they will want to see you happy, and creating a positive environment, doing free activities and making happy memories together will be worth more than any big gifts or expensive holidays.
There are lots of organisations and people that can help if you are feeling anxious about money, whether before, during or post-divorce. Reaching out and talking to someone can help relieve tension and let you know that you’re not alone.
One of the most helpful things you can do is to start (or improve) budget tracking. Here’s a budget planner you can download and complete to help you track your finances pre, during and post-divorce.
Tips for controlling the cost of divorce
Sure, spousal maintenance will help your financial situation after your divorce is finalised, but what do you do in the meantime? It’s no secret that divorce can be expensive, but we have some tips to help you control how much it costs to get divorced.
Discuss potential costs with your solicitor before you begin
It’s completely normal to be concerned about finances during the divorce process, and your solicitor knows this. Our lawyers will listen to your circumstances, and this is a great opportunity to be clear about what you want to achieve. This is because changing your mind can result in unnecessary time delays and further costs.
You can also ask them about additional costs, such as court fees and disbursements (barrister’s fees, lawyer’s travel costs, photocopying large documents, etc.).
Depending on your situation, your solicitor may also want you to consider all options for resolving disputes. For example, family mediation may help you reach an agreement, or collaborative lawyers can help you negotiate without the need to go to court.
Do your homework
Your solicitor will need full financial disclosure from you. Prepare for this by gathering together all of the documents and information that are required. The more you can prepare and provide information, the less your solicitor will need to do, which will reduce costs.
Think about where you and your children will live after you are divorced
One of the biggest questions our clients ask is what happens to the family home after divorce. And, naturally so. We recognise this can cause a lot of stress and anxiety. You may be asking: Can you afford to stay in your home? If you sell the house, can you afford to buy a new property?
Find out from a mortgage adviser what your mortgage capacity is and speak to estate agents to find out how many suitable properties there are in your area.
Promptly return all paperwork so your solicitor does not have to spend time chasing things up
The longer your divorce is delayed, the more expensive it will be in the long run. Therefore, we recommend ensuring all your paperwork is done on time, so you can ensure you’re doing everything on your side to keep things moving.
If you need help and support throughout the divorce process, consider using qualified divorce coaches who can guide you through potential emotional traumas. They charge at a much lower hourly rate than a qualified lawyer.
Consider picking up some shift work or a side hustle to ease any money anxieties
If you and your ex-spouse have agreed on your child arrangements order, you may find yourself with time alone on nights you don’t have the kids.
On these nights, you could spend the time doing some shift work or a side hustle to build your income. It can also make those nights without the kids feel productive and help ease any anxieties you may have about time without them and money worries. A win-win!
