Separation or divorce is a stressful and upsetting time. It also unfortunately negatively impacts any wealth that has built up and any preparations we’ve made for the future. Sometimes the only thing to do is get life back on track by taking control of our income, debts and spending. We can start by taking stock of the day-to-day finances, then work up to tackling longer-term money issues.
The first step is to reorganise your finances without your ex-partner. If they took care of the money, you need to work out how things were organised and see if you need to make any changes. Now’s the time to focus on getting set up for the future – this could be a whole new start.
The Property (Relationships) Act covers how homes and other assets are divided when people divorce or separate.
In most cases, the Act only covers ‘de facto’ couples who have lived together in a relationship for at least three years.
But even if your relationship lasted for less than three years, you may still be covered by the Act if you have a child, or if you’ve made a substantial contribution to the relationship.
Married couples and civil union partnerships are covered by the Act from the date of the marriage or civil union. If a marriage or civil union has lasted less than three years, different rules apply to the division of property.
There’s more detail about relationship property on the Ministry of Justice website.
There’s also useful information about dividing up relationship property, living together and what happens in a break-up on the NZ Law Society website.
If separation means a change in household income, it's important to know exactly where the money comes from and where it goes.
To work out the current state of your finances you’ll need to check the following:
You’ll also need to review any business documents if you had a business with your ex-partner.
Use the budgeting tool to work out a plan for income and spending from now on.
No matter how much or how little you have to play with, sticking to a budget will put you in control of your money.
This is also a good time to set some new financial goals – here’s our guide to setting goals.
If there are debts to pay off, use this debt calculator to make a repayment plan.
Managing finances after a divorce or breakup can be hard, especially if you’re new to it. But advice is available – including free budgeting help.
Free help is also available for the wider aspects of dealing with separation.
The Family Court provides up to six hours of free counselling for people who need to sort out separation issues. For more information visit the Ministry of Justice website.
The Citizens Advice Bureau is also a good source of information, help and advice.
After a relationship break-up you may need to update your will – particularly if you want to change any references to your ex-partner.
Your insurance policies may also need updating, especially life insurance if you have children.
Getting retirement savings sorted after a relationship ends is an important step in planning for the future. If your partner had been taking care of this, you may need to set up your own savings plan.
Note that if either partner contributed to KiwiSaver during the relationship, those savings could be counted as relationship property and will need to be divided along with the other assets.
If there are children involved you may need to work out child support arrangements. To find out about child support payments and how they work, see the Inland Revenue website.
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