After a few months of ups and downs, BF and I are over. While it has been a little while since we broke up, I needed to be completely over it to announce it to the world.And you may still see mentions of him here and there, as I have some pre-breakup posts in my queue. We came to an agreement about how to split our three properties in common, the lakeside plot with the little house, the 90 acres land development and the second beach plot in front of it. We split the unsold plots in two and the second beach as well. I am staying in the house and keeping the guest house open to offset the costs while he moved back to the city. The house is on the market, and if we get a buyer, I will build something else on the other beach plot. I am still mentally exhausted after 18 months of workers coming and going out of my house, I want some peace and quiet, but will probably start building another house elsewhere, just to be safe.
Other than this, and splitting the money on the company account in half, not much to report. Personal details are personal and this is a financial blog, but I want to use the occasion to share a few tips on how to survive a breakup financially.
Don’t get blinded by love
This is a pre-breakup piece of advice. When you are still single, or starting a relationship, your vision is clearer. Set your priorities, your financial goals, your limits. Are you ok with paying more for dates, more rent if you move in together, are you ready to tag along on an expensive holiday if you are still in debt? and so on.
I have heard all kinds of horror stories, people lending money to a new flame, or even worse, cosigning a loan, leaving their jobs to follow their love only to find themselves jobless and broke in a new city or even a new country…
If you know what you want, you shouldn’t have to compromise unless you are fully aware of the risks and willing to take them. It is easy to get blinded by love.
Think long and hard about combined finances
I have always been against combined finances, but to each their own. Again, don’t decide based on how much you love and trust each other, because even if you are married, you have a fifty percent chance of not growing old together. Decide based on your own values and principles.
I am fiercely independent and could not imagine pooling all my money in a common pot and having to justify what I spent $12.99 on last Tuesday.
We had a joint account to make life easier, and each added the same amount if the balance was low. From there we paid any bill related to our living in the house, taxes, staff… and each paid for his treats, like my month long holiday to France, with one’s own money.
Know where you stand, at any time
Do you know how much money you have? How much you owe? To whom? Many people can’t answer those simple questions. If your spouse is maxing out credit cards when you think he is funding your retirement account, you may have a really bad surprise if you break up, or he passes.
Ask questions, be involved, know the passwords to online banking, where the statements are kept, and everything there is to know about your finances. If your spouse is being secretive, there is a problem somewhere. You may find several accounts you didn’t know about, or worse, like alimony to a love child or receipts for motel nights. I know, worst case scenario, but better safe than sorry.
Have some money squirreled away
Yes, that sounds sneaky and dishonest, and I don’t really care. You never know what can happen. If the relationship turns really sour, say your spouse beats you or gambles everything, you’ll be glad you had your little stash.
I remember in a movie an Asian bride had saved a lot of money during her years of marriage by rounding up the bills to her husband. She said it was cultural for a woman to have that kind of hidden savings, mainly as a safety net if you have to leave your husband some day, or to help a family member, or buy some make up without having to go to your husband and explain why you need cash.
I call it middle finger money. I liked to think that I was there living by my own will and not because money tied me to BF. I felt free to leave at any time. Even if that means charging a credit card, you don’t have to stay longer than your sanity allows for, and it is better to go, even if that costs money, than to stay because of money.
If you don’t have a job, you can save found money, birthday gifts in cash and gift cards provided they don’t expire, money from an inheritance, refunds… If I were short in cash and had no family support system, I would try to have at least enough for a deposit and first month rent on a 1 bed property, and $500 or so to get back on my feet during the first couple of weeks.
Review your expenses
We used to split all expenses in half. Now that I am on my own, life will be more expensive, or I can cut the things I don’t need. The maid and handyman come to mind. They work a full time job between themselves, and on top of the fact that it is kind of ridiculous to have two staff tend on one person, I don’t like having people around the house all the time. I would cut them altogether but am too lazy to clean and garden, so I am offering them to come twice a week at a similar daily rate than before, cutting the expense by 60%.
Review what you can cut now that your other half isn’t there (ESPN? your phone’s family plan with unlimited minutes to your ex and MIL?) and don’t procrastinate any longer on it.
Can you live on one income and not change anything in your life? Do you need to downsize your home, sell your car? You may have to take drastic measures, and it is overwhelming to go through a breakup AND a move AND enrol your kids at a new school… but if you can’t afford your lifestyle, you need to act ASAP before you deplete your savings or rack up some debt.
Write numbers down
Write everything you have in common, and how you want to split it. Justify your last expenses, like utility bills or taxes that still have to be shared. If you have a mortgage together and one is staying in the house, work out how much is owed to the other one.
Write it so both parties can understand and also to have proof of your claims if things change down the road.
If you have a number in mind for child support or what you are owed, break it down as well. The more details, the better.
Break the fiscal ties
If you make less than your spouse, you may go back to a lower tax bracket by getting a divorce. As long as you are filling jointly, you may be paying more taxes than needed.
Like the bills, if money is tight, do not procrastinate and get it done as soon as possible. If you are breaking up in good terms however, and filing jointly works to your advantage, you can consider it for the short term, but remember the relation may not always be that smooth, especially if one of you starts dating again.
Let it go
When you break up, both people are hurt and want to hurt the other more, and money is often a tool to do so. When we were trying to split our assets, BF came with a solution and I said yes the next day, without going in details over the numbers. I didn’t really care, I wanted to buy my peace.
Hanging on to things and money topics will make you both miserable, try to be the better person, let it go, you’ll make more eventually.