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6 Ways To Make a Budget for Marriage Separation

According to a Ministry of Social and Family Development (MSF) report, the number of married couples going their separate ways is increasing in recent years.

When marriages break up, having to untangle two peoples’ money can be messy. Separation or divorce is a tough process emotionally and financially, but making financial plans can help smoothen things a little and pave your road ahead.

Here are 6 ways you can make a budget to prepare you for the divorce process.

1. Calculate income

If you have just separated or are in the process of ending your marriage, consider the financial repercussions of your actions. The first step would be to plan a budget for a new life as a divorced individual by adding up your total monthly income. This should include all sources of your income, including your salary, investments, freelance work or other sources. However, it is better to be conservative with this sum and avoid adding income sources such as overtime or alimony if these are not guaranteed monthly sums.

2. Track expenses

Once you have calculated your monthly income, proceed by itemising your expenses. This is important as a post-divorce budget can help your lawyer and judge determine how to divide assets and debts, and if they should award spousal or child support. If you already had the habit of tracking expenses, you could use past records as a reference. Otherwise, fret not for you can still start doing so now. To make things easier, you could track your expenses with the Planner Bee app, a simple way for you to manage your money all in one place.

For a start, put together past tax, utility, and credit card bills to help you figure out how much money is going out each month. Your list of expenses can then be further broken down into invariable and variable ones. Invariable expenses, including rent or mortgage, transportation, child care, food  taxes, and utilities are the ones that cannot be changed. Variable expenses are those that can change month to month and are often less necessary for your basic needs. If the budget requires cuts to be made, these will have to come from aspects of variable expenses.

Finally, don’t forget to project your future expenses. Look beyond just your usual monthly expenses, and add items like your annual vacations and seemingly one-off expenses such as replacing the washing machine. As a guide, you can use past years’ experience; e.g. your washing machine breaks down every two years and it costs $500 to get it fixed. However, remember that circumstances do change, so you may want to give such items a ballpark figure. Additionally, if you have children, your current child care expenses that include tuition and after-school activities will eventually evolve into a bigger sum for your child’s college tuition.

3. Find ways to cut costs

If the numbers don’t add up and you have to cut your expenses further, take a look at your discretionary spending.

For instance, you may be eating out a tad too much. Since dining out is known to be a notoriously expensive affair in Singapore, why not put your MasterChef skills to use and save some moolah at the same time? You can also pack a lunch on work days, and switch to kopi instead of your usual cold brew.

Additionally, evaluate if you still require all your monthly subscriptions, including your gym membership, cable tv, or Netflix subscription.

4. Make room in your budget for occasional treats

Marriage separation is a tough process, so remember to be gentle and kind to yourself. While money may be important, make it a point to carve some budget out to treat yourself. Your mental health is just as important as your financial health.

Take a walk in the park and treat yourself to an ice cream from the friendly neighbourhood uncle, or head over to your friend’s house for a cosy cook-out session after bonding over a supermarket run. These simple moments can help to cheer you up, yet don’t have to break the bank.

5. Refrain from making huge financial decisions on your own

The divorce proceedings will dictate major financial changes.

In Singapore, a divorce has no effect on the existing will, life insurance nominations, and CPF nomination. If you don’t update your will, life insurance nominations, and CPF nomination, your estate could possibly end up with your ex-spouse.

Resist the urge to make these changes before you speak to a lawyer, since your divorce proceedings are underway.

Deliberate estate planning is crucial, and speaking to your lawyer can help you better understand the estate planning implications during the separation and divorce stages.

6. Know when to seek help

No one wants to go through a separation, but sometimes it is inevitable.

If the process gets too overwhelming, know when to seek help.

For legal help

For instance, having a lawyer can help you sort out the separation of your finances and lives.

If you need less expensive alternatives to private legal counsel, you can consider the following:

  • The Legal Aid Bureau offers pro bono legal aid to Singaporeans and PRs for a variety of legal issues
  • Legal clinics islandwide offer free legal advice sessions, from 20-40 minutes.
    • The AWARE legal clinics provide you with a one-time complimentary 20-minute legal clinic session, and you can call 1800-777-5555 for a referral.
    • Other legal clinics in Singapore: legalclinics.sg
  • Some private firms provide a short free or discounted first consultation

For counselling support

Counselling services are also available at counselling centres islandwide, such as Family Service Centres and specialised social services including Divorce Specialist Support Centres. AWARE also offers individual counselling for women.

For financial help

In Singapore, assisting in divorce financial topics is not within a financial planner’s scope of responsibility by regulation. However, you may still talk to your financial planner for financial planning advice, including topics like selling your assets, making changes to your insurance plans, or documenting your family’s financial situation. Alternatively, you can always write to us at ask@plannerbee.co!

Navigate the financial realities of divorce calmly

While divorce may still be a bit of a sensitive topic, resolving things earlier could save you a lot of pain later. However, you don’t have to feel alone – there are so many ways you can get help. Additionally, by making a budget for marriage separation, it is manageable to keep track of money matters while going through this stage.

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