Helen Baker knows what it’s like to summon up the courage to take a good hard look at your finances, and manage your finances after a divorce, and as a married woman starting again after her four-year marriage abruptly ended.
The financial advisor and author of On Your Own Two Feet: Steady Steps to Women’s Financial Independence, says, “You can always see an expert to look through your finances, and if they are in good shape, that will give you peace of mind. If you aren’t in a (positive) financial position, you have the opportunity to make changes and to become financially healthy.”
Focus on 4 Cs During Separation or Divorce
Helen suggests focusing on these 4 Cs during a separation or divorce. “You need Clarity over your financial position,” she says. “From there, you get some Control about how assets will be split up and you need Certainty about what will happen next. Then you chip away at things, re-establish your financial position and get Confidence.”
How To Manage Your Finances After A Divorce
#1 Review Your Will
In Singapore, marriage revokes a previously made will, but divorce does not. The first step of managing your finances after a divorce is to review any nominations that you have made for insurance policies, says John Dasson, associate wealth advisory director at Financial Alliance.
#2 Take Control of Your Personal Finances
“It can be very messy at this stage but it is important to stay in control,” adds John. Continue to update your Statement of Net Worth.
#3 Cover All Bases
If there is a lump sum settlement, do not spend it all. Plan for retirement and ensure your bases are covered with regards to insurance. “Disability income insurance is very critical. Ensure that you have sufficient Eldershield or Careshield Life cover. It is common for someone to overlook their insurance coverage as they previously had cover from their ex-spouse’s corporate policy,” John explains.
#4 Before You Remarry
Consider putting mechanisms in place before another marriage, such as a living trust where your children are the beneficiaries.
Text: bauersyndication.com.au / Additional reporting: Cherrie Lim & Simone Wu