How to adjust to a change of income when you separate
As a family unit you will have become accustomed to a certain lifestyle. When you separate and split your assets, this always changes. As a single parent you have to make cut-backs, possibly only temporary, but it can be overwhelming knowing where to start.
First of all, breath.
Then follow our steps on how to adjust to a change of income when you separate.
HOW TO ADJUST TO A CHANGE OF INCOME WHEN YOU SEPARATE
ACCEPT THE CHANGE
One of the biggest mistakes you can make is to attempt to carry on as normal.
You can be forgiven for wanting to because you desperately want to maintain normality for your children. The last thing you want is to cut back on an after-school activity your child loves, when they have just endured their parent’s separation.
But, you may have no choice.
Carrying on regardless in the hope of maintaining normality is a financial disaster waiting to happen. Accept that life has changed and talk to your children about these changes and what it means for them. Acceptance is the first stage in dealing with a change of income when you separate.
START FROM THE BEGINNING
When you become a single mum, you are taking a new path in life. Whether this is exciting or daunting, it is a fresh start and you are in complete control of it. This includes your finances.
Once your financial settlement is complete, you know exactly what you have to work with. Now is the time to stop and take stock. Think about your current situation and what you and your children need right now. Then consider what you want for your future.
You have clean slate to do things your way, make the very most of it.
GET YOUR DOCUMENTS TOGETHER
If you are not used to managing your money, it is time to get organised.
Getting your documentation in order is top of the list for practical things to do when you first separate. This includes utility bills, insurance policies, tax records and bank statements.
As a newly single parent, you could have some big changes happening in your life over the next few years so be ready to reach for what you need, when you need it.
DO A BUDGET TO REFLECT YOUR CHANGE OF INCOME WHEN YOU SEPARATE
Putting together a budget is one of the most important steps in adjusting to a change in income when you separate. Not only will a budget show you what is really happening with your money, but it will give you peace of mind too. For this reason, make it a priority.
MoneySmart has a brilliant, free Budget Planner tool which you can use to record your income and expenses.
Once your budget is in place, you will have an overview of your current financial situation. This knowledge is invaluable to creating and achieving your money goals.
PRIORITISE AND CUT BACK
Once you have accepted your new financial position (in our first point) you must make cut-backs because these could save you from unnecessary money struggles.
To do this, you will need to prioritise what is important, and what is not. Usual cut-backs to help adjust to a change in income when you separate may include:
- Renting a smaller home while you save for a deposit for a mortgage
- Getting your kids to drop one paid activity and concentrate on the one they love most
- Cancelling your gym membership in favour of running or exercising at home
- Cancelling Foxtel and instead chilling with Netflix!
BECOME A SAVVY SAVER
When the buck (literally) stops with you, every cent counts. For this reason, you need to save money at every opportunity. Making changes to costly habits and routines such as buying coffees and takeaways is a good start.
For an incentive, work out how much you will save if you cut back and think of what you could buy with the money. Remember, we all need to treat ourselves occasionally so be kind to yourself.
Another brilliant way to save is to switch to online grocery shopping. By doing this you can shop to a budget every week. Just think, if you can save just $20 on each weekly shop, that is a saving of over $1,000 a year!
HOW TO ADJUST TO A CHANGE OF INCOME WHEN YOU SEPARATE (CONT.)
MAKE MORE MONEY
Once your money is in order and you know your income and out-goings, you may be dismayed. The cost of living is high and for single mums surviving on one income, finances can be hard.
Luckily, we live in world where money can be made in so many different ways. Think about ways to earn extra cash from home, consider finding a more flexible job or even retraining for the career you have always dreamed of.
If you need inspiration or ideas, head to the Single Mum Vine Facebook Group. You will find 1000’s of single mums building businesses and taking on extra work to fund their new single mum lives.
REACH OUT FOR SUPPORT
Remember, there is support out there if you need it.
Call on friends and family to care for your children while you take an extra at work. Speak to your employer about more flexible hours to allow you to work more or to fit your current work around your children. Reach out for government benefits if you are in need.
Please never feel too proud to ask for help.
