Divorce usually involves material restructuring which results in the need for a revision of your financial plan. It may seem like starting all over again but with a shorter time-horizon. This means you need to plan carefully.
If you have children you will have custody and alimony to consider as well as the splitting of joint financial portfolios, houses and other assets.
No matter what your life stage or financial needs you need a financial plan and a budget. Both of these will change as your life circumstances change. If you need help please visit financial planning & advice for tips on how to manage your finances.
Emergency savings plan
During a divorce you will appreciate your emergency savings that you put aside each month to cater for emergencies such as rental accommodation or lawyer’s fees. Continue to contribute to this fund via a bank account or lower-risk investment that offers you competitive interest rates and easy access to your money.
Planning for education
Despite the fact that you and your spouse have chosen to part ways, you both still have the best interests of your children at heart. Planning for education remains an important aspect of the divorce settlement that you and your ex-partner need to agree on.
Most couples tend to insure their possessions in one policy. After divorce you need to cancel existing insurance and take out your own short-term insurance on your portion of the assets and possessions.
Don’t forget that in spite of other financial demands, you have worked hard to achieve your goals and the cost of replacement can be staggering.
No matter who gets to “keep the house” in the divorce agreement, the chances are that the purchase of a new home will follow.
While you may be entitled to a portion of your ex-spouse's pension plan or retirement annuity on maturity, depending on the product, you must consider building an independent retirement portfolio - after all you want to be financially independent in your old age rather than dependent on your children.
You now need to take out your own medical aid or remove your spouse from yours. Either way you need to work out the most cost effective and efficient way to cover your children’s medical expenses – both major and day-to-day expenses.
Using some of the proceeds of your divorce settlement, start a financial portfolio – even if you can only manage N$250 monthly. Old Mutual offers a range of investment and savings products that can be an ideal and affordable way to structure an investment portfolio – offering investment options for all types of risk profiles and appetites.
Risk protection: death and disability
Now you need to worry about what will happen to your children if something happens to prevent you from working – either temporarily or permanently – and paying alimony/ raising your children. Old Mutual’s Greenlight range offers a comprehensive selection of life and disability protection products to alleviate your concerns.
A divorce may see you changing cities or companies. An important aspect of changing your place of work is what you intend to do with your pension/ provident fund money accrued with your previous employer. Old Mutual offers a number of retirement products to suit your needs. Either as a permanent retirement product or just to park your money until you know where you want to invest it.
Funerals are costly and complicated to arrange. Ensure that, should you die, you have removed these burdens from your loved ones by investing in comprehensive funeral cover.
After divorce you should revise your estate planning. This includes your Will, reassigning beneficiaries and possibly establishing trusts to cater for education or special needs. Old Mutual offers an estate planning service that will help you revise your will, conduct a tax-efficiency analysis and set up trusts. Old Mutual also offers trustee and executorship services.
Contact an Old Mutual financial adviser today to help you develop a financial plan that suits your current circumstances and financial position.