Gerry Incollingo is the managing director of LCI Partners, an established accounting firm based in Parramatta. Since 1998, they have extended their locations to Sydney CBD, Parramatta CBD and Southern Sydney, employing in excess of 60 staff members across all offices. With over 30 years’ experience, Gerry has managed the financial affairs of a diverse client base, and the management of the business to help grow the profitability and strength of his clients going forward.
Breaking up is never easy, but one of the first steps to reclaiming your life is to get your finances in order.
Starting over financially after a divorce or long-term breakup doesn’t have to be difficult, even if you have shared assets and debt. Simply apply the following financial tips to help you press reset and begin the next chapter of your story.
5 top tips for dealing with finances after divorce
1. Downsize your home
Downsizing can prove to be an emotional decision but there are many advantages, particularly given the current property boom. Properties around Australia have seen the steepest increase in 18 years. With the average house price in Australia at $900,000, you’re likely to fetch a great price and a quick sale. Moving to somewhere smaller will also mean there’s less money spent on property maintenance and lower bills. A new government incentive for the 2021 budget will mean those 60 years and over can also contribute up to $300,000 into their superannuation when they downsize. This is designed to free up more family properties for younger Australians.
2. Equally split your assets and debts
When you’ve shared many years together, aside from your family home, you’re likely to have assets and debts that need to be divided. Whether it’s investment properties, stocks and investment bonds or family business, heirlooms or pets, a mediator can eliminate the need to attend the Family Court. It’s also a faster method than waiting for a court date, so you can move on with the next phase of your life sooner.
3. Know what benefits you’re entitled to
Check to see what government assistance you are eligible for. If there are children aged 18 years and under, in addition to child support and spousal maintenance, you may be eligible for family tax benefits, a single income family supplement, rental assistance or childcare subsidies. Each case is judged on its individual merits, but if you don’t ask, you could be missing out on valuable financial support.
4. Work out a budget and stick to it
It seems like common sense to have a budget, yet millions of Australians have no idea where their money goes and how they can cut back on unnecessary spending. When you’re starting out on your own again, it’s a good idea to know what your living expenses are compared to your income. Write down everything including what you spend on coffees, gym memberships and the costs of running your car. Allocate your income to the necessities first and what’s left over should go towards an emergency buffer until you have enough savings to tide you over for at least three months.
5. Talk to a financial advisor
Post-divorce finances can be complicated, so it pays to speak to an expert. No matter what your circumstance is — co-parents, single parent, empty nester — a chat with a money expert can help you evaluate your financial situation and plan for the future.
Whether it’s minimising your tax, offsetting your mortgage, securing a new mortgage or working out a budget that works for your individual circumstances, you’ll benefit from having clear goals and independent advice from someone who knows how to make your money work for you.
