A recent report has found that it takes the average person 5 years to recover financially from divorce or a relationship breakdown. While for some it will be a lot less, and for others much longer, it’s important not to overlook the possibility.
The Australian Bureau of Statistics (ABS) has found that the average age of divorce for men is 45, and for women is 43. Statistics also show that after you walk down the aisle in Australia, there’s a 1 in 3 chance that you won’t make the distance.
With all of this doom and gloom, let’s consider the financial impact on average to Australian couples who go through a divorce.
Women
A divorced mother’s superannuation balance is on average 68% lower than a married mother
A divorced mother has 37% less superannuation than a divorced father
40% of divorced mothers live in rental accommodation
Men
A divorced father’s superannuation balance is on average 60% lower than a married father
32% of divorced fathers live in rental accommodation
On a positive note, a divorced father on average earns 26% more than a married father
Obviously, we don’t want to plan for our marriage to fail, but we can look to reduce the risk with a few simple steps should the terrible ‘d-word’ happen to us.
1. Set up your emergency fund
Make sure that you have at least 3 – 6 months of your ongoing expenses in an emergency fund.
2. Budgeting
Be aware of how your cash flow situation would change if you were to separate from your partner. Which of your expenses could you quickly put a halt on and which would remain?
3. Plan your career
If you’re not currently working, how would this change if you were to separate? Would you need to re-educate yourself or upgrade your qualifications to get back into the workforce?
4. Remain aware
While it is commonplace for one partner to be interested in the household finances, it’s important that you don’t simply ignore where your money goes and assume that all is in order. At least be aware of where your household finances are and how they are performing for you.
5. Consider your financial goals
What are your financial goals? Do they align with your partner? If you have your own financial goals that you’d like to achieve, set about doing so yourself. Start saving a small amount from your salary each month and work towards achieving those goals.
Remember, it’s important to plan for the worst and aim for the best.
To Your Financial Success!