How to protect your money when facing a break-up

The December holidays – a time for fun, family and festivities, and, also, failed relationships. Picture: Karolina Grabowska, Pexels

The December holidays – a time for fun, family and festivities, and, also, failed relationships. Picture: Karolina Grabowska, Pexels

Published Dec 5, 2023


By: Queen Malobane

Known as heartbreak season, or “Dump Month”, December generally sees a rise in break-ups as people act to end relationships that they believe aren’t working so they can start the new year with a clean slate. In fact, lawyers have unofficially dubbed the first working Monday in January as “National Divorce Day” as divorce inquiries typically pour in after the holidays.

When dealing with a divorce or break-up, we often find ourselves preoccupied with grieving the end of that relationship.

While it’s always going to be hard emotionally, there are often serious implications for your finances too. It is important to act quickly to protect yourself financially as a serious or long-term relationship will generally involve some degree of financial entanglement that needs to be dealt with sooner rather than later.

Here are three important steps to follow when dealing with the end of a relationship:

Reach a settlement

In the case of a marriage or a long-term relationship coming to an end, settle with your ex as soon as possible. Sit down with your ex-partner and aim for an amicable discussion to gain a better understanding of what he/she might be prepared to take care of or pay towards. This is especially important if you have children together.

Re-evaluate your budget and lifestyle

Once you have a better understanding of what your partner is prepared to contribute towards, you need to relook at your budget based on your new financial status. You may no longer have access to a joint income, so this will mean reworking your budget based on your current income, which includes any contribution your partner agrees to make. Take a hard look at your earnings and expenses and ask yourself, “Do I have enough money to maintain my current lifestyle?” If the answer is no, see where you might be able to trim. This could involve buying fewer luxuries, consolidating debt or even moving to a smaller home.

Update your affairs

You also need to think about what this split means for your financial affairs. Is your partner listed as a beneficiary in your will or life cover? Perhaps he/she is listed as an insured life on your funeral policy or covered by your medical aid. Start by listing all of your financial commitments, and work through these to see where your partner might be nominated. You might want to think about updating your will and policies with a new beneficiary or if you were on your partner’s insurance or medical aid, finding cover of your own.

Removing your ex from certain policies, such as your medical aid, or even removing their belongings from your short-term insurance, will also save some money on your monthly premiums, which you can re-direct towards your budget.

You can also avoid a great deal of financial turmoil down the line by asking your partner three important questions before entering into a marriage or a serious relationship:

1. What do you earn, what do you spend, and what debt might you have?

It is important to have a very honest, upfront conversation with your partner on their earnings, expenditure and debt. Whether you like it or not, your partner’s relationship with money will affect the life you envision for yourself – for better or worse.

2. What is your credit rating?

This might seem like a callous question to ask the person you love, but it’s an important one. This will not only reveal how indebted they are, but it will also demonstrate how they handle their money, as well as their ability to meet their financial commitments (which, in turn, might also signal how they treat other commitments!). This will help you to understand whether you’re marrying an asset or a liability.

3. What are your family dynamics?

It is important to be aware of your partner’s financial obligations to others. Perhaps he/she is financially responsible for a parent or a child from a previous relationship or contributes towards another family member’s welfare – whatever the case may be, it is important to understand the dynamics at play to determine how these might affect your financial well-being.

Finally, before getting married, educate yourself on your options. By South African law, if no antenuptial contract is entered into between a couple, they’re automatically married in community of property. This means that everything you own and owe as a couple, you are jointly liable for. When entering a marriage, we want to believe it will be happily ever after, but the reality is you do not know what might happen down the line. Hope for the best, but plan for the worst. If you decide to get married in community of property, ensure that you understand the implications and know that complete financial transparency between you and your partner is more critical than ever.

At the end of the day, while you should always aim to do your best to protect yourself financially, your emotional well-being is most important. Sometimes, we put up with abuse or terrible behaviour because we are scared of what leaving might mean for us financially. We might stay in a bad relationship out of financial fear.

If you decide to leave, know you may need to make certain financial adjustments or get by on a little less for a while, but at the end of the day, your emotional well-being – and that of your children – tops all. It is okay to start over.

* Malobane is the Gauteng provincial general manager at Metropolitan.