How to get through a divorce during the cost of living crisis
Going through a divorce in the middle of a cost of living crisis will be difficult for most, but probably even more so for freelancers given their demanding work deadlines and constant juggling between projects. That’s why going through a no-fault divorce could be the least stressful and possibly cheapest way to get through a divorce.
Sarah Coles, senior personal finance analyst, Hargreaves Lansdown covers the basics of a no-fault divorce, plus we provide some simple mental and financial tips from a successful freelancer who went through a divorce and arguably came out better on the other side.
What is a no-fault divorce?
No-fault divorces were introduced in the UK on 6 April. They enable one or both of you to apply for divorce, and there’s no need for any further blame or recriminations, like in the past, which just caused more sadness and spite between couples and their families.
Sure, freelancers may feel the financial pressures of divorce slightly more than their salaried counterparts, but on the upside, they do have more freedom to reshape their future by upskilling and pivoting their careers.
Those feeling any societal pressures or stigmas tied to divorce should know they are not alone. Over 100,000 divorces were granted in 2020, 42% of which were on the grounds of unreasonable behaviour, and 9% were on the grounds of adultery.
Undoubtedly if bills are stacking up thanks to inflation and the cost of living crisis, then here are some tips to cut the cost and stress of divorce by going the no-fault divorce route, according to Sarah Coles, senior personal finance analyst, Hargreaves Lansdown.
“No-fault divorce could cut the cost and stress of divorce dramatically, by removing the endless legal blame game from the process,” says Coles. “However, you’re still having to come to a reasonable agreement with someone you have already decided you can’t live with, so the process is likely to have its share of stress.”
Despite the new rules taking an awful lot of the ‘he-said, she-said’ back-and-forth out of the process, you will still need to divide your assets and agree about important things like care of any children, Coles reminds us.
“This not only means you face the associated legal costs, but the ongoing financial pain of splitting assets that used to run one household in order to cover two. So it’s worth taking steps to cut out any of the cost and stress that you can,” says Coles.
Five steps to cut the cost and stress of your divorce
- Limit the damage during the process (like paying your equal share of the mortgage)
People often run up debts after a split, so it makes sense to draw up an emergency budget to cut your expenses as much as possible during these first difficult months. You also need to think about existing commitments. If you’re both named on the mortgage, then you’re both liable for the full amount, so to protect your financial position you should try to maintain payments in the short term. If possible, try to agree this between you. If your ex refuses to pay their share, or you’re struggling to pay yours, talk to the mortgage company and see if they will allow you to pay interest-only for a period, or take a break while you sort something out.
If you’re being paid directly into a joint account:
- arrange for the money to be paid elsewhere.
- If there are bills, rent or the mortgage coming out of the joint account, arrange an alternative way of paying these.
- Tell the bank holding your joint account about the split and they can make arrangements so you both have to agree to any money being withdrawn.
- Similarly, they can place controls on debts to prevent either of you from abusing joint arrangements. If you both have credit cards on one account, it makes sense to block them. If your ex is using the card for everyday expenses, they need to know as soon as you’ve done it, so they can find an alternative.
- Stop fighting with your ex
You don’t have to stay friends, but the more you can reasonably agree between you, the less you’ll spend on lawyers. This goes for the financial settlement, but also for arrangements for any children.
However, don’t let your ex use your efforts to stay on good terms against you. If they threaten to stop speaking or to take a more draconian approach unless you agree to their demands, then rather than being bullied into a poorer deal, your lawyer can take them on.
Once you have lawyers involved, it’s even more of a reason not to let this become a prolonged row – because each niggle you argue over will cost a fortune in legal fees.
- Get help from the right people at the right time
A straightforward divorce may be something you can handle alone, but if you have pensions, a property, significant savings and investments or children to consider, speaking to a lawyer and a financial adviser are the best ways to protect yourself from an expensive mistake.
If you need to talk to someone about the emotional upheaval, then make sure you’re using the right specialist for that too. Talking through your anger with your lawyer is expensive, and they’re not going to be able to help as much as a counsellor might.
- Pay attention to your pension
If your spouse has been building up a pension for years, pension specialists are particularly valuable. You should get a pension valuation as part of the financial disclosure, and it may be worth paying an adviser to check the numbers. They can also help you pick the most appropriate way to share the pension – whether one person keeps it and trades it against other assets; you split the pension pot into two today; or you agree to share it when it’s being paid out.
After the split, you also need to ensure you revisit your pension arrangements and work out how you can undo some of the financial damage from the divorce.
- Start rebuilding as soon as possible
You need to assess where you are and start rebuilding your finances as soon as you can. If you have run up debts or spent your emergency savings during the divorce, paying them off and building 3-6 months’ worth of essential spending in an easy access account are the priorities.
Don’t forget insurance too. If you’re relying on maintenance payments, you need to insure the life of the person paying them, to protect your family from all eventualities.
How your mental attitude can help you move on after a divorce
Susie Moore, one of the most successful freelancers and authors in the personal coach sector understands the emotional and financial roller coaster divorce can bring on a person, having divorced at the young age of 23. Moore talks about that time of her life in her book, Let It Be Easy. Instead of beating herself over her divorce or feeling she had to run out and find a new partner, she used the initial time after her divorce to focus on her positive beliefs and take comfort in her independence.
In a June 2021 she emailed her followers some insights from one of her blogs. She pointed out that “Divorce happens to a lot of people. Endings bring fresh beginnings.”
She relayed what she did in those first months after her divorce: “My mind, when programmed consciously, helped me heal from my divorce in my tender twenties. Here’s how you could use The Mind Motor Method (TMMM) for a life-altering event such as this…”
Remember: The most crucial part of TMMM is knowing that our beliefs create and set our thoughts in motion.
Here are some of the thoughts that got Moore through that rough, yet enlightening patch:
- Failure isn’t divorce; failure would be remaining stuck because I’m scared of change and judgment/disappointment from other people.
- I have a best friend who is loving me through this awful time – I’m so blessed. I’ll let her help me usher in a new beginning.
- Many celebrities like JLo and Eva Longoria are divorced – and hey, they’re all OK!
In her blog, Moore says, “It would’ve been easy to think – I have to suffer for years now. I have to pay for my mistake. I feel sorry for myself. It’s expected for me to feel scared and sad for a long time.”
Instead, she says she nurtured different beliefs: “Kind ones. Ones that led me to an expansive period of being alone and then meeting Heath from a steady, calm place.”
Moore met her now-husband Heath, who she has been married to for over 11 years just nine months after her divorce. But even if you don’t meet that right person just yet, take a cue from Susie, who took these steps during that transitional phase of her life after her divorce:
- Went to counselling.
- Went to IKEA.
- Bought friends cheap wine and Chinese food to help me put IKEA furniture together.
- Went to Tango classes.
- Bought scented candles (made my new home and life as cosy as I could).
- Said yes to all social invitations for a year to be nice and busy.