The facts you need to know when support ends
Divorce or separation, be it marriage or de facto, can attract a heavy emotional toll, but the financial impact can be far reaching and long lasting. After a few years of living apart and managing your new financial arrangement you tend to survive, somehow, but there does come a time when the child support either stops coming in or stops going out.
This can occur in many ways, some known and some unexpected when:
Your child(ren) turn 18
Your ex-partner’s income/assets decrease or they are made redundant
Your income/assets increase
We have compiled a list of financial considerations for you or your family and friends who may need some financial guidance in this area.
Remember, although child support may have or soon will be stopping, you still have a responsibility (as all parents do) to help your children in emergencies and special circumstances and their cost of living until they can fully support themselves. Ensure you have a budget for that as well. Consider giving the children some weekly income and help them to plan, budget and save for their future.
If your child support is ending within the next few years (either in or out) it would be wise to start working on your recovery plan – the sooner the better.
No matter what your circumstances, we are here to help support your financial future.
Child support (CS) finishing in the next few years or less
If you will no longer be receiving
Try to start living off your own income without CS as soon as possible.
Pay off as much of your existing mortgage as you can to build up some equity for future unforseen hardship.
Create a budget and stick to it.
Look for a better paying job.
Increase your working hours if you can.
Reduce your bad debts (credit cards and personal loans) as quickly as possible.
Keep your credit rating clean.
Don’t apply for any unnecessary credit cards or personal loans.
If you will no longer be paying
Plan for the additional income that will be left in your pocket. Don’t waste and absorb it on everyday living when you have a new opportunity to rebuild your financial future. Of course perhaps treat yourself, but consider the future first.
Put extra payments into your offset account if you have one or save the balance in the best interest bearing account you can find.
Reduce your bad debts (credit cards and personal loans) as quickly as possible.
*Disclaimer: This article is generic in nature. All investment decisions should be considered wisely and based on your personal and financial circumstances. Seek proper advice before committing to any course of investment action. This is not deemed as advice.