Important Money Matters To Sort Out After Divorce

Ending your relationship with someone you vowed to spend a lifetime with is never easy. Getting a divorce causes a significant life change that is often complex and stressful. It involves coping with several issues such as division of assets, discussion of maintenance, and custody of the children. These issues bring forth emotional, economic, and legal considerations.

Divorce is not simplistic wherein one solution fits everyone else’s circumstance. It is case-specific as it takes the needs and means of each person into account. Even the length of your marriage affects the division of assets. For instance, if your marriage is brief, the court may decide to part you with the money you had before coming in to the relationship.

According to the 2013 Population Trends by Statistics Singapore, marital dissolutions are escalating with 7,386 in 2009 from 7,216 in 2008. With this increasing number of divorced couples, it is important to discuss the financial matters to sort out after the breakup.

1. IMMEDIATE FINANCIAL CONCERN

Your first concern shall be the recurrent household bills. If you had been paying your bills through a joint account, you have to make some arrangements with your bank to dissolve this account and pay through your personal account instead. Remember to update your GIRO arrangements as well.

2. MAINTENANCE AFTER DIVORCE

Maintenance is intended to cover the living expenses and necessities of the wife and her children. Under Singapore’s law, maintenance for the wife continues until she remarried or passes away while the maintenance for the children continues until the age of 21 or until graduation. The husband can pay the wife in a lump sum but only monthly maintenance is allowed for the children.

There is no specific amount or length of maintenance as the Family Justice Courts examine the situation to arrive at a reasonable and fair decision.

3. THE FAMILY HOME

One of the most daunting decisions you have to make (especially if you used your CPF savings to buy a property with your ex-spouse) is the housing arrangement. Are you going to sell your family home? Or will you keep it while the other one moves out?

If you intend to sell your house wherein CPF savings were used to purchase it, you will need to apply for CPF refunds to your respective accounts. Please visit the CPF Board website for more information.

Image Credits: pixabay.com (CC0 Public Domain)

Image Credits: pixabay.com (CC0 Public Domain)

Sources: 1, 2, & 3

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Singaporeans, Must You Discuss Your Salary To Your Spouse?

If you were tasked to participate in a television game show to test your knowledge about your spouse, how well do you think you will do? Getting your spouse’s full name correctly is easy. But will you still get it correctly if you were asked about your spouse’s exact income?

According to a 2015 survey by Fidelity Mutual, 43% of the participants had no clue about each other’s earnings. The percentage of couples who were ignorant about their incomes have grown compared to the survey 3 years ago. Furthermore, 1 in 10 people was off by US$25,000 (S$33,700). This is no laughing matter.

You cannot blame these numbers on poor communication alone as the ever-changing economy may also be the malefactor. A shift in the workplace is seen as many employees become freelancers while others work on multiple jobs with unpredictable hours (much like Uber drivers). If your spouse belongs to the cluster of people whose income is relatively unpredictable, you still have to be informed.

Asking anyone how much they make is a taboo subject especially in our Asian culture but if you are planning to spend the rest of your lives with the person, you have the right to know. Your annual household income dictates how you are able to save and your quality of life in general. Knowing each others’ assets and liabilities can help plan your future well (including your plan for retirement).

To put that in perspective, you have to realize that our lives are filled with uncertainties. Emergency expenses, hospitalization fees due to chronic illness, loss of a spouse and unemployment can affect your finances. You have to be prepared. This is why it is vital that married couples communicate and cooperate in managing their finances no matter how much they earn.

As you begin to open up about this subject, it can be uncomfortable for some and fight-inducing for others. Given the extent to which our society judges the person based on how much they earn, this particular subject is susceptible to dangers. Dangers that the other person can feel insecure, frustrated or inferior. But as Richard Vondra, the first Vice-President of Spire Investment Management, once said: “You don’t have to be rich, but you do need to make sure you’re able to support each other.”

Beyond your fear of being judged, knowing your spouse’s income is one of the most basic elements of your finances.  Moreover, it may just be the key to your marital bliss! Studies have shown that the happiest couples talk about money and stay out of debt.

Image Credits: pixabay.com (CC0 Public Domain)

Image Credits: pixabay.com (CC0 Public Domain)

Ask yourself: “Will having this financial information change my life?” Then take action based on your answer.

Sources:  1, 2, 3, 4, 5, & 6

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Important Money Matters In Marriage

As you may know, money is one of the biggest reasons why couples get divorce. Perhaps the reason why people fight most about finances is because of its measurable nature. With money, the give and take parts are quantifiable. Thus feelings of inequality and resentment can arise.

Discussing money matters may not seem romantic but it is very essential. Here’s where you shall start:

1. DETERMINE YOUR FINANCIAL GOALS AND RESPONSIBILITIES

Setting long-term and short-term financial goals such as establishing realistic budget should be done together. Along with the goals, you must assign financial responsibilities to each other. Who shall pay the utility bills? Who shall do the bookkeeping? Consider various factors such as time, knowledge and skills when deciding which of you shall take the primary responsibility for each task.

2. CONSIDER GETTING INSURED

The vow of “for better or worse, for richer or for poorer…” entails an important promise to live in a financially able home. Buying appropriate insurance coverage, to safeguard you from unforeseen financial hardships, can help embody this vow. Consider these types of insurance:

a. Life Insurance: This policy protects you and your dependents by giving the sum assured under certain circumstances such as being permanently disabled or critically ill. The agreed amount of money is intended to help you and your dependents meet your financial needs.

b. Health Insurance: This policy covers accidents, illnesses, and disabilities that affects your health. To help you and your family deal with the expenses, different health insurance policies are available in the market.

c. Home Insurance: This policy is designed to protect your home and its contents as well as covering any renovation work. Usually, homes that are less than 10 years old or those that are renovated within the last 10 years cost less to insure.

3. ESTABLISH A REALISTIC BUDGET

If you are planning to spend your lives together, it is only fitting that you learn to manage your finances as a unit. Once a month, evaluate your expenses and review important documents (e.g., credit card billing statement or utility bills) to help you create a realistic spending and budget plan for the weeks ahead. Make this a healthy habit to shield your family from piles of debt.

4. DISCUSS ABOUT THE NECESSITY OF A WILL

A Will is a legal document that communicates an individual’s final wishes. It determines not only the distribution of your properties but also the guardianship over your children in the event that both you and your spouse die.

Some people find it difficult to discuss about creating a will as the thought of it seems unpleasant, pessimistic, and morbid. However, think of it as an insurance tool that protects your assets and ensures its smooth transition. It is ideal to make a Will before having children or while they are still young.

Image Credits: pixabay.com (CC0 Public Domain)

Image Credits: pixabay.com (CC0 Public Domain)

Sources: 1, 2, 3, & 4

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5 FUN-astic Activities That Teach Your Kid About Money

Money gives people, of all ages, the decision-making opportunities they need in life. Educating your children to make wise money decisions earlier on will affect their finances in the long run. Why not teach them about money with a hint of fun?

1. CREATE YOUR OWN BILL

Aside from language, art is one of the child’s primary modes of communication. Let your children understand the importance of the design of a note by letting them create their “own S$2 bill”. Use crayons, markers, and pens for this craft. Tell them to use their imagination to decide whose face they shall put in the front and what infrastructure they shall put at the back.

2. USE A PIGGY BANK OR A MONEY JAR

Setting up realistic goals is the foundation to learning about the value of money and saving. Ask your children what they want to buy with their money. After identifying the short-term goal, provide your child with a small piggy bank or a money jar where they can fill up their savings with. Have your child draw the picture of the specific toy on the side of the piggy bank or the money jar.

You may also want to help your child understand that some items will take longer than others to save for. For these long-term goals (e.g., going to Disneyland Hong Kong), provide them with a bigger money jar.

3. SAVE BY SORTING

Based on experience, 3-5 year old kids love to sort things. It trains them cognitively too! Incorporate money in this enjoyable activity by letting your child sort coins in the different denominations of 5, 10, 20, and 50 cents. If your child correctly sorts those coins, reward him or her with your spare change. Ask your child to save this money inside the piggy bank or the money jar.

4. PLAY “FINANCIAL” GAMES

Preaching about money can be a boring subject for kids but if you open up the discussion with a game then that shall stir things up! Play games that teach children about financial concepts. Such games include Monopoly and The Game of Life. They will not only have fun but it will also shape their money management skills.

5. TAKE ADVANTAGE OF TECHNOLOGY

Use technology to your advantage by letting your child watch free videos that teach the basics of making and saving money. For example, your preschooler can learn about salary by following these steps:

a. Describe your job to your children. You may even bring them along one in your workplace and give them a tour.

b. Introduce this video of a farmer that gets paid for supplying milk. This short video explains the concept of money to children in a simple and animated manner.

Or you may print this colorful and informative activity book by Sesame Street.

Sources:  1,  2, & 3

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You Need To Answer These 6 Essential Money Questions Before Getting Married

1. HOW DO YOU SPEND?

Your future spouse’s spending habits is one of the most important things that you must uncover. Whether you are a saver or a spender, your spending habits can influence the growth of your wealth. Discuss your this matter while keeping an open mind. Then, brainstorm on how you can blend your distinct spending habits in order to manage your wealth as a couple.

2. ARE YOU SPENDING A LOT FOR YOUR WEDDING?

Some people dream of lavish wedding ceremonies while otherS prefer simple gathering. As a unified couple, plan how much you are willing to spend on your wedding day.

If you want to save money, schedule your big day during off-peak months. Usually, getting married in “off-peak” months such as November, March, and April can be less expensive than marrying in “peak” months such as December and February. Save even more money by scheduling your honeymoon when the hotels and resorts are off-season.

3. DO YOU WANT TO HAVE A PRENUPTIAL AGREEMENT?

Even if we live in the most expensive city in the world where finances shall be carefully planned, do not assume that your fiancé is comfortable with pushing through a prenup. A prenup may suggest lack of trust in one party as you are planning for unforeseen divorce. Aside from this, talking about monetary and property division can make the marriage sound more like a business matter. Truly, this is a sensitive subject matter that should be handled with care, love, and honesty.

4. DO YOU HAVE EXISTING DEBTS?

To prevent unforeseen monetary issues, understand each other’s view by explicitly discussing your differences on financial issues. For honesty’s sake, show a copy of each other’s credit report. Know what your debt and income are actually worth so that you can realistically plan on how to pay for the remaining debt. Your partner’s lack of credit history will reflect on your credit score if you combine accounts.

5. SHALL YOU OPEN A JOINT ACCOUNT?

There are undeniably advantages and disadvantages to opening a joint account but it all comes down to your spending habits. Discuss whether you want to open a joint account solely because of the household bills or your emergency fund. Having a separate bank account is acceptable but, you have to tell your spouse about it.

6. HOW WILL YOU PAY THE BILLS?

Do not assume that your future husband has got all the bills covered for you. Instead, you must openly discuss how you will split the bills. If you come from a multiracial background, it is better to understand money with respect to each one’s culture.

Image Credits: pixabay.com (CC0 Public Domain)

Image Credits: pixabay.com (CC0 Public Domain)

Keep in mind that your goals are the same – to efficiently spend and save as a couple. As a team you may utilize your partner’s credit card to make use of the grocery rebates while the other takes care of the grocery shopping itself.

Sources: 1 & 2

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