Theresa Quick • Feb 05, 2020
Breakups are emotional, messy, difficult and can also have a big impact on personal finances. It’s time to start again - and splitting assets and moving out can be challenging. Make sure you help protect your credit and build a strong foundation with these five steps.
If you haven’t already, make sure you get your free credit score - you’re going to need it for this new journey on your own. Understanding where all your earnings come from, all the bills where all your savings and retirement accounts are and more will help you when it comes time to separate your finances.
Your credit score is calculated through careful analysis of information in your credit report by one of Canada's two credit bureaus - Equifax or TransUnion. Financial institutions use this information to help make decisions about the services and products they offer you, such as your interest rate and insurance premium. Credit scores range from 300 to 900 (depending on the scoring model) and the higher your score is, the easier it may be for you to access these financial products and services. Credit scores, in the eyes of financial institutions, reflect your behaviour when it comes to credit.
This information also relates to your debt: how much you have, how long it takes you to pay back, what type you have, and how long you’ve had it. You can check your credit score in less than 3 minutes with Borrowell and it won’t affect your credit score.
Review your credit report and your bank account and make a list of any joint accounts or debts. In an ideal situation, each person should move debts they are responsible for into their name and transfer credit card balances if necessary. But, relationships don’t always break even, so make sure you consider the following:
Most couples split living expenses, which means your monthly costs are about to double. This can be a serious shock particularly if your ex was the primary earner. Here are a few ways to stick to a budget and save.
There are also some fabulous free budgeting and saving tools available in Canada, including:
If you were sharing a living space with your partner, you’ll need to look for new accommodation. Keep in mind that you’ll need to budget for first and last month’s rent and moving costs, which can quickly get expensive.
Chat with family and friends. Your network is a good place to start your search. Someone you know might know someone who is leaving town, or needs a roommate, or maybe one of your friends saw a for rent sign up the street. You can also set up Google Alerts with rental keywords relevant to your prospective neighbourhoods. Also see our blog about how to find a rental apartment on a budget!
Regardless of your situation, having a safety net or emergency fund can make a big difference. Breakups can be pricey, between the increased costs and money spent to rebuild - you might need to relook at your savings.
You’re more likely to make steady progress towards your financial goals if you set up automatic payments and/or deposits. By doing this, you’re prioritizing your goals, and forcing the rest of your life to fit around them.
Lastly, in a world where we are surrounded by people trying to put on a front (e.g. being #couplegoals, #wealthy, # successful, etc.), it has become more and more difficult for us to admit that our lives aren’t perfect. Relationships are tricky, and nobody wants to admit that theirs has fallen apart or that they’re experiencing financial struggles. It’s these difficult moments in our lives that make us stronger and more resilient. Be sure to take the time to focus on friends and things that you love during this time of transition.
Borrowell® is a registered trademark of Borrowell Inc. All Rights Reserved. The Equifax credit score is based on Equifax’s proprietary model and may not be the same score used by third parties to determine your credit profile. The score provided to you for educational use is the Equifax Risk Score.
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