How to sort out the mess of post-breakup finances

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Breakups are the worst. As if the emotional turmoil isn’t bad enough, there’s the logistical headache of figuring out how to handle the money part of the breakup. Six years into my last relationship, my live-in boyfriend at the time had quit his job to focus on applying to grad school, and I agreed to pay our monthly rent in its entirety in the meantime, rather than splitting it down the middle, as we had usually done. We broke up shortly thereafter. He skipped town before we could sort out our finances, leaving me no choice but to pay rent until our lease ended.

After a few years, I finally managed to get my finances in order, although now I realize I could have benefited from a bit more guidance. I spoke with a few financial planners about how to manage your finances during and after a breakup, which can hopefully make the process easier if you and your partner have decided to call it quits.

Talk about how to handle any shared bank accounts

“If you share a bank account, make sure to immediately have a conversation about how you want to split the funds in it,” says Dominique Broadway, a financial planner and founder of Finances De·mys·ti·fied (a money management bootcamp, essentially). If you’re worried your ex might remove all the funds from the account — which Broadway has seen — call your bank and request to freeze the account until you have that discussion.

If you didn’t share an account, but your ex had access to any of your personal accounts, remember to reset the passwords for them, says Priya Malani, founding partner at financial planning firm Stash Wealth.

Talk about how to handle any shared debt

If you and your ex co-signed for a credit card, car loan, and/or mortgage, sit down together and hash out a plan for paying off that debt. It might be awkward, but putting those feelings aside momentarily is necessary.

Regardless of how much each of you was contributing to repaying it — say, if your ex put more toward monthly payments than you did — you’re both liable if both your names are on the account, Broadway says. Maybe your ex could Venmo you a certain amount each month to help you make the credit card payments. Or, if they end up keeping the car, maybe they can be the one responsible for the monthly car payments.

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Malani, on the other hand, suggests just splitting shared debts 50/50, “even if that’s not a true representation of the breakdown of who incurred what.” Nickeling and diming your ex could result in emotional damage that feels way worse than paying up for debt that may not be entirely yours. After all, “you can always make more money.”

Regardless of how you go about dealing with your debt, just make sure to pay it off, since failing to do so will negatively affect you and your ex’s credit, and/or your ability to maintain your car or home, says Levi Sanchez, a financial planner and founder of financial planning firm Millennial Wealth.

Get caught up if your ex was the one overseeing the finances

If your partner was the one in charge of the finances in the relationship, it's important to get a hold on what exactly is owned jointly and what you're entitled to,” says Sanchez, who suggests drawing up a personal and joint balance sheet. “Being left in the dark could lead to bad consequences,” like failing to pay off a debt you didn’t know you shared. Speak with a financial planner or other trusted professional to help you figure out, for instance, what questions to ask your ex, or what statements to request from them.

Once you’ve had the conversation with your ex about what you’re each walking away with, a financial planner can also help ease you through your transition into greater financial responsibility as a single person, Broadway says. They might help you clean up your credit or plan a new budget, for example.

Reassess your expenses and create a new budget

Recalculate your income now that you’re no longer in a joint income household, as well your expenses as a single person, Sanchez says. For instance, Broadway notes, your groceries might be cheaper now that you’re buying them for only yourself. She also suggests asking yourself if you can afford the place you shared with your ex; if you decide to move out, determine the budget for your future pad. “You also want to ensure now that you’re on your own, are you saving enough for retirement, and goals like travel, gifts or other priorities you may have,” Malani adds.

Call in a third party for help if you need it

“Handling money during a breakup is usually very contentious or very fair,” Malani notes. “It’s almost never in between.” Obviously, if you’re on speaking terms, working through it with your ex is the ideal route. “If you can do it without a third party or mediation, great, but don’t hesitate to include a third party to help,” Malani says. Reach out to a financial therapist, counselor, or planner to start. Consult with a lawyer — or two, one for each of you — if it gets contentious.

Figure out your options if your partner suddenly dips

If your ex abruptly bounced, like mine did, you may have no choice but to eat some of the costs. Thankfully, my ex and I didn’t share any debt. If you and your ex did, they clearly don’t care about their credit — but you care about yours, so you may just need pay off the debt yourself, Broadway says.

“Handling money during a breakup is usually very contentious or very fair. It’s almost never in between.”

Talk to your leasing department if you and your ex shared an apartment. If you were both on the lease and approved for the apartment based on your joint income, they might lower your rent, since your income has technically changed, Broadway says. If you’re on the lease, but your ex isn’t, they may let you out of the lease as long as you prove you can no longer afford to pay rent.

When I told my leasing office about my situation, they said I could either break the lease, which carried a penalty, or continue to pay rent until the lease ended in four months. Since the latter option turned out to be the cheaper one, I sucked it up and accepted the experience as a lesson. When my then-partner asked if I could pay the rent in full, at least temporarily, I knew our relationship was already on the rocks. I probably should’ve declined, or discussed how to divvy up the rent before things got heated and reached a breaking point.

Indeed, in a more ideal scenario, you and your partner would have tough conversations, like how to deal with shared bank accounts or debts in the event of a breakup, when things are still running smoothly, Broadway says. “Once things get ugly, it’s not as easy to have those conversations.”

The best-case scenario, though, would be to talk about finances, but avoid co-mingling them unless things are “absolutely official,” Broadway says. That means if you’re married, since certain legal structures would compel each of you to contribute to paying off shared debt, for instance, if you divorce; or if you’ve agreed you’re in a long-term partnership and want to build together, financially. Otherwise, “try not to get into these situations.”

But of course, we’re all humans who sometimes make less-than-ideal decisions, especially in the throes of a relationship. With some communication and careful planning, it’s still possible to bounce back financially after a breakup, and bring what you’ve learned from the process into your next relationship.