Neil Sedaka may have said it best: “breaking up is hard to do.” This is especially true when money is involved, and you don’t have to be named Bezos to feel pressure about what to do when it’s time for you to talk finances with your soon-to-be-ex significant other. It’s hard enough just to manage the emotional toll of a breakup, and most people’s minds are justifiably elsewhere, but it’s important to consider how to hit the reset button on your financial plan if you find yourself single again.

It’s Not Just a Long-Term Thing

Money matters are most important to review if you’ve been living together with your partner and have shared assets, whether that’s a place to live, a shared bank account, or personal belongings that you may have bought to enjoy together. However, even if you’ve just been dating for a while, your finances can still be affected. You may be used to distributing certain costs differently (isn’t splitting the bill on date night the thoughtful thing to do?), for example. The period after a breakup can also be financially challenging for those who want to make changes in their lives to help get over a failed relationship: you may want to change up your decor or start going to the gym again, but consider the impact of these newly added costs to your existing budget.

Papers, Please

What about a formal separation or divorce? These can become more complicated by far than an informal breakup – you’re not just putting each others’ things in boxes. The biggest step in dividing your finances is making sure you know exactly what you own and owe, both as an individual and as a couple. Most experts suggest that making a list will help you be more informed on how to divide your property. Well, actually, you should make two: one of all your shared and individual assets and one of your debts. Assets should include things like:

  • joint or separate bank accounts
  • RRSPs
  • RESPs
  • insurance policies
  • TFSAs
  • your home
  • investments
  • CPP or QPP credits
  • employer-sponsored pensions

Debts, on the other hand, include:

  • a personal loan
  • credit card debt
  • a mortgage
  • a car loan
  • student loans

Once these items are accounted for, you can speak to a financial advisor to determine whether there are any ambiguities as to who is responsible for each portion.

Don’t Let Debt Linger

Though you may experience lingering feelings for your ex, it’s important not to let financial matters haunt your post-breakup life. Debt, in particular, is important to clear up if you wish to “reset” financially after your breakup. You will be liable for any debts that are in your name only, but not for any which are just in your partner’s name. However, you may be responsible for any debts in joint names. Also, if your partner has a debt for which you have acted as guarantor, you will be legally responsible for paying it.

If you have joint debt, it can be critical to deal with it so it doesn’t come back to bother you. Decide together what you’ll do with the debt and how to go about repaying it – again, the advice of a professional financial advisor can be invaluable here. Be sure to cancel joint credit cards and divvy up any remaining balance by transferring it to cards held by each of you separately. Try to pay off any joint loans or refinance or transfer that debt in one person’s name. Remove your Ex if they are an authorized user on any of your credit accounts. Double check your credit report to make sure you haven’t forgotten anything – like credit cards you may have jointly applied for ages ago, to which one or other partner may still have access.

Your breakup might be hard to get through, but it’s worth making the effort to come out the other side of the toughest parts with the financial independence and security you need to move forward. It’s an investment in yourself and your future happiness.

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