Pay Dirt is Slate’s money advice column. Have a question? Send it to Kristin and Ilyce here. (It’s anonymous!)
Dear Pay Dirt,
In a few weeks, I’m ending an almost 10-year relationship. Our finances have been merged for the majority the time.
My wife (we’re both women) has handled the finances since we merged them. She made a lot more money than me, and then I went back to school, so she’s made all of the major financial decisions more or less independently. I’m starting work in my new field next month, which is why I can finally work towards separating.
I don’t intend to take any money from our shared accounts, because due to complications with the small business she started and my lack of income for the last couple years, we have no savings and are basically being kept afloat by her family at this time.
Our relationship is unhealthy for a number of reasons, and I’m not expecting the separation process to be amicable. I won’t be able to ask her questions about how to handle financial things going forward. I know I need a budget, and I need to get auto and renters insurance (though I don’t know how I’m supposed to choose insurance or anything else, and what I can track down on the internet can be confusing). I’m getting my own bank account/credit card (everything we share is in her name). I wonder if my credit is going to be impacted by being removed as an authorized user on our current accounts, and if there is anything else I should be aware of that I might not be thinking of? I’ll take basically any advice you have.
—Adult Starting Over
Dear Adult Starting Over,
Creating a feeling of ownership over your finances after all that time can feel daunting. But it’s never too late to learn how to be smarter about money. Let me address a few of your different concerns:
Credit: Being removed as an authorized user might temporarily lower your credit score since you’ll lose that account’s history, but it shouldn’t devastate your credit. However, it could lower your credit score enough to make it hard to rent your own apartment. Pull a copy of your current credit score so you have a baseline. Start building your own credit history immediately with that new credit card—use it for small purchases, don’t charge more than about 30 percent of your maximum credit limit, and be sure to pay it off monthly. You should start to see your credit score rise in about six months. If you can afford it, and if you’re leaving soon, you may want to rent the apartment while you still have your current credit score.
Insurance: You’ll need health insurance until you get your full-time job, auto insurance, and renter’s insurance. For auto and renters insurance, get quotes from 3 to 4 major insurers online or by phone. For renters insurance, you need enough to replace your belongings—$25,000-$50,000 is typical and costs around $15-$25 monthly. Auto insurance minimums vary by state, but add comprehensive/collision if your car has value. Shop for health insurance policies at Healthcare.gov.
A good website for basic information about insurance is run by the Insurance Information Institute. You might also try the Consumer Financial Protection Bureau for information about warranties and other types of insurance policies. Before you put down your credit card, be sure to search the name of the company and “complaints” so you know what kind of service you can expect.
Budget basics: Track every expense for a month. You can do it in Excel or Google Sheets or even use a notebook. Your budget should cover housing, utilities, cell phone, internet, food, transportation, insurance, minimum debt payments, and a small emergency fund ($500-$1,000 initially). Then, see what you have leftover from your job. If you can, make sure to start building up that emergency fund and then max out your contributions to your retirement account and a Roth IRA, if you’re eligible.
While you’re hoping for a clean break, you might want to review any joint debts—you may still be responsible even after separating. Be sure to change your address with the post office, banks, employer, IRS, and on your driver’s license. You might also update the beneficiaries on any financial accounts or insurance policies and consult with a family law attorney about your rights.
Finally, no one likes these kinds of surprises. Walking out after all these years is a big move. Whatever troubles you’ve been having, unless you’re in danger, it’s kinder to start a conversation about changing your arrangement after 10 years of being together than to simply disappear one day.
—Ilyce
More Money Advice From Slate
I am divorcing my ex. We jointly own a home and are both on the mortgage. I live there, and we split custody of a child. The house was appraised at more than what we paid, but less than what Zillow and Redfin value it. My ex wants to refinance it into my name for the entire appraisal amount.
Based in New York, Stephen Freeman is a Senior Editor at Trending Insurance News. Previously he has worked for Forbes and The Huffington Post. Steven is a graduate of Risk Management at the University of New York.