Navigating Finances After a Divorce or Separation

Going through a separation or divorce is one of life’s toughest transitions, emotionally and financially. Whether the split was expected or came out of the blue, it usually brings big changes to how you manage money. But you don’t have to have it all figured out straight away. With the right steps and support, you can get your finances back on track and create a secure foundation for your next chapter. This guide offers practical, compassionate advice on navigating finances after a divorce, including budgeting, debt, retirement planning, and caring for kids after separation.

1. Resetting Your Budget: Start with What’s Changed

The first thing you’ll need is a clear view of your new financial situation. That means revisiting your budget, or creating one for the first time.

Start by writing down your income. Include wages, government payments, child support, and any other money coming in. Then list all your expenses: rent, groceries, utilities, transport, school costs if you have kids, and anything else that comes up regularly.

Separate your spending into:

• Essentials: things you can’t live without such as housing, food, bills, healthcare.
• Non-essentials: subscriptions, entertainment, takeaway, and other “nice to haves.”

This helps identify where you might cut back if you’re feeling the pinch. Use a budget planner or app to track everything, and aim to spend less than you earn. If that’s not currently possible, that’s okay – this is just about knowing where you stand and starting to make adjustments.

Don’t forget to update your financial details with relevant government services. If you’re eligible, single parents and low-income earners may qualify for additional support such as Parenting Payment or Family Tax Benefit.

2. Taking Charge of Debt: What’s Yours, What’s Theirs

Money and relationships often get tangled together – and untangling shared debts can be tricky. If you had joint credit cards, loans, or a mortgage, you’re likely both still on the hook for them.

Start by separating joint accounts as soon as you can. Contact your bank to close or freeze any shared credit or redraw facilities, and make sure your ex no longer has access to your individual accounts.

Be aware that for joint debts, even if your ex agrees to take responsibility, lenders can still come after you if repayments stop. That’s why it’s important to speak directly with your lender and explore options like refinancing or hardship arrangements.

If debt repayments are unmanageable, don’t ignore the issue. Many lenders offer support for people experiencing financial stress. You can also speak to a free financial counsellor who can help you work out a plan and even negotiate with creditors on your behalf.

Focus on what’s most urgent – usually the mortgage or any loans tied to assets like your car. Unsecured debt like credit cards can be tackled next.

3. Thinking Ahead: Superannuation and Retirement After Divorce

It might feel strange to think about retirement while sorting through a breakup, but your future self will thank you. Superannuation is often one of the largest assets in a relationship and may be included in your property settlement.

Super can be divided between partners after separation, even if the funds won’t be accessed for years. This is usually done through a legal agreement or court order. If you’re going through this process, speak to your super fund and consider getting legal advice to make sure everything is handled fairly.

Once the dust settles, take a fresh look at your super. How much is left? Is it enough for the retirement you want? You may need to review your investment strategy, consolidate accounts, or boost contributions over time to rebuild.

And don’t forget to update your nominated beneficiary. If your ex is still listed, they could end up receiving your super if something happens to you, even if you’ve moved on.

4. Extra Considerations for Parents

If you’ve got children, figuring out finances after a divorce can carry even more weight. You’re not just planning for yourself anymore – you’re providing stability and care for your kids during a time of big change.

Child Support and Shared Expenses

Parents can either set up a private agreement for child support or go through the government’s child support scheme. Payments are based on income, care arrangements, and the number of children. These payments help cover everyday costs like food, clothing, school expenses and housing.

It’s also a good idea to discuss how you’ll handle one-off or shared costs, such as school camps, uniforms, sports fees, or medical bills. Clear agreements (ideally in writing) can help avoid misunderstandings.

Government Help for Single Parents

If you’re the primary carer, you might be eligible for Parenting Payment, Family Tax Benefit, or the Child Care Subsidy. You may also qualify for Rent Assistance if you’re living in a private rental. To access these, you’ll need to update your relationship status and financial information with Centrelink. Most of this can be done online via MyGov.

Budgeting for Kid-Related Costs

Raising kids is expensive. After separation, you might find certain costs have increased – especially if you’re now the sole earner. Review your budget to make sure there’s room for essentials like school supplies, lunches, uniforms and extracurricular activities. Planning ahead for big-ticket items like back-to-school season can help ease the pressure.

5. Where to Turn for Help

You don’t need to go through this alone. There’s a lot of help out there if you know where to look.

• Financial counsellors: These professionals offer free, confidential help for people in financial stress. They can help you make a budget, understand your rights, and negotiate with lenders.

• Centrelink: Provides financial support and services for single parents, carers, and people experiencing financial hardship.

• Legal services: Community legal centres and Legal Aid offer free or low-cost advice, especially if you’re navigating property settlements, custody agreements or super splitting.

• Mental health support: Financial stress can take a toll on your wellbeing. Services like Beyond Blue or Lifeline are available for emotional support and crisis counselling.

Final Thoughts

Sorting out your finances after a divorce or separation is rarely easy, but it can be the start of something new, and even better. Getting your finances sorted might feel overwhelming now, but taking it step-by-step makes a world of difference.

Start with the basics: know what you’ve got, what you owe, and what you need to cover. Use a budget to stay on top of your spending, tackle debts with confidence, and don’t forget to look ahead to your retirement.

And most importantly, lean on the support that’s available. Whether it’s financial advice, legal help, or emotional support – you’re not in this alone.

Any advice is general in nature only and has been prepared without considering your needs, objectives or financial situation. Before acting on it, you should consider its appropriateness for you, having regard to those factors. Before making any decision about whether to acquire a financial product, you should obtain the Product Disclosure Statement.