Managing Finances After Separation


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Managing Finances After Separation

Managing finances after separation and divorce is not simple and becomes even more complicated. Putting in place a clear plan and considering the practical arrangements will assist you to stay on track financially and ensure you have an accurate understanding of your finances.

Here Are Our Top 10 Tips for managing finances after separation


1. Close Joint Accounts/Credit Cards

Minimise the number of joint liabilities. When you decide to separate, you should ideally close ALL joint accounts. Money within the accounts can be divided equally or as determined by your needs. Open an individual account and make sure that the other party doesn’t have access. Close ALL joint credit cards and store cards. If you don’t, you will continue to be responsible for any debt accrued by the other party.

2. Change PINs and Passwords

Change your PINs and online banking password.

3. Update Information (Rental Agreement, Utility Bills)

If renting and the lease is in your name, you will be liable for any unpaid rent, or damage even if it is you that has decided to leave the home. 

4. Update Wills, Insurance, Super, Powers Of Attorney

Consider speaking with your lawyer to update documents to protect your wishes. Separation and divorce do not automatically negate what is stated in these legal documents.  

5. Make a List of Debts

Make a list of all debts at the point of separation. Make sure you understand the extent of liabilities. Then, make a list of all regular repayments such as car payments, home mortgage, personal loans, etc.

What income is needed to support the 2 separate households? Will you need to try and remain under the same roof? This is very important in managing finances after separation so you won’t fall behind on payments.

Ideally, you should try to reach an agreement with the other party as to how liabilities will be paid moving forward.

6. Child Support Payments

The spouse who has primary care (commonly known as “custody”) of the children may be entitled to child support. Seek legal advice about the different options available. Consider whether a private child support agreement is appropriate or whether the Child Support Agency should be contacted.

7. Assess your situation – Consider Assets, Liabilities, Expenses, Income?

In managing finances after separation, each party needs to disclose their financial position so that you can try and come to terms with the reality of running 2 separate households and eventually negotiating a division of financial ties. For a useful template click on this link: Stocktake Calculator.

It is best to speak with a lawyer regarding the division of large assets such as real estate or superannuation.

(Read more about Property Settlement.)

Smaller items such as household contents are best divided by agreement between you and the other party. Prepare a list. If you can, work through the list together and try to be fair.

8. Create a Budget

Separation normally means 2 households and twice the expenses. When managing finances after separation and divorce, it is best to write a new budget based on your income and increased expenses. Use a budget planner or other tools available online to make this task easier. Help can also be sought from a professional financial counsellor/adviser. 

9. Track Events and Keep ALL Important Documents

Keep a diary. Record any key points. This will be helpful if your matter doesn’t resolve amicably and you do need to commence an Initiating Application for Property Settlement in the Family Court.

If it is you that is leaving the family home, take with you:

  • Your personal documentation – tax returns, bank statements, records relating to assets you may have brought to the relationship as an initial contribution, documents relating to inheritance etc.
  • Documents relating to joint assets or finances – perhaps you have a family business, there may be a family trust, or most commonly there is a mortgage secured by the jointly owned family home.
  • Take at least a copy of any important documents such as the marriage certificate, title deeds, insurance policies, Wills etc.

Ideally, you should seek legal advice. Once you leave the home, you may lose the opportunity to obtain documents necessary to have an understanding of the family finances.

10. Seek Legal Advice even if there is an amicable private settlement

Even if separation is amicable, you should still seek legal advice from your lawyer as complex issues can arise when dealing with financial matters following separation and divorce.   

An amicable agreement is not binding unless documented as required by the Family Law Act. Consent Orders filed with the Family Court of Australia or a Binding Financial Agreement are the only option to ensure that you don’t face an application for property settlement years down the track.

Despite an amicable agreement, if things turn sour, there is nothing to prevent one party from applying to the Family Court for Property Settlement Orders. The Court considers the value of the asset pool at the date of trial, not separation.

Related: Alternatives to Consider Before Going To Family Court


If you decide to separate, taking practical steps at an early stage will help you work towards the best possible resolution of financial and property settlement issues.

Take it one day at a time and work your way up to financial freedom.