Money
How to reframe your finances after divorce
Divorce can blow your emotional and financial world apart, but as Lucy Bloom points out, it may also be a chance to rebuild stronger.
By Lucy Bloom
Divorce is often thought of as a fresh start, but in financial terms it can feel like stepping backwards off a cliff with your handbag on fire. With one major marital decision, one household usually becomes two, and the cost of running life doubles, while emotional stress multiplies like rabbits on Viagra.
Add to that the potential expense of legal proceedings, and THAT is why divorce ranks among the most destabilising life events, up there with the death of a loved one. Divorce combines heartbreak with money, loss of identity and fear, then forces people to untangle it all in a win-lose arena.
I’ve been divorced for 10 years and am glad it is long behind me. Every divorce is unique but I’ve learnt that there are practical, smart steps that will help most of us steady the ship (wreck) and avoid sinking under the weight of financial chaos.
Secure your own financial footing
Your very first move should be to open a new bank account in your name only. Redirect your salary there immediately. New accounts come clean, without long-forgotten direct debits. This is about more than independence from your partner: it’s about creating a safe base from which you can make clear-eyed decisions without worrying about shared accounts or withdrawals you can’t control. Keep this discreet if you feel unsafe. Then go talk to an accountant. Accountant before lawyer? YES.
“Engage an accountant or financial expert in family law before engaging family lawyers,” advises Leah Oliver, Chartered Accountant and director of Minnik Chartered Accountants. “Then you have your financial vision and settlement plans ready to present to your legal team, and keep your communication streamlined, efficient and cost-effective.”
A good accountant will give you a checklist like this:
- Map out all family assets, debts, income, expenses and shared obligations – death-by-spreadsheet will save the day
- Cancel any non-essential shared expenses and avoid large purchases, investments and new debt for now
- If the plans for your children have been decided, and you are the primary carer, apply for Child Support. You don’t need court orders to apply
- Don’t talk about finances with your partner until you have a plan. Limit conversation to matters of the kids’ wellbeing, routine and protection.
- Never drain joint accounts without legal advice
Engage a certified divorce coach
My next step: engage a certified divorce coach. You need to deal with the emotional chaos, personal loss and daily practicalities before you start paying a legal team to finalise this beast. If you ever need someone compassionate to hold your hand, this is the time.
“A divorce coach is a wise investment which ultimately lowers legal fees and gives you a clearer head for decision making,” says Accredited Family Law Specialist Jennifer Hetherington of Divorce Hub. “Unless there are urgent legal issues to address, most people benefit enormously from working through the emotions of their separation, before working with a lawyer.”
Contain legal costs before they blow out
Lawyers are vital in some circumstances, but they are also very expensive. I have a dear friend who has already blown $400K on a custody battle that has not yet concluded.
Instead, agree with your ex – if at all possible – that you will not funnel every message or decision through legal letters and long affidavits. Save the big-ticket items for legal advice and keep smaller conversations human-to-human. Otherwise, you risk handing over a significant chunk of your wealth just to argue about who gets the toilet brush.
That’s a true story, by the way. I had a friend argue via $600-per-hour lawyers over who gets the toilet brush, just to annoy his missus. He eventually spent more than $200K on his divorce AND HE DID NOT GET THE TOILET BRUSH.
“Find a lawyer who works hard to mediate an agreement without marching off to court,” says Jennifer. “Once you are in front of a judge you have lost all control of the matter and costs are high.”
One of the most valuable conversations I have ever had in my entire life was a short chat with the wasband. I said: “Let’s just make a $150K donation to a charity rather than give all our money to lawyers.” Something about that suggestion landed well with him, and we did not engage lawyers until the very last moment before the matter was rubber-stamped by the court. Save yourself. Save your cash.
Consider low-key mediation to nail down the main plan. I drafted a plan for our financial settlement with my accountant, then we had a family friend, who we both respect, sit with us to talk it through. The version that was finally agreed upon was very close to that initial conversation. Did we behave like idiots towards each other before, during and after the court rubber-stamped the divorce? Why, yes, yes we did. But we also saved a lot of cash through mediation and smart use of lawyerly advice.
Get forensic with your budget
Divorce is a wake-up call to know, not guess, where your money goes. Write down every outgoing expense, then sort them into essentials, negotiables and nice-to-haves. Cancel duplicate subscriptions. Look for opportunities to share costs – perhaps carpooling with other parents or splitting after-school care duties. Even small tweaks can free up breathing space.
Try this: 101 clever ways to save money and live a richer life
There are some clever apps for tracking your expenses, like GoodBudget and Every Dollar. When I did this, I discovered I was spending $4K a year on gifts and far too much on what could be classed as luxuries. Easy fix.
Build a new money mindset
Divorce shifts your entire outlook on what stability means. For some, it’s about buying a place that’s truly theirs. For others, it’s learning to be okay with living with family or renting a tiny place while saving steadily. And for many, it’s about realising you can make big, bold financial decisions without needing consensus – a liberating shift once the initial shock passes.
I bought a unit the day after my divorce funds landed in my bank account. I’d just been turfed from a rental and really wanted a secure place, and found myself at an auction the very next day. That security has been so invaluable to me and my kids, especially through the pandemic.
Rebuild stability, one decision at a time
Divorce is messy. It’s almost never easy and often financially draining. But with deliberate, thoughtful steps, you can rebuild stability one decision at a time. The key is to stay pragmatic, keep emotions out of money conversations as much as possible and prioritise the financial choices that will safeguard YOUR future.
The backward step of divorce doesn’t have to define the rest of your life. With a good accountant on your team and practical action, it can be the start of a stronger, more resilient financial chapter. And remember this: I’ve never met a divorcee who has said, “Gosh, I miss my ex-husband/ex-wife.”
This article contains general information only. It is not financial advice and is not intended to influence readers’ decisions about any financial products or investments. Readers’ personal circumstances have not been taken into account and they should always seek their own professional financial and taxation advice that takes into account their financial circumstances, objectives and needs.
Feature image: iStock/Igor Suka
Tell us in the comments below: What helped you stay strong through divorce or separation?
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