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5 tips for financial empowerment during separation

Deciding to separate from your partner is an incredibly difficult decision. If you are facing separation and you’re not across your financial situation, it can be even more overwhelming and scary. It doesn’t have to be.

In many relationships, one person takes a more active role in managing household finances. If this isn’t you, getting informed about your position, your entitlements and your responsibilities can take away a lot of the anxieties you might have.

This blog explores some of the ways you can empower yourself financially before you speak with a professional to take some of the guesswork and stress out of your decision making.

Tip 1 Keep emotions out of your financial decisions

Ending a marriage is an intensely emotional time. You may be feeling many things, from grief and loss to guilt, anger or jealousy, to relief, hope or even excitement. It is possible to swing from one emotion to another.

Our Network Member Kylie Harding from Morgans Financial says ‘it’s really, really important to try and separate the financial from the emotional’. Kylie recommends that you give yourself a little bit of time to pause and stop before jumping in and making emotion-based decisions.

One common emotion-based decision that separating couples often face is who will live in the family home. Network Member, Selena James from Future Family Law says “It’s really common to hear, “I’ve just got to keep the house. I don’t want the superannuation.”

Sometimes keeping that family home is not going to be the best financial decision for a couple’s future. Selena says it’s important to make sure that couples aren’t caught up in the emotional side of things and that they get the right advice.

If you can keep emotions out of dealing with your finances, you have the opportunity to set up your post-separation finances in a way that’s going to work best for you.

Tip 2 Do a financial stocktake so you know where you stand

Kylie says it is really important that you have a clear view of your financial position. ‘Pay attention. Try to get 100% across what is happening.’

Make a list of all your assets, including

  • your home and any investment properties
  • furniture and belongings
  • cars and other vehicles
  • money in bank accounts
  • shares and other investments
  • cryptocurrencies
  • superannuation
  • inheritances.

Make a list of all joint debt, including

  • mortgages
  • personal loans
  • business loans
  • car loans
  • credit card debt.

List any family or business trusts in one or both of your names.

You can also use our pool of assets calculator.

Compile this information in a central point and, if you can, have your partner agree to the information.

Having a clear idea of where you stand will help when you engage mediators and/or lawyers in the future, and will help to make any advice a financial advisor gives you targeted to your situation.

Tip 3 Write all your questions about your financial future

Don’t leave important details to chance. Write down everything you need to know so you address your questions with your partner and have clarity about your situation.

You may need answers to some of the following questions.

  • Who will cover the household payments, such as the mortgage or rent, and utility payments?
  • How will you pay for a second dwelling?
  • How will your joint savings be divided?
  • How will you deal with tax?
  • What changes will you make to your insurance?
  • If you have children, how will the financial cost of their upkeep be split?
  • Will child support be necessary? Which person will be obliged to pay the other?

If communication around the separation has broken down with your partner, make sure you still write down all your questions so you can raise them through your Mediator or Family Lawyer.

Tip 4 Educate yourself to get the most out of professional advice

Jack Whelan, Mediator and co-founder of The Separation Guide says ‘the more educated and more informed people are, the less vulnerable they are.’

Before you get professional advice, arm yourself with as much information about your situation as possible. Educate yourself about financial responsibilities and entitlements. This will help empower you to make the best decisions for your future. Try to get across the rules so you have expectations in line with the law. Be careful that you don’t make assumptions about what you may be entitled to.

You will get the most value from a Mediator, Family Lawyer or financial advisor if you’ve done the work before you speak. Then they can spend the time giving you advice specific to your situation.

Tip 5 Try to put tasks into smaller, bitesize chunks

All of these tips may seem overwhelming, but not everything needs to be dealt with immediately. Prioritise the important tasks and just focus on the next step.

“It’s all about compartmentalising and putting things into bite-size pieces,” says Selena.

When you have a clearer picture of where you stand and know the questions you need to get answered, get professional advice by engaging a financial advisor. They can help guide you on the big financial decisions.

If you haven’t done so already, complete The Separation Guide Q&A to help guide you through the maze of information. The Q&A asks you questions to help us find out about your situation. We can send you resources to read and listen to that are relevant to your needs and broken down into digestible chunks. And when you’re ready, we can put you in touch with the right professionals.

To find out more about financial empowerment, listen to our podcast episode, Financial Empowerment, before, during and after separation.

Note that Kylie Harding was known by her married name Kylie Macdonald when our podcast was recorded.

The Separation Guide aims to make separation and divorce simpler, more manageable and less stressful. To find out more about how one of our Network Members could support your separation, take our free 3-minute Q&A.

The information in our resources is general only. Consider getting in touch with a professional adviser if you need support with your legal, financial or wellbeing needs.