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Preparing your finances for separation

Finances can be a significant source of stress – it’s not uncommon for financial issues to contribute to the breakdown of a relationship. This blog explores some steps you can take to prepare and manage your finances before and during a separation.

Separating from a partner is an emotional journey, and it’s important to acknowledge the stress that comes with it. Financial stress is often intertwined with the emotions of separation, as it can bring fears about the future and uncertainties about your financial stability.

Set aside time to consider your individual goals, understand your financial picture and potential living expenses, and decide what to do with your assets. Being clear on these aspects will help you identify financial priorities and areas for compromise.

Starting an open conversation about money can be difficult, but it’s an important aspect of separating.

Here are a few things to consider.

Open up about money

Money is often a sensitive topic, but discussing it openly during the separation process can help you understand each other’s perspectives, find compromises, and make progress.

Develop your financial literacy

If you don’t have experience actively managing finances, it’s natural to feel overwhelmed. Reach out for help and educate yourself about managing money. Money Smart is a good place to start. 

Understand your new goals and your partner’s goals 

Separation often means a shift from shared goals to individual ones. Take the time to reflect on your goals and use them as a basis for discussion with your partner.

Get a clear picture of your finances

Make a list of assets and debts held in both names. Record your income streams, expenses, and liabilities. This information will be essential for splitting finances and seeking advice or legal assistance.

Choose your priorities

Separation often leads to increased living costs for both parties. This is even more challenging when the cost of living is rising. Prioritise your expenses and focus on what matters to reduce financial pressure. The MoneySmart Budget Planner is a helpful tool.

Decide how to handle assets

Asset division can be a contentious issue during separation. Seek advice from professionals or consider using a mediator to facilitate discussions and reach amicable agreements.

Plan realistic timeframes

Asset division and the sale of assets can take time. Mapping realistic timeframes and outcomes can provide clarity and confidence during the waiting period.

Create a new financial roadmap

Fear of the unknown is a significant source of stress. Work with a knowledgeable professional to map your financial future and alleviate money-related fears. A financial advisor can help you with long-term investments and goals. MoneySmart can connect you with a free financial counsellorif you struggle to manage bills and debt.

Addressing your financial situation early on can positively impact your mental and physical health. Seek guidance from professionals specialising in separation and divorce to help you navigate this challenging period.

By preparing your finances and engaging in open communication, you can minimise conflicts and ensure a smoother transition to your new life.

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.