Managing the family budget after divorce

A new budget

An important step to adapting your family to a changing situation is creating a budget that suits your new circumstances. For some of you, this will mean operating as a single-income household. For others, it'll mean sharing the costs with your ex-partner. Either way, it’s sure to be a change from how it was.

Sitting down with a financial expert to draw up a budget is a great opportunity to review your spending habits. Figure out the pillars in your children’s life that you don’t want to change - for example, the neighbourhood you live in, or the school they attend - and focus on managing other costs.

Living with less won’t have to always mean saying ‘no’. It can just mean saying, ‘not that one’ or ‘not right now’. Creating a detailed budget is going to make you feel in control of your life as a single parent, and aware of your new financial boundaries.

Changing schools may not be an ideal scenario for your children - in fact, school can offer structure and support during this time of transition for them. But with school fees on the rise, what happens if you can't afford it alone?

You can speak with a financial advisor about how you might be able to find the funds to pay for fees. This could mean cashing in investments, or borrowing against your assets or your mortgage. If these aren’t options for you, speak with the school about financial hardship options. They might be able to assist with an instalment program or postponed fees.

You'll have to review your earning capacity to see if you'll be able to keep your children at their current school. Remember, there are other costs to consider when it comes to their schooling as well, like uniforms, excursions, camp, and more. You don’t want to sign up for years of fees if it’s going to cause you significant financial strain.

Home and mortgage

A familiar home is a strong constant in any child's life. So it's important to make this transition as easy as possible for your kids.

If you've decided to stay in the family home after your divorce, you may be looking to repay your mortgage alone. Make sure the property settlement is in writing, and talk to your mortgage provider about the new arrangement. You may need to refinance, and potentially reduce your payments. A financial advisor could help you forecast the new costs and work them into your new budget.

If you've decided to sell the family home, then it’s time to consider the costs of moving into a new house or apartment. When you sell as a result of downsizing, it may be an opportunity to reinvest any extra cash you get from the sale. Think about how you can make your cash work to create a safety net for your future. Get a financial advisor to help guide you about these things.

Retraining and job hunting

Adjusting to a single-income lifestyle after a divorce or separation can be challenging at first. Whether you were the sole breadwinner or a stay-at-home parent in your previous relationship, your role is likely to change. If you're finding that your child support payments or current job aren't providing enough income to properly care for your family, you may need to consider retraining and looking for a new job.

You can search for jobs, employment services and programs near you through JobSearch, opens in new window, or websites like Seek, opens in new window. Your local careers advisory centre can help with retraining or setting new career goals, and there are resources online that can help you prepare an effective resume, opens in new window. The Australian Government also has useful information about some of the grants and training opportunities, opens in new window available to you.

If you're happy with your current role, but need to earn more, meet with your boss to discuss internal training or promotion opportunities. You never know what chances might be there for the taking.

Support services

Divorce or separation can be one of the most stressful situations a person can experience. If you’re a parent, the stress of protecting your children as well as yourself might feel overwhelming. Luckily, a number of services are available to help.

Depression, anxiety, and other mental health issues are common following a divorce or separation. Knowing the warning signs and where to get help can make a big difference, and using an app like Headspace, opens in new window or Smiling Mind, opens in new window can really help your mental health.

The National Debt Helpline, opens in new window is a free financial counseling service to help people tackle their debt problems, and the Department of Human Services has great advice for separated parents., opens in new window

For more information, see our full list of support contacts to get the help you need during divorce or separation.