Relationship breakdowns can be devastating emotionally, as anyone who’s been through it knows. Then, just when you’re at your most fragile and vulnerable, you have to deal with unravelling your finances. This is where we learn that 1÷2 ≠ 0.5, even though we wish it would. Divorce generally means losing money thanks to transaction costs and the need for speed.

No wonder divorce ranks in the All Time Top Five Greatest Hits on the ‘Life’s Most Traumatic Experiences’ Charts!

It’s something I’ve seen play out first hand when my parents divorced. The financial decisions they made as they split rippled through the following decade. Indeed occasional blips are still felt 29 years later by both of them. As a financial educator, I am often asked for suggestions on dealing with the financial side of divorce. (E.g. this 45min segment for Focus on ABC Radio with Jessica Strutt).

I sat down with Mi Casa Property Boutique to answer some questions, specifically:

Q1. Asset division

“Where do you start when dividing your assets during a divorce?”

The simple answer is: wherever you like. If you’re able to reach an amicable agreement, the decision is in your and your ex-partner’s hands. You just need to agree what you think is fair and reasonable, then act accordingly. Typically you’ll make a list of the assets you own individually and jointly, and their approximate value. From there, you agree who gets what, and what needs to be sold, so you each get your ‘fair share’. Something often forgotten when lawyers aren’t involved is superannuation: make sure it’s included in your list of assets.

If you had a Binding Financial Agreement (BFA) in place prior to your split, you can simply follow that.

A Binding Financial Agreement (BFA) can remove some stress when you’re ready to start tearing up the photos

If there’s no BFA and you’re unable to reach an agreement between yourselves, it’s onto Plan B. Your alternatives include mediation and legal action to help you work out your split. In that case, opinion won’t be enough. Evidence will be taken into account to decide what’s fair. Such evidence might include:

  • what you each brought into the marriage financially,
  • contributions via work and care for the home/family,
  • ability to earn an income post split, and
  • what your share of the care will be (i.e. how much time do they spend with each of you).

Fees are usually incurred for advice and representation. Take this into account when estimating how much you’ll have when it’s all settled.

Q2. Advice and Support

“Who can you speak to in order to obtain financial support?”

Family Relationships Online has a great website listing options and links. There are many online resources that you can check out whenever you like. If you want to talk to a human, you can:

  • call a Department of Human Services Financial Information Services Officer,
  • make an appointment with a financial counsellor, or
  • get paid financial advice from a licensed operator.

If you have joint bank accounts, loans or credit cards: it’s a great idea to talk to your bank. Asking the bank to make all joint accounts ‘both to sign’ can be helpful: it means both of you have to approve any money movements or changes of terms. If you know you’ll struggle making loan repayments during the split, be proactive in letting the lender know. You’ll have a better chance of negotiating some leeway by flagging it, rather than waiting for it to become a problem.

Note: if you’re leaving an abusive relationship, Your Toolkit is a brilliant free resource to help you prepare and leave.

Q3. Starting again

“How do you start from scratch when it comes to taking control of your finances?”

I remember reading The Cost of Womanhood after learning about it at Elizabeth Davie’s ‘Super Woman Money Program’ comedy show. The story brings to life Australian statistics on the financial impact of child-rearing and divorce on women, and frankly it’s depressing. But it does highlight the importance of being savvy with money post divorce if the average woman is going to have a hope of not ending up like Mary (the female character in The Cost of Womanhood).

Regardless of gender, there can be a sense of going back to Square One financially post divorce. Hopefully you walk away with at least something to show for your time together in the form of cash or assets, but if not: don’t lose hope. Many a divorcee has gone on to achieve financial independence.

Use what you’ve learned from the experience to make active decisions in your future relationships. Too soon? Okay, maybe don’t think about that right now. But one day, you might meet someone. Will you have a BFA in future? Will you have joint accounts?

If you haven’t been financially focused in the past, use this experience as a motivator to take control of your money. Get educated about saving and investing. Put a plan in place to make the most of what money you’ve got now, and the money you’ll be earning in the future. It’s never too late.

Don’t believe me? Check out Fran’s story. It outlines one divorce and one not-divorce (the end of a nine-year relationship). Spoiler: she went on to become financially independent.

Q4. Selling a property

“From a financial point of view, what are the key things to remember when selling your home during a divorce?”

1. Rushing is the enemy when selling your property. Being forced to sell quickly, especially in a buyer’s market, can mean you risk taking a hit on your sale price. Some buyers specifically hunt for properties being sold due to divorce. These opportunists know they might get a great deal at lower than market value by offering quick settlement.

Yes, you may be tempted to just get it sold so you can get away from your ex. But: get the maths wrong and, in the worst cases, you could both be walking away with debt and no property to show for it. Not a win for anyone. Be aware that a sale can take upwards of six months to achieve. Until a sale goes through, you have to pay the mortgage, rates, insurance and the like. Plan accordingly.

2. Property carries significant transaction costs. You’ll likely be paying an agent’s fee, plus other general expenses like conveyancing. If a building or pest inspection finds a defect, you might be up for capital to correct the issue before the sale can go through. Take such costs into account when working out how much you think each person will get after the sale. This ensures you have realistic expectations.

If you can manage to smile at this point, you’re doing bloody well

Q5. Emotions v. Logic

“Is it important to separate your emotional self? Why?”

This is probably the toughest question of them all. I’m not sure it’s possible to completely separate emotions from any aspect of divorce.

What I can say is that financial decisions are best made with a clear head. There is always an emotional side to consider. More importantly, do what you reasonably can so each of you walks away with something to show for your years together. Using financial decisions to exercise control or exact revenge during the process might feel good in the moment, but the ongoing impact can be hugely negative on both sides.

If it helps, get some perspective through advice. Again, Family Relationships Online is a great place to start.



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Lacey Filipich is the co-founder and director of Money School. She helps parents raise financially savvy kids and helps adults get on top of their finances. Connect with her on LinkedIn and follow the Money School Facebook page to learn more.


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