I refinanced the mortgage on a Wednesday afternoon in October, sitting in a CommBank branch with a folder of payslips and a mild headache. The new loan was for less than the old one and the repayments were higher. That is the arithmetic of starting over: smaller everything, more expensive everything. It bites for about eighteen months. Then it stops biting and starts feeling normal.
Coming out of a settlement with half your assets and a single income is a financial shock that men consistently underestimate. You don't drop to half your previous standard of living. You drop further, because so many household costs were optimised for two earners sharing fixed expenses. Your insurance premium per person is higher. Your housing cost per person is higher. You're making coffee for one. The maths is uglier than you expect.
It's also fixable. Within two to three years, most men I know have rebuilt to a point where the divorce is no longer the dominant feature of their financial life. The first year is the work. Here's the order to do it in.
The first 30 days: stabilise
Before you optimise anything, get the basics out of crisis mode.
- Open a new bank account at a different institution to your ex. Move your salary deposit, direct debits, and emergency funds.
- Cancel any joint credit cards or remove your name as additional cardholder where you're not the primary debtor (talk to the bank about this carefully, joint debts don't disappear just because the relationship did).
- Audit every direct debit and subscription leaving your account. Cancel anything that's hers, anything you don't use, and anything that was a 'we' purchase.
- Update your tax file number declaration if your circumstances have changed (e.g. you've claimed the tax-free threshold against the wrong job).
- Check your Centrelink position. Family Tax Benefit, Parenting Payment, and other entitlements may now apply if you have care of children even part-time.
This is not the moment for big strategic decisions. Just stop the bleeding.
The mortgage decision
If you've kept the family home, you'll typically need to refinance to remove your ex from the loan and (possibly) draw down to fund her settlement payout. If she's kept it, the same applies in reverse.
Three things to know:
- Banks will reassess your borrowing capacity on a single income. The amount you can service alone is significantly less than what the household previously serviced. You may not qualify to refinance the existing loan at the existing balance.
- Stamp duty exemption applies to property transfers between separated spouses where the transfer is pursuant to a court order or BFA. This is one of the biggest financial benefits of formalising the settlement properly.
- CGT rollover relief similarly applies to investment property transfers under the same instruments. If you transfer informally, you trigger a CGT event.
Don't transfer property between you 'on a handshake'. Use orders. Save the stamp duty. Save the CGT.
If you can't service the mortgage solo, sell. Quickly. The longer you carry a property you can't actually afford, the deeper the hole gets. There's no honour in keeping the family home if it's strangling you.
Superannuation: the asset everyone ignores
Super is part of the property pool. It can be split via a superannuation splitting order under Part VIIIB of the Family Law Act. Most settlements involve some level of super split, particularly where one party has materially more super than the other (typically the higher-earning spouse).
A few practical points:
- Splitting super doesn't give either of you cash. It moves money from one super account to another. It stays preserved until preservation age.
- Update your binding death benefit nomination immediately. Your ex is almost certainly still the nominated beneficiary on your super. If you die before changing it, your super fund is likely to pay her, regardless of your divorce.
- Same applies to life insurance held inside super.
- Review your investment option. Default 'balanced' may not suit a single person now in their 40s or 50s rebuilding wealth. Consider whether your risk tolerance has actually changed.
A super split typically costs $1,000 to $3,000 in legal and actuarial fees on top of the rest of the settlement. Worth every cent if it equalises retirement savings.
Insurance: rebuild from scratch
Most couples have life insurance, income protection, and total-and-permanent-disability cover sized for joint financial obligations. Post-separation, these need a full rebuild.
- Life insurance: review the sum insured. If you no longer need to provide for a partner, the cover may reduce. If you have dependent children, the cover may need to increase to reflect that you're now their sole financial backstop.
- Income protection: arguably more important than ever. As a single income earner, your income IS the financial plan. Hold this cover seriously.
- TPD: review the same way as life insurance.
- Health insurance: family policies need to convert to single or single-parent policies. Check your level of cover. Don't drop hospital cover if you're approaching 31 or already paying Lifetime Health Cover loading.
- Home and contents: update for your new address and your new contents inventory.
- Car: if any vehicles changed hands, update titles and policies on the same day.
Update beneficiary nominations on every policy. Then write yourself a calendar reminder to check them annually.
The will and estate plan
Marriage revoked your previous will (or substantially altered it, depending on which state you're in). Divorce now revokes any provisions in your will in favour of your former spouse, but the timing of that revocation varies by state, and intestate complications are common. Get a new will drafted. Cost: $300 to $1,500. Skip nothing.
While you're at it:
- Enduring power of attorney (financial and personal/medical, depending on state)
- Advance care directive
- Binding death benefit nomination on super (already mentioned, mention again)
- Beneficiary review on all life policies
The cost of dying intestate as a divorced parent of minor children is genuinely catastrophic. Get the documents done in your first six months post-orders.
The new budget
A clean-slate budget done with realistic numbers.
Categories to map:
- Housing (rent or mortgage, rates, strata, maintenance reserve)
- Utilities (electricity, gas, water, internet, mobile)
- Transport (car loan, fuel, registration, insurance, public transport)
- Food and household
- Children (school fees, uniforms, activities, child support paid or received)
- Insurance premiums
- Health (gap payments, pharmacy, dental)
- Debt servicing (credit cards, personal loans, HECS)
- Savings and investment
- Discretionary (eating out, hobbies, holidays, gifts)
Run it for three months on actual spending data, not aspirational targets. Then adjust. The first version of your post-separation budget will be wrong. The third version will be approximately right.
Three first fixes
The interventions that move the needle hardest:
- Refinance the mortgage on realistic single-income capacity, or sell. Don't carry what you can't service.
- Re-establish a $5,000 to $10,000 emergency buffer in a separate savings account. This is the difference between a leaking tap being a $200 problem and being a financial crisis.
- Restart super contributions if you stopped them during the legal spend. Even an extra 2% salary sacrifice compounds materially over 15 to 25 years.
Get these three done in the first six months and you've laid the foundation for the rest.
The medium game
Once stabilised, the work shifts from defence to offence.
- Pay down high-interest debt aggressively (credit cards first, personal loans next)
- Rebuild emergency fund to 3-6 months of essential expenses
- Re-engage with longer-term wealth building (super contributions, ETF investing, possibly an investment property if your serviceability supports it)
- Keep your tax affairs immaculate; child support, deductible expenses, capital gains all need clean records
- Review your career trajectory honestly; if your earning capacity needs to grow, build the plan to grow it
The financial recovery curve is real. Year one is hard. Year two is steadily better. By year three, the divorce stops being the central financial event of your life.
What you don't do
- Don't make big financial decisions in the first three months
- Don't take on new debt to maintain a lifestyle that doesn't fit anymore
- Don't ignore super splits to feel like you 'won' more cash
- Don't transfer property informally
- Don't skip the will
Half the assets, all the discipline.
Stabilise, simplify, rebuild.
Further watching
- 01Stabilise in 30 days: new accounts, cancelled joint debts, audited direct debits.
- 02Refinance to realistic single-income capacity or sell; do not carry unaffordable property.
- 03Stamp duty exemption and CGT rollover apply only to transfers under court orders or BFA.
- 04Update super beneficiary nomination, will, and life insurance the same week.
- 05Three first fixes: refinance or sell, $5-10k emergency buffer, restart super contributions.
The 30-day financial stabilise after separation is: