Starting over financially
Single income, half the assets, and a list of fixes for mortgage, super, insurance, and will in the first year post-orders.
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§ Journey
Single income, half the assets, and a list of fixes for mortgage, super, insurance, and will in the first year post-orders.
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.
Before you optimise anything, get the basics out of crisis mode.
This is not the moment for big strategic decisions. Just stop the bleeding.
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:
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.
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:
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.
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.
Update beneficiary nominations on every policy. Then write yourself a calendar reminder to check them annually.
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:
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.
A clean-slate budget done with realistic numbers.
Categories to map:
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.
The interventions that move the needle hardest:
Get these three done in the first six months and you've laid the foundation for the rest.
Once stabilised, the work shifts from defence to offence.
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.
Half the assets, all the discipline.
Stabilise, simplify, rebuild.
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