Published on January 13, 2023

Divorce or separation can mean radical financial change. You may not have much experience of dealing with certain aspects of your finances and that can cause anxiety. Moving from a 2-income home to a 1-income home can be challenging,

Add the stresses of change and the emotional context of your situation to the mix and you have the perfect excuse to put things off. Although this might be a natural response, it’s not a sensible one.

If you get yourself organised and work in a methodical way, you will be able to get to grips with everything and I promise you that you will feel better once you’ve done it. Taking control and having a sense of future is worth the effort.

Cash flow

Cash flow is money in, versus money out. Without an understanding of this, you won’t be able to plan, identify problems or make sensible changes.

Money In

This could be from:

  • earned income or pension, after tax;
  • maintenance that is paid (maintenance is tax free);
  • benefits received (some are taxable, some are not);
  • interest or income from savings and investments (again, some are taxable, some are not).

Money out

Have your bank statements to hand, or access your accounts online, and make a note of everything you spend your money on, like:

  • rent or mortgage payments;
  • credit cards and loans;
  • household bills;
  • weekly shopping;
  • insurance costs;
  • car and transport costs;
  • children’s clubs and activities;
  • school costs;
  • nights out and entertainment;
  • cash withdrawals (try to think about what these are usually for).

If more is coming in than going out, then great. That means you have scope to save and to plan for other things, like holidays and bigger expenses.

If it’s the other way around, then don’t panic. With a little analysis, you can work out the shortfall and try to do something about it. Look again at your expenditure and find ways to economise.


  • Try to put your cashflow into a format that you can keep track of and update over time. You could put it into a spreadsheet or write it out. Doing this will cement the information in your mind and help you understand it. Alternatively, use one of the online tools provided by charities and other organisations.
  • Don’t be afraid to ask for help. If you can afford to pay for advice, then find a good independent financial planner. If not, then talk to trusted family and friends who may be able to help you. You could also book an appointment with Citizen’s Advice, or access some of the free online resources available.
  • Don’t ignore things on your statements that you can’t identify. You may be paying for something that you don’t need! Try to categorise your expenditure, between the essential and the things that you could do without if you had to.



You may have an existing mortgage. If so, take the time to understand it:

  • how long is it for?
  • how much do you still owe?
  • is it a repayment mortgage, or interest only?
  • if it’s interest only, how are you planning to repay it?
  • are there penalties if you change your mortgage or repay early?
  • do you have Life Insurance to cover your mortgage?

If your financial circumstances have changed, your ability to borrow money will have changed too. Mortgage lenders are far stricter than they used to be about lending. They will want a detailed assessment of your income and expenditure, to asses ‘affordability’, before making a decision.

If you receive maintenance, it can count towards income for some lenders, but usually only once it has been in payment for six months or a year and only if it is subject to a court order.

There are new mortgage products coming to the market all the time and some of them will allow your family to offer security or to borrow on your behalf.

If your mortgage deal has come to an end, you could see your payments go up, or down. It might be a good time to look at a new deal with your existing lender or move to a new one.

Credit cards, store cards, overdrafts and loans

It is frightening how easily people can access borrowing and how quickly it can get out of control. You need to know:

  • what is the balance owing?
  • what interest rate you are paying?
  • are your payments just covering the interest or paying the debt off too?
  • are you near your borrowing limit?


  • Consolidating debts can save money, or reduce monthly payments, but be careful about the overall costs and how long you will be paying things off.
  • Seek proper independent advice before making mortgage decisions, it could make the difference between getting a mortgage or not and could save you a lot of money.
  • If you are struggling to make your mortgage or debt repayments, don’t ignore it. Seek debt counselling advice and open up a dialogue with the people you owe money to.


You may be entitled to benefits now that you didn’t qualify for before. Child benefit, free childcare, Universal Credit; the list is long and the rules can be very complicated. Taking the time to find out what you are entitled to could be life-changing though, so put in the work.  


  • Access the many free online resources provided by government and charities, they will give you the best start in identifying what you might be able to claim.
  • Make an appointment with Citizen’s Advice or a charity that offers advice.

Postscript. Links to organisations and charities that can help and support with finance issues are to be found in these pages. You may also find this article useful as it covers the issues on how assets are split on divorce.

Tom Farrell contributed to ‘Separating With Children 101, 3rd edition, (Bath Publishing, 2023).

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The Early Days Of Separation

Humans are designed to cope with many onslaughts, but change continues to prove extremely challenging. How you manage the early days of separation or divorce has the potential to set the tone for the rest of the process.

When couples separate, they are often thrown into a period of uncertainty. Identities are changing from couple to single, from mum and dad together as a family unit to mum with children and dad with children. Depending on the circumstances and who decides to leave the family home, there are many questions that arise during the early days of separation. “Will we have to sell our home?” “I haven’t worked since we had children – how will we manage financially?” “What will our friends and family think?” “How much will divorce cost?”
“Will I cope on my own?” There seems to be so much to sort out both practically and emotionally and it comes at a time when at least one of you will be ‘all over the place’ emotionally due to the loss you are experiencing. This can make decision-making seem impossible. Who wants to agree the practicalities of legal issues and more importantly organise the children when they are devastated, angry and confused by loss? It can turn otherwise rational, clear-thinking mums and dads into what appears to be belligerent, stubborn, unreasonable people.

Take Your Time!

In those early days of separation or divorce, take your time if you can. Seek support from friends, family and professionals. Try not to make any big decisions too quickly.
Bear in mind that communication problems with your ex and all the pressures on family life you are now experiencing, like for many separating couples, will get better with time. It’s important to recognise that you and your ex will more than likely be in very different emotional places at the moment; different stress levels and anxieties will be making communication difficult. Taking the time to sometimes do nothing, to not react, give things a day or two, can prove very useful techniques.
What you have to remember is that if you have children, your ex is always going to be part of your life. That can be hard to take on board when you are feeling hurt and angry. If you can find a way to communicate with each other that focuses on the children, you will all benefit in the years to come.

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