Going Your Separate Ways Doesn’t Need to Be as Costly If You Follow These Financial Tips

Making the decision to end a marriage is never easy. It’s an emotional, often overwhelming process that touches every aspect of your life—your home, your children, your friendships, and crucially, your finances. Yet amidst the heartache and uncertainty, there are practical steps you can take to protect yourself and lay the groundwork for a smoother transition.

The reality is that divorce in Australia can be expensive, time-consuming, and emotionally draining—particularly when disputes escalate to litigation. According to research, the average cost of a contested divorce through the court system can run into tens of thousands of dollars, with some cases exceeding $100,000 or more. The process can drag on for years, leaving both parties financially and emotionally depleted.

However, it doesn’t have to be this way. By preparing your finances in advance and embracing collaborative approaches like mediation, you can significantly reduce the cost, stress, and duration of your separation. Family Law Mediation offers couples the opportunity to resolve disputes faster, more affordably, and with far less conflict than traditional litigation—preserving relationships and protecting what matters most: your family’s wellbeing and your financial future.

Consider the experience of many Australians who find themselves blindsided by separation. Even financially savvy individuals—including those who work in the finance industry—can be caught off guard when a relationship ends abruptly. Joint bank accounts can be emptied, access to the family home can be lost, and suddenly you’re left scrambling to support yourself and your children with limited resources.

Those who fare best in these situations are typically the ones who planned ahead. Having even a modest amount of money set aside in a personal account—accumulated gradually over time—can make the difference between crisis and stability. The goal isn’t to deceive your partner or gain an unfair advantage; it’s simply to create a safety net that ensures you can meet your basic needs during the transition.

Financial advisers and family lawyers report that they are increasingly seeing more people, particularly women, seeking advice before they separate. While it’s not always possible to prepare in advance, it is definitely financially savvy to get your financial affairs in order well before you utter the words “I want a divorce.” The goal is protection, not predation—it’s about creating a safety net.

Here are five essential steps to take before initiating a divorce conversation.

1. Map Your Financial World

Knowledge is power, and nowhere is this more true than in divorce proceedings. Understanding the complete financial landscape of your relationship is the foundation upon which all other preparations are built.

There’s significant merit in understanding your household finances—everything from bank accounts to asset ownership—well before the relationship hits the rocks. But if it already has, it’s imperative to get up to speed quickly.

Start by examining any financial documents that come through digitally or via post. This includes bank statements, superannuation statements, tax returns, and any other financial records you can access. Make your own copies, photograph them, or take detailed notes so you understand the complete financial picture of the relationship and who’s managing what.

The first step before saying you want a divorce is to map your joint financial position and net worth. Identify all assets—superannuation, cash, property, investments—and all debts.

This comprehensive financial mapping should include bank accounts (both joint and individual), superannuation balances for both parties, investment portfolios, real estate holdings, vehicles, business interests, valuable personal property such as jewellery or artwork, and any debts including mortgages, credit cards, personal loans, and tax liabilities.

Under the Family Law Act 1975, both parties in a divorce are required to provide full and frank disclosure of their financial circumstances. Having this information readily available not only protects your interests but also streamlines the resolution process—whether through mediation or other means. Couples who enter mediation with a clear understanding of their financial position are far more likely to reach a fair and efficient settlement, avoiding the costly discovery processes that can characterise contested court proceedings.

Remember, in Australian family law, the asset pool typically includes all assets acquired before, during, and after the relationship by either party. Superannuation is also considered property and can be split between parties. Understanding these principles early helps you approach negotiations with realistic expectations.

2. Set Up a Separate Account

Don’t count on having access to your joint accounts. In worst-case scenarios, joint accounts can be emptied without warning, leaving you stranded at a critical moment.

Ahead of any split, it makes sense to have a bank account in your own name if you don’t have access to one already. Setting up your own bank account with at least one month’s worth of expenses covered is a good starting point.

Aim for enough cash to cover one to two months of living costs, depending on your earnings and whether your existing income can sustain yourself when living alone. This buffer provides crucial breathing room during the initial upheaval of separation.

In a worst-case scenario, disgruntled partners can empty joint bank accounts entirely. Having your own account not only provides you with a sense of financial empowerment but creates some protection if things turn ugly.

It’s important to understand that any funds held in that account will form part of the asset pool in divorce negotiations—you’re not hiding money, and attempting to do so would breach your disclosure obligations. Rather, these funds are essential to making sure you can sustain yourself following a split and can potentially help fund professional advice, including mediation services.

Having access to your own funds also means you can engage a mediator early in the process, which is often far more cost-effective than immediately instructing lawyers for adversarial proceedings. A professional mediator can help both parties work through financial and parenting arrangements in a collaborative environment, typically at a fraction of the cost of litigation.

3. Do a Credit Check

It may seem mundane compared to the emotional weight of divorce, but getting a credit check before you separate can be critical to your financial future.

Your credit score affects your ability to secure rental accommodation, obtain finance for a car or home, pay for subscriptions, and even sign up for certain services. A poor credit score can cripple your ability to rebuild your life after separation.

In Australia, you can obtain a free credit report from agencies such as Equifax, Experian, or illion. These reports detail your credit history, including any defaults, enquiries, or negative listings.

Checking your credit early gives you time to identify any issues and begin repairing your score if necessary. It also helps you avoid devastating surprises that might not even be your fault. For instance, if you’ve been a guarantor on your partner’s debts or if joint accounts have fallen into arrears without your knowledge, these matters will appear on your credit file.

If you discover errors or unexpected entries, you can dispute them with the credit reporting agency or take steps to address outstanding debts. This proactive approach ensures you’re in the strongest possible position to move forward independently.

Understanding your credit situation is also valuable information to bring into mediation, where discussions about debt allocation and future financial responsibilities will be central to reaching a fair agreement.

4. Seek Advice Early

One of the most empowering things you can do before initiating a divorce is to engage professional help. This doesn’t necessarily mean preparing for battle—in fact, the opposite is true. Early advice helps you understand your options, including the significant benefits of resolving matters through mediation rather than litigation.

Getting legal advice early and starting to visualise your post-separation future is strongly recommended. This means taking the time to consider and define your personal goals. Ask yourself: what do I want my future to look like once I’m single again?

For some, it’s about staying in the family home; for others, it’s about financial security, flexibility, or simply peace of mind. The clearer you can be on the future that you want to live and what that might mean for you financially, the more ready you will be to make decisions when separating.

It’s also worth thinking about what your potential ex-partner will want and any potential conflicts that could arise. This foresight can often help people navigate the separation process more easily.

When children are involved, things naturally become trickier. However, if you can find common ground and get on the same page early on, it significantly eases the navigation of the entire separation process.

This is precisely where mediation shines. Unlike adversarial court proceedings, mediation provides a structured, confidential environment where both parties can work together—with the guidance of a neutral, accredited mediator—to reach mutually acceptable outcomes. Mediation preserves relationships, protects children from the fallout of parental conflict, and allows couples to craft creative solutions tailored to their unique circumstances.

Under the Family Law Act 1975, separating couples with parenting disputes are generally required to attempt Family Dispute Resolution (a form of mediation) before filing an application in court, except in cases involving family violence or urgency. This legislative emphasis on mediation reflects its proven effectiveness in resolving family disputes.

Having a network of experts—including a mediator, a family lawyer for independent advice, a financial adviser, and perhaps a counsellor—and prioritising your own health are essential for the marathon ahead. The average time for a divorce can be anything from a few months to several years from break-up to asset settlement. Having the right support makes all the difference.

5. Do Your Budget

Finally, budget for your post-split self and any dependants. Understanding your financial needs as a single person or single parent is crucial to making informed decisions during separation negotiations.

It is important to know that you are going to be able to meet your regular expenses with your income once you have separated. This means calculating your essential living costs—housing, utilities, food, transport, healthcare, childcare, school fees, insurance, and debt repayments—and comparing them against your anticipated income. Be realistic and thorough; it’s better to overestimate expenses than to find yourself short.

It’s also wise to look at upskilling yourself if your income is likely to fall short. Ask yourself: is my current income enough? And if not, what kind of things can I do over the next year or two to increase that? Whether it’s going back to study, gaining new qualifications, or pursuing a better-paying job, forward planning can make a significant difference to your financial independence.

If you’ve been out of the workforce or working part-time while raising children, consider what steps you might need to take to re-enter employment or increase your earning capacity. This forward-thinking approach not only strengthens your financial position but also demonstrates to mediators and courts alike that you’re taking responsibility for your future.

A detailed budget is also invaluable in mediation. When both parties understand their genuine financial needs, negotiations become more grounded and productive. Rather than fighting over arbitrary figures, you can focus on practical solutions that meet everyone’s essential requirements.

The Path Forward: Choosing Mediation

Divorce is undoubtedly one of life’s most challenging experiences. But by taking these five steps—mapping your finances, establishing a separate account, checking your credit, seeking early advice, and preparing your budget—you place yourself in the strongest possible position to navigate what lies ahead.

More importantly, by embracing mediation as your preferred pathway to resolution, you can avoid the financial devastation, prolonged conflict, and emotional trauma that so often accompany contested court proceedings. Mediation empowers you and your former partner to take control of your own outcomes, reach agreements that work for your family, and move forward with dignity and respect.

At Mediations Australia, we specialise in helping separating couples resolve their disputes faster, better, and cheaper. Our accredited family dispute resolution practitioners provide a safe, confidential, and supportive environment where you can work through financial and parenting arrangements without the adversarial nature of litigation. We encourage you to reach out and explore how mediation can help you achieve a fair and lasting resolution.

Disclaimer: This article is for general information purposes only and is not a substitute for professional legal advice. Consult a qualified lawyer or mediator for personalised guidance.