Nobody starts out a marriage with the thought that someday it might end. But unfortunately, as we move through life many marriages do fall apart and we are faced with separation, a financial settlement of property and then divorce.

When a client calls me contemplating separation, I am often asked about the costs of divorce. Most people are really thinking about the legal costs at this point, and there is no simple answer to this question. If they can keep it amicable and agree on the division of assets with not too much disagreement they will probably face legal bills of about $5,000 each, maybe less if they do most of it themselves, and maybe more if there is too much negotiation involving lawyers. There are however a whole lot of other costs that need to be thought through when contemplating separation. Most of these can be worked out by spending some time thinking about what your cost of living is while married because the unfortunate fact is that many of your living expenses will remain almost the same once your separated and are forced to run two households, not one.

Below is a summary of just some of the living expenses that I am thinking about.

  1. The costs of running the utilities and insurances in your home. This is phone, electricity, water, gas and rates or strata fees if you own. These costs are typically about $1,000 per quarter and will now be required in two households.
  2. If you were a one-car family in the past, you might now require another car. These costs will vary greatly depending on whether the car is leased or owned outright but are typically no less than about $5000 a year, plus the upfront cost of buying a car outright or the ongoing cost of paying out a loan or lease.
  3. Furnishing a new home. The furniture in one house will not be enough to furnish two. Much of this can be found on Gumtree or Facebook marketplace, but will still likely require a spend of $1000 – $2000 to get yourself set up.
  4. Bond for a rental property. This will be equivalent to approximately 1 months rent. Rent will depend largely on where you are living and how big your family is, but this bond will also probably be more than $2000.
  5. The biggest expense of separating becomes the ongoing cost associated with renting a new home or paying off a mortgage. While you find your feet you are probably best to rent, so have a good think about what rent you can afford to pay for a new place. If you are to buy you can expect to be repaid about $2,500 a month on a $500,000 mortgage.

The list of expenses above could increase your family living costs by at least $30,000 per year with legal fees and move costs of potentially $15,000 or more. Where this money will come from must be planned for. This means the most important thing you can do before you separate is a detailed family budget. This will not only help you work through what child or spousal support might look like, it will also help you work through how much rent you can afford to pay while you get back on your feet and what you both do to increase the cash flow coming into your household.


Cathryn is a Financial Advisor and Partner at Minchin Moore Private Wealth Advisers in Sydney. She has grown her practise by helping women manage their finances through and in the aftermath of separation and divorce. In 2019 she was named by Financial Standard as one of Australia’s top 50, most influential advisers and has previously sat on ASICs Financial Advisers Consultative Committee.