Written by Tom Farrell

Tom is an experienced Family Mediator and Independent Financial Planner. He runs a specialist practice, exclusively working with  people who are going through separation or divorce.

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.

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.

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.


Money Advice Service

A huge resource for all aspects of managing your finances. Register on their site and you can save your work as you go. Excellent budget planner and good signposting to all manner of advice.

Citizens Advice

An excellent website with lots of information and good advice.

You can make an appointment for face to face advice and telephone them too.


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