Table of Contents
No one enters a marriage expecting it to end in divorce. But when it happens, it brings plenty of emotional and financial challenges.
While professional legal advice is essential, it’s just as important to remember that you don’t have to wait until the divorce is final to start planning your finances. In fact, the sooner you start, the better prepared you’ll be for the next chapter.
Even while the settlement is still in progress, there are steps you can take to understand your financial position and begin rebuilding for the future.
Understand Where You Stand Financially
The first step is to get a clear picture of your money situation. Start by making a simple list of everything, including:
Your income — like your salary, maintenance payments, child support, or any other money coming in.
Your expenses — things like rent or mortgage, bills, childcare, transport, groceries, and everyday spending.
Your debts — such as mortgages, loans, or credit cards.
Your savings and investments — whatever you have saved or invested, big or small.
It’s easy to overlook those smaller, regular expenses — the ones that quietly chip away at your bank balance. And when you’re managing everything on your own, they tend to feel even heavier, especially if you were used to splitting the costs with your partner. What once felt manageable can suddenly add up fast, from everyday essentials to the little extras you didn’t think twice about before.
Plan for Divorce & Tax Implications
Changes to your tax situation or other long-term financial commitments can impact your overall plan. That’s why it’s worth taking the time to do financial planning now. It can help you spot any potential issues early, avoid surprises, and keep your finances steady as you move forward.
Once you’re divorced, you’ll no longer be taxed as a couple — you’ll be taxed as a single person, which may change your tax rate or credits. It’s worth speaking to your financial advisor to understand what this means for you. For example, if you receive assets as part of your settlement and later decide to sell them, you might face capital gains tax, depending on the circumstances.
When it comes to maintenance payments and tax, the rules can feel a bit confusing, but it’s good to know the basics. If you’re paying or receiving legally enforceable maintenance under a court order, and it’s for the benefit of a child, it’s ignored for tax purposes.
However, if the payments are for your ex-spouse, they count as taxable income for them — and the person making the payments can claim a tax deduction, including for USC.
On the other hand, voluntary maintenance payments (that aren’t legally enforceable) aren’t considered for tax. The paying spouse can’t claim a deduction, and the receiving spouse doesn’t pay tax.
It’s important to let Revenue know about your change in circumstances so your tax position is updated correctly.
And don’t forget: if you’re separated or divorced and you’re caring for a child, you might be entitled to the Single Person Child Carer Credit, which could give your finances a helpful boost.
Set Up a Budget That Works for You
Your situation has changed, so your budget needs to change, too. Start with your rent or mortgage, food, utilities, and childcare, then look at the extras. This is a good time to cut out anything you no longer need, like unused subscriptions or memberships.
It’s not just monthly bills. Things like car servicing, school uniforms, or annual insurance renewals can sneak up on you. Plan for them so they don’t catch you by surprise.
The proper budget doesn’t have to be perfect — just realistic enough to give you control and peace of mind. Take a look at our free personal budget planner to get started.
Start fresh with a solid financial plan — request your quote now.
Review Your Protection and Legal Documents
After divorce, it’s essential to make sure your financial protection fits your new situation. Take a moment to:
Check your life insurance and income protection
After a divorce, it’s important to make sure your financial protection reflects your new circumstances. Take some time to review your life insurance and income protection policies. These were likely set up when you were married, and your needs may have changed since then.
Make sure the cover you have is still suitable for your situation, especially if you now have different financial responsibilities or dependents to think about. Updating your policies will help give you peace of mind that you’re properly protected moving forward.
Update your beneficiaries on life insurance policies and pension plans
Leaving your ex-spouse as a beneficiary is a mistake that happens more often than you might expect. After a divorce, updating your life insurance policies, pension plans and documents to reflect your current wishes is important. Taking the time to sort this out now will help protect you and your family — and save you from any unwanted surprises or complications down the line.
Look over your health insurance
Reviewing your health insurance after a divorce is important to see if any changes are needed. If you were on a joint policy with your ex-spouse, you’ll likely need to arrange separate cover for yourself — and don’t forget about cover for your children, too.
Review your will and any legal arrangements
After a divorce, it’s essential to review your will and any other legal arrangements. Your circumstances have changed, and your documents need to reflect that. Take the time to update your beneficiaries, guardianship plans if you have children, and any other instructions to make sure your wishes are clear. It’s a simple step that can help avoid confusion or disputes in the future and give you peace of mind knowing everything is in order.
Start Rebuilding Your Savings
If your savings took a hit during the divorce, don’t worry — that’s completely normal. Now that you’re managing things on your own, it’s more important than ever to start rebuilding, even if it’s just small steps at first.
Focus on building an emergency fund that covers around 3 to 6 months of your living expenses. It doesn’t need to happen overnight. Regular, small contributions will grow over time and give you valuable peace of mind.
Refocus on Your Goals
Your plans may have changed, and that’s okay. This is a great time to set some new goals, like:
Buying a home in your own name
Buying a home in your own name can feel like a big step, but it’s absolutely possible — and it comes with some good news. You might still qualify as a first-time buyer, even if you’ve inherited a property, previously bought a home, or have separated or divorced. Learn more by reading our First-Time Buyer’s Guide.
And remember, you don’t need a second person on the mortgage — you can buy a property as a single person and make it your own.
Saving for your children’s education
Saving for your children’s education was probably a goal you shared before the divorce or separation — and while the marriage may have ended, your role as parents continues.
It’s worth having an open conversation with your ex-spouse about how you’ll handle this going forward. Even if things have changed between you, you both likely still want the best for your children.
By working together on a plan, you can keep that goal on track and give your children the support they need for their future.
Your future deserves clarity — get expert financial guidance after divorce.
Get a Financial Planning Quote
You don’t have to figure this all out on your own. Our financial advisors can help you look at the bigger picture, make the most of any settlement, and spot opportunities to secure your future.
Financial planning helps you stay organised, especially during life’s toughest moments. At LowQuotes, we’re here to guide you through your financial journey, helping you make informed decisions to support your own and your family’s financial well-being.
We provide various financial services, such as mortgages, serious illness cover, financial planning, pensions, life insurance, health insurance, and savings & investments.
Share this post
All our content has been written or overseen by a qualified financial advisor. However, you should always seek individual financial advice for your unique circumstances.
