The income shock is real
Before separation, your household had a combined income covering one set of bills. Afterwards, each parent has their own income covering their own set of bills — and the total cost of running two households is significantly more than one.
On average, separated families in Australia spend 30-50% more on basic living costs than they did as a single household. Two rents or mortgages. Two electricity accounts. Two internet connections. Two fridges to fill. Two sets of contents insurance. The maths is brutal, and it hits hardest in the first 6-12 months.
But it's manageable — with a plan. Use our Two-Household Budget Calculator to model your new reality and find the gaps before they become crises.
Important: This article is general information only. For personalised financial advice, speak with a financial counsellor — many offer free services (see below).
Step 1: Know your actual income
Your post-separation income picture may include:
- Your salary or wages (net of tax)
- Child support received (or minus child support paid)
- Family Tax Benefit (FTB) Part A and Part B — check your eligibility via Services Australia
- Parenting Payment (single rate is higher than partnered rate)
- Rent Assistance — available with FTB or other qualifying payments
Many separated parents are surprised to find they're eligible for government payments they didn't qualify for as a couple. A single parent earning $65,000 with two children may qualify for several thousand dollars per year in FTB alone.
Step 2: Map out both households' expenses
The key to budgeting after separation is understanding exactly where the money goes in both homes. Even if you only control one budget, understanding the other parent's costs helps when negotiating shared expenses.
Fixed costs (same every month)
| Expense | Typical range (per household) |
|---|---|
| Rent or mortgage | $1,200-$2,800/month |
| Electricity | $120-$250/month |
| Gas | $40-$100/month |
| Internet | $70-$100/month |
| Mobile phone | $30-$80/month |
| Contents insurance | $30-$60/month |
| Car insurance | $80-$150/month |
| Car registration | $50-$80/month (annualised) |
Variable costs (fluctuate monthly)
| Expense | Typical range (per household) |
|---|---|
| Groceries | $400-$800/month |
| Fuel | $150-$350/month |
| Children's activities | $100-$400/month |
| School costs | $50-$200/month (averaged) |
| Clothing | $50-$200/month |
| Medical/dental | $50-$150/month |
Use the Shared Expenses Splitter to work out how to divide children's costs like school fees, activities, and medical expenses between households.
Step 3: Find the gap
Add up your income (Step 1) and subtract your expenses (Step 2). If there's a shortfall — and for most newly separated parents, there will be — you have three options:
- Increase income: More hours, better job, side income, government payments you're not yet claiming
- Reduce expenses: Move to cheaper housing, cut subscriptions, reduce discretionary spending
- Restructure debt: Consolidate high-interest debts, negotiate with creditors, access hardship provisions
Most people need a combination of all three.
The biggest money leaks after separation
Housing that's too expensive
The emotional pull to stay in the family home is strong. But if the mortgage on the family home consumes 40% or more of one parent's income, it's not sustainable. The rule of thumb is that housing costs should be under 30% of gross income. Be honest about whether that's achievable.
Duplicate subscriptions and plans
Go through your bank statements and cancel everything that's no longer relevant:
- Family streaming plans that now cost double (switch to individual plans or share passwords legally)
- Family phone plans — separate into individual plans
- Gym memberships for a gym you no longer live near
- Insurance policies that need updating (you may be paying for cover you don't need)
Emotional spending
Separation grief often shows up as spending. New clothes, takeaway food, online shopping, and 'treating' the kids can quietly add thousands per year. This isn't about deprivation — it's about awareness. Track every dollar for the first 3 months. Apps like Up, ING, or simple spreadsheets work fine.
Not claiming entitlements
Check your eligibility for:
- Family Tax Benefit A and B
- Parenting Payment (Single) — up to $922.10 per fortnight (2025-26 rates)
- Rent Assistance — up to $188.20 per fortnight for families
- Child Care Subsidy — reassessed based on your individual income after separation
- Energy concessions — available in most states for Health Care Card holders
Sharing children's costs fairly
Child support covers general costs, but many families also need to split specific expenses:
- School fees and levies
- Extracurricular activities (sport, music, tutoring)
- Medical and dental expenses not covered by Medicare
- School excursions and camps
The Shared Expenses Splitter helps you calculate fair contributions based on each parent's income. A common approach is to split these costs in proportion to your respective incomes — if one parent earns 60% of the combined income, they cover 60% of the shared expenses.
Building a buffer
After separation, unexpected expenses hit harder because there's no second income to fall back on. Aim to build a small emergency buffer — even $500-$1,000 gives you breathing room for a car repair or unexpected school cost.
Start small: $20-$50 per week into a separate high-interest savings account. In 6 months, you'll have $500-$1,300 — enough to absorb most surprises without reaching for credit.
Free financial help
- National Debt Helpline: 1800 007 007 — free, confidential financial counselling
- Services Australia Financial Information Service: 132 300 — free financial guidance on government payments and budgeting
- MoneySmart (ASIC): moneysmart.gov.au — budget planners, calculators, and guides
- Family Relationship Advice Line: 1800 050 321 — can connect you to financial counselling
For a comprehensive list of free services, see our guide to free separation resources in Australia.
