Single parent family: what to expect after a separation

25 July 2022 by National Bank
A kid feeding his mother while she’s cooking.

Have you recently become a single parent family? Rest assured that a smooth transition from two incomes to one is entirely within your reach. Proper planning, sound money management, and careful budgeting can help reduce the stress of a break-up. We have some tips to help you make sense of your finances.

So you’re a newly single parent. Now what?

Where do you start in this new life as a one-income household? With your finances. For many couples, especially those with children, a split means split responsibilities. Usually, one of the two people is more responsible and in control when it comes to money matters. If that’s you, you’re off to a good start. Your money-management skills will come in handy. If it’s not you, now is the time to take charge and learn how to manage your money.

Let’s break it down into a few simple steps:

  1. List your assets
  2. Draw up a new budget
  3. Think about the future
  4. Deal with other admin matters

1- Make a list of your assets

Draw up a detailed list of everything you own personally (assets) and your debts (liabilities). Then you’ll have a good overview of your net worth, which will help you later on. This step is essential because, among other things, it’s a way to calculate how much you can borrow and how much you need to save to reach your goals.

We suggest making the list after the family assets have been divided, so you can accurately assess the value of the assets that are yours.

In most cases, you will keep anything that belonged to you before the marriage/union. For everything else, you need to follow the rules in your province for the division of property acquired during the union, including:

  • The family’s residences (house, cottage, vacation apartment abroad, travel trailer, etc.)
  • The furniture and items inside these residences
  • The family’s vehicles
  • Retirement savings (employer plans, government plans, RRSPs, LIRAs, RRIFs)
  • Joint debts used to buy, maintain, or preserve property that is part of the family’s assets

If the rules for the division of property acquired during the marriage apply to your situation, you’ll need to assess the value of each of these things and divide it equally between you and your partner.

2- Draw up your new single-parent budget

Now it’s time to create a new budget, usually with the same line items but less income. Most couples find a way to share expenses, even though it might not be perfect or completely fair. Your situation has changed, so now you have to reconsider all your expenses. Some of these expenses will have changed, along with your income. You might also discover new sources of income to help balance your single-parent budget.

Reconsider all your expenses

Everyday expenses: Start with the essentials and estimate your main expenses such as food, phone and internet, and transportation, as well as discretionary spending like clothes, entertainment, and personal care.

When parents separate, you should try to agree on how to share child-related expenses fairly, including the cost of activities and recreation, school supplies, clothes, and so on.

Insurance: If you have joint coverage through group insurance as a couple, it’s time for a new strategy. Your needs are different as a single person, and especially as a single parent. No one likes to think about the worst that could happen, but you should consider coverage for you and your children in case of death or disability.

If your partner was your life-insurance beneficiary, i.e., the person who would receive the payout when you die, you might want to contact your insurer to change that.

If your home and insurance policies are in both your names, you’ll need to make changes to those as well.

There are experts who can help you find the right insurance coverage for your new needs.

Housing: If the split involves a move, you can estimate certain costs even before you know where you’re going to live. Once you know how much your everyday expenses are, you can estimate how much of your income you can spend on housing. And don’t forget to send out your change of address.

If you’re going to continue living where you are now, you already know your housing costs, including your mortgage or rent, insurance, and utilities. You’ll need to decide if you can meet those costs with just one income.

If you and your ex-partner own your home jointly and you want to keep it, you’ll have to come to an agreement on how to buy the other party out. To purchase their share, you’ll need liquid assets as well as the ability to borrow the necessary funds. If neither of you are in a position to hold on to the property, it will have to be sold.

Good to know: After the breakdown of a marriage or common-law partnership, you might be eligible for the federal government Home Buyers’ Plan (HBP), even if you’re not a first-time buyer. You must have lived separately from your ex-partner for at least 90 consecutive days.

Seek out financial support for single parents  

Your new situation as a single person or a single parent could entitle you to additional income or financial support such as tax credits, government programs, and bigger benefits. As some of these programs are based on family income, and as you’ve just lost one of your two main sources of that income, you may benefit from an even greater social safety net.

The Canada child benefit and Canada workers benefit are the main support programs offered by the federal government. The government also maintains an online list of support programs for families and children by province.

To qualify, you’ll need to declare your income according to your new marital status or notify the local, provincial, and federal authorities directly of your new personal situation.

Check whether you’re entitled to child support

Even if they’ve separated, all parents have an obligation to support their children. The idea is that children who no longer live with both parents at the same time should enjoy the same standard of living as before.

An ex-spouse may also qualify for financial support (alimony) from their former partner if such an arrangement is provided for under provincial law or if you agreed to it in  writing a cohabitation agreement before the split. Note that alimony is taxable, and as such, you must declare it as income.

3- Think about your future


If your plans for retirement were based on shared goals, and you were counting on the savings of two people to meet those goals, it’s time to recalibrate. From now on, plan your retirement  based on your new financial situation and on what you want to do once you’re retired.

If you had named your partner as the beneficiary of your group retirement fund, you also should think about changing that.

Your estate

Your will sets out how you want your assets to be allocated when you die. What you wanted as a couple may no longer align with your intentions after the separation. That’s why it’s so important to update your will to make sure your wishes are carried out.

If you don’t have a will, now is the perfect time to draw one up and take ownership of your estate planning. If you have children and you die without a will, your estate will be liquidated as provided for by law, which may be counter to your wishes.

If you had a power of attorney, it might have included provisions relating to your ex-partner. That too is something you need to update as soon as possible.

Deal with other admin matters

You’ve dealt with insurance, the mortgage and other housing costs, your will, and child support. The next step is to deal with everything else—like your telephone and internet service, utility accounts, and other regular bills. Change the passwords on any entertainment and social media platforms you used jointly and any passwords you might have shared.

Agree on how to manage your bank cards and any joint accounts. Unless you decide to keep a joint credit card to pay for child-related expenses, make an appointment at your financial institution or go to the website to close your joint account and cancel the card.

Adjusting to single life is a process that requires effort, especially if you have just become a single parent. Before, you shared your financial responsibilities. Now it’s time to learn to manage on your own as you gain confidence and become more at ease with your new situation. Don’t hesitate to ask for help when you need it. Our experts are there to provide support and guidance. We’re here to answer your questions.

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