As 40 to 50% of US marriages end in divorce, chances are many of us will face the changes that come with separating from a spouse. When there are children involved and finances to manage, the situation is far more intimidating.
If you and your ex are co-parenting with a joint custody schedule, you may already realize that agreeing on a fair way to split child expenses it harder than it seems.
Life isn’t linear, especially when it comes to children, so there’s no secret formula to budgeting for co-parents. You can let a mediator or judge decide how to divide your cash—from everything from shoes to college—but what if your child wants to play sports? Or go to an amusement park with friends? It may be no big deal to you, but your ex may not have the resources to support those activities.
If one of you can’t meet your financial obligations, you may have to suffer through some difficult conversations. Keep reading for tips on navigating these conversations, creating a budget, and saving money as a co-parent.
Tips for Managing Co-Parenting Expenses
When managing co-parenting expenses, both people must improvise and compromise. Every individual, couple, and divorce is different, so there is no single answer.
As you search for an answer as to how to split clothing, activities, and other expenses, try the following tips.
Learn How to Communicate
Many couples make communication harder than it already is. Both parties should hear out the other person’s point of view. Sure, one parent may “win,” but you also may be able to meet in the middle.
Parents are more likely to be amicable to each other and agree if the activity and expenses are discussed beforehand. It’s crucial that both parents feel a part of the decision-making process.
For successful communication, try to limit your demands and any passive-aggressive snarks. Simply talk and listen to what the other parent wants to say. Of course, this is often easier said than done.
Communication may be the reason you and your ex-partner didn’t work out—some people just aren’t good at communicating. If you’re just learning how to co-parent successfully, here are some communication guidelines:
- Talk about expectations as early in the divorce process as possible. Being open in the beginning can prevent misunderstandings later.
- Determine which expenses are essential and which aren’t. Establish boundaries around your income and personal savings.
- Be prepared to choose your battles. You will not always agree 100% on decisions. If you can’t see eye-to-eye, determine whether its genuinely worth fighting over. Be ready to move on and focus on the needs of your child.
Develop a System for Dividing Expenses
Some extra items and activities won’t be covered in court or meditation, so you may want to follow the court’s lead when deciding how to split them.
Start by looking at your divorce decree. The decree usually spells out the designated responsibilities of each co-parent. It will typically clearly break out specific cost responsibilities. You can use this as your guide to communicating about shared expenses.
Typically, if a judge finds certain expenses to be reasonable and necessary, they will be divided proportionately to the parents’ income. The parent who makes more money will pay more of the extraordinary expense.
Another way to approach these expenses is for the parent who feels most strongly about the activity should pay most or all of the money. When your ex feels your child should have an expensive item or participate in an extravagant event, they can foot the bill and vice versa.
Also, don’t sweat the small stuff. If your ex owes you a small amount, like $5, you should take one for the team. Then, you may see the other parent adapt in ways you hadn’t expected, like offering to babysit or bringing you coffee to your kid’s next football game.
The key here is to put out positive and friendly energy because you will usually get it in return.
Careful Discussing Finances With Children
If you have negative views towards the way your ex spends their money, save it for a friend or your therapist. For example, you might think your ex is a narcissist who splurges for themselves but rarely for your kids.
It might make you feel better to rant about how uncaring and selfish your ex is, but those comments make yourself feel good, not your children.
Parents should avoid involving the children in discussions about why they can’t afford certain activities or things. And they should never, ever throw the “I can’t afford to take you there because I have to pay mommy child support” card.
You don’t have to keep your kids in the dark about your financial situation due to the divorce. You must, however, talk about it in a way that doesn’t place blame on your ex—or unwittingly, to your child.
Most experts agree that the more parents try to help their children understand finances, the more capable they are in managing their expectations about what they can have—or do—when they are with one parent or the other.
Put the Kids First
You’ll hear this time and time again but always put the kids first. However, it’s not easy to do. For this reason, each parent should embrace “put the kids first” as their mantra instead of incessantly nickel-and-diming each other.
You don’t have to cast your needs aside. A situation may come up in which one parent unexpectedly picks up a significant expense, and the next time this happens, the other parent is willing to step up and cover it.
If it will work for you and your spouse, track “extra” expenses paid throughout the year, then make it equitable and fair at year-end.
Whichever way you decide to handle your co-parenting expenses, be sure its a system that works for the long haul. As co-parents, you may be splitting expenses for longer than you’d expect.
Avoid Lawyers if You Can
Whenever possible, avoid attorney fees and go the mediation route unless you can work it out fairly and amicably together.
Families can waste thousands of dollars in court and attorney fees. If there is any way you and your ex can put your egos aside and agree to a collaborative divorce, this will save you a lot of time and heartache.
Fees wasted in court could go along way in the family fund—think theme parks and beach trips. Wouldn’t that be nice?
Be Creative
One way to manage expenses is to put all costs related to your children on a credit card held in both parents’ names. You can charge clothes, sports equipment and fees, school costs, dental and eye care, and more to this card. Then, parents split the bill at the end of the month and rarely have to discuss expenses.
Similarly, some co-parents choose to put money into a joint bank account and access the funds using debit cards. When determining how much to put into the savings account, you could choose equal sums or a pro-rated amount based on income.
How to Create a Co-Parenting Budget for a Joint Custody Schedule
You can share expenses without a budget. Having a shared budget for childcare expenses can smooth out the co-parenting process.
Your budget should include all the child-related expenses you’ve agreed to share, and how much each of you contributes. You can also create a budget that consists of the costs that you each assume sole responsibility for.
Commonly shared expenses by co-parents include things such as:
- Babysitting services
- Daycare or after-school care
- Health and dental care
- Clothing
- Extracurricular activities (think sports, art classes, music lessons, etc.)
- Field trips and other school activities
- Camp fees
- Birthday parties
- Private school tuition
- Contributions for college savings-accounts
How your custody is shared, and your respective incomes will determine how you split these expenses. If you have an equal custody arrangement, a 50-50 split may be the best choice. However, a 70-30 split is popular for situations where one parent makes significantly more.
You should also include housing and food costs in your co-parenting budget. How you split these costs will also depend and vary due to the custody arrangement, parents’ income, and whether one parent provides financial support to the other.
For example, if one parent has primary custody of the children, they may be responsible for covering housing and food with child support or alimony supplementation.
Don’t forget that there are long-term expenses that come with raising children, including purchasing their first car and paying for college. If your written plan covers these expenses, you can view how costs will be divided—in black and white. Then, you can plan your budget accordingly.
Use Digital Tools to Your Advantage
If the idea of a budget on paper intimidates you, there are apps and tools available to help you manage the money side of co-parenting.
Miscommunication regarding which items each parent pays for is usually the place where co-parents will argue—inputting data into an app that both parties have access to leaves less room for that bickering.
Managing your data digitally also creates a paper trail, which ensures that each parent upholds what is in their decree while keeping lawyers in the loop.
2houses offers a simple financial management tool. For co-parents, 2houses helps you manage shared expenses while continuously displaying the balance. This transparency ensures that accounts are reconciled and healthy.
The app even includes the capability to send payment invitations to the other parent.
Let’s say you want to suggest the purchase of a new jacket and send a photo, or need advice on a future gift for one of your kids. You can use the wishlist feature to keep track of these situations easily.
It’s also simple to keep track of expenses and export reports—in CSV or PDF format—by period or expenditure category.
Tips for Saving Money
Finding savings while devising a co-parenting budget can make it even easier to get along. To lower expenses, try the following tips:
- If both parents are on good terms with one another’s family, perhaps a family member could help with babysitting. This arrangement could lessen daycare or childcare costs.
- Try to minimize driving time when structuring your custody plan to help lower transportation costs.
- Both parents should review their health insurance plans to decide whether their plan is the most cost-effective for covering children. If you have one, take advantage of your Health Savings Account (HSA).
- Talk through tax filing. It could save you more money to alternate claiming the kids each year, but it might make sense for one parent to always claim them as dependents. Find a tax professional who can find you the most significant savings.
- Again, work out issues together without turning to attorneys. Separate emotions and focus on your goal: the children.
Managing shared costs is often stressful, so using these tips can lessen the stress on the parents and kids alike.
It’s Time to Get on the Same Financial Page
Separation and adjusting to a joint custody schedule isn’t the only factor that can impact family resources. Children grow up in single-home families where a parent loses their job, a parent changes careers and goes back to school, someone gets sick, etc. These are all life changes that impact a family’s budget.
When co-parenting, talk to your kids in positive, constructive ways about budget changes. Having a can-do attitude will contribute to their healthy resilience when faced with change when they are later adults.
Commit to working together as co-parents to improve family life for you and your children. If you’re ready to try 2houses for your family budget, contact us today for a 14-day trial!