Money– for most of us, it’s our least favorite thing to talk about. When you’re raising kids as participating co-parents, discussing finances can sometimes feel like pulling teeth.
While the concept of child support eventually becomes a normal part of life for families that are raising children post-divorce, certain times of the year always feel like a heightened challenge. Christmas, birthdays and back-to-school season can really weigh on parents who are trying to decide how to fairly and effectively finance an enriching life for their kids.
You know what? It doesn’t have to feel that way.
From open communication to implementing a co-parenting app, shared expenses don’t have to be a messy, uncomfortable thing to manage during the school year. Read on to learn how to effectively handle this component of co-parenting your school-aged child.
Average Cost of Back-To-School Expenses
The average family spends $272-360 per child during the back-to-school season. One in five families will spend more than that, expecting to contribute over $400 in expenses per child in order to prepare them with the proper supplies and clothes.
The COVID-19 pandemic resulted in additional costs for some families. In order to prepare for online school, some families spent thousands of dollars in order to equip their kids with the right technology.
Education-Related Expenses
Education expenses are any expenses required for your child to be enrolled in or participate in school. These expenses may include but are not limited to:
- Uniforms
- Tuition and fees
- Transportation costs to and from school
- School supplies
- Books
- Room and board
- Tutoring
- Computers and technology
Families are spending more and more on these items every year, especially as their children get older. It’s important that separated or divorced parents discuss what items are necessary for school, and what are unnecessary expenses.
Extracurricular Expenses
If they’re anything like the statistics, your kids are likely excited to get back into their extracurricular activity of choice. According to the U.S. Census Bureau, 42% of school-aged children were involved in sports. 30% of children were involved in some kind of private lessons (like music), and 28 percent were involved in clubs.
Of these kids, 9% participated in all three types of activities. That makes for a busy (and potentially expensive) school year!
Activity costs may include:
- Yearbooks, photos, admission to events
- Sports physicals
- Prom, homecoming, or other dance expenses
- Registration fees
- Sports equipment and uniforms
- Transportation costs to and from activities
- Driver’s education costs
- Private music, sport or drama lessons
- Student activity fees
- Instruments
Just as you and your former spouse come to a transportation and custody agreement, it’s important to acknowledge the expenses that come with your children’s favorite pastimes. While wildly beneficial for their health, development, and happiness, 46% of parents report spending more than $1,000 on their kids’ activities every year. If you’re co-parenting, it’s time to talk about how that’s going to be split between households.
Picking a School
After a divorce, a child may need to change schools to satisfy their new living situation or their parent’s expectations for their education. If you’re like 10% of families in the United States, you may consider private school over public school for your family. This will obviously come at a cost.
On average, K-12 schools will cost a family $25,000-$65,000 a year. Will this be sustainable once your incomes are no longer combined?
When determining what school you will ultimately finance, ask yourself these questions:
- Is private school a necessity, or a luxury?
- What is in the best interest of your child?
- What is each parent able to pay?
- Can you make this decision without a mediator?
If the child is already enrolled in a private school, it may be best to keep them in an environment they are familiar with. At the end of the day, you know what’s best for your child. Have an honest conversation as parents– it may make for an easy decision.
Post-Secondary Education
Is your child nearing the age of 18? Parental support may extend beyond childhood. 25 states give courts the authority to order a non-custodial parent to pay some level of college expenses. This kind of child support is called “post-minority” or “post-secondary” support.
Have you already established a college fund? What sort of support will you provide to assist with moving or living expenses? Set aside some time and have a sit-down discussion about what kind of future you are expecting once your child reaches his or her college years.
Spending Philosophies
How did it feel to discuss money in your marriage? Were expenses split, or determined by income ratios? While determining a fair child support arrangement, courts will consider the following:
- The gross incomes of both parents (includes salary/hourly wages, any commissions, rental income, tips, or bonuses)
- The typical payroll deductions and available tax deductions for both parents
- The custody agreement
- Each parent’s expected childcare costs
If you’re still working out the specifics, start with considering two very general expense-sharing philosophies.
50:50 Spending
Do you feel that it is most fair to split costs 50/50? This is most common for separating parents who earn similar incomes.
If you can work out a monthly payment agreement, or reimburse one another by 50% immediately, you may be able to avoid any conflict involving delayed payments or anything in direct violation of the child support agreement.
Income Ratios
If there is a substantial difference in income, it may be the fairest to agree upon an income-based system. A 70/30 or 60/40 split might be the most reasonable arrangement if you expect to maintain a quality living environment while paying off all other bills and debts.
Did you experience a high-asset divorce? It may be time to discuss the reality of child support costs and what you can reasonably afford. A divorce is an expensive time for both parties– it’s best to stay compassionate and realistic in what you both expect to earn and contribute.
Dividing by Line Item
Would you rather just take turns paying for items and activities? If the two of you have been doing this for a while and know what kind of costs should be anticipated, it might be convenient to split expenses based on specific costs.
Perhaps one parent covers all extracurricular expenses while another pays for a great first day of school outfit. If one parent is more invested in a sport or activity more than the other, they may feel driven to contribute more than their required share. Talk it out!
How to Determine Shared Expenses
Are you looking for some quick methods to implement into your shared expenses? Consider some of these tricks to eliminate friction.
Tracking Spending
Tracking spending is a core organizational tactic that many households–separated or not– use to keep their finances in line. By keeping receipts and documenting every single charge, you can ensure that both parties are abiding by the agreed-upon child support directive. This can be done both online (spreadsheets or shared docs are convenient) as well as by collecting and keeping all receipts.
Expense tracking can also be a great communication or “check-in” tool. Keeping the other parent “in the loop” about what expenses have come up and how they were paid for will help to keep things cordial. No need for surprises or awkward parking lot payouts if you agree to a regular finance meeting.
Review Trends
If you’re successfully tracking every expense, it’s easy to look back on last year’s expenses. Once you can anticipate what the expected costs are, it’s much easier to come to an exact agreement that doesn’t leave room for frustrating surprises. Managing expectations is one of the best things you can do for this new kind of relationship.
Reviewing trends is also a great learning experience for you both. By looking over what money was spent unnecessarily or in excess, the two of you can update what might be expected, or budget a little differently. That’s more money in both of your pockets!
Put Agreements in Writing
If you are still working out an arrangement, the court may require you to track all expenses to ensure that they qualify for reimbursement or cost-sharing.
If expenses are something your lawyers are keeping track of, it’s best to record them in accordance with your child support agreement, and make any required payments by the date they are expected.
Even if your arrangement isn’t required by the court, you may want to consider having your agreement added to the court order in order to hold everyone accountable. If this is done, remember that this agreement may need to be amended as the child gets older, and as their expenses start to evolve.
Co-Parenting App
Are you always on the go? Are you a tech junkie? Do you prefer having everything in one place so it’s easier to track and share?
If so, a co-parenting app might be the key to a successful school year.
A financial management system helps you and your co-parent keep track of child-related expenses in one singular place. Name and categorize each expense so it’s clear what each charge is for. Take pictures of receipts for quick uploads and reimbursements on the go.
A co-parenting app like 2Houses bridges the communication gap between households by releasing a wish list feature to keep your co-parent in the loop of upcoming expenses. You can also send a parent a request to reimburse you for their determined portion of any expenses. No more texting back and forth about money, or using your child as the middleman.
Once it’s time for tax season, exporting all data into a CSV or PDF will make things easier for you or your accountant. You will never again have to ask for financial documentation from a co-parent in order to complete or file your taxes or see if you qualify for a tax credit.
Potential Challenges
The confusing aspect of child support is the lack of guidance or prescribed spending provided by the court. As child support intends to provide for a child’s basic needs, it usually only accounts for:
- Housing
- Food
- Clothing
This becomes even more apparent when households are trying to determine where their child will attend school. If parents cannot agree on the type of education their child will receive, it is up to the court to decide.
The courts will consider the following conditions:
- The parents’ respective educational backgrounds
- The age and grade of the child
- The current enrollment environment of the child and how long they have attended that particular school
- How a private school education compares to the quality of education at the public school the child would otherwise attend
- The financial resources of the parents
These questions certainly don’t have to be answered in court. Bringing these considerations to the table on your own can help you two communicate clearly, and effectively. Communicating with respect, patience, and grace will help you and your former spouse solve the labyrinth that is co-parenting.
Keep Track of Shared Expenses With One Great Tool
The most important part of keeping a handle on co-parenting expenditures and shared expenses is staying organized. While we can’t promise a completely stress-free school year (read: runny noses, lost textbooks, late mornings), an organized approach that involves splitting costs, methods of payment, deciding what costs are necessary together will keep two co-parents on the same team.
Is your team looking for the right tool to keep your two houses in order? Start your 14-day trial of 2Houses and discover how the right financial management system can ensure your separate accounts operate in sync.