Raising children is a rewarding proposition, but it is also an expensive one. Rarely more so if the parents are no longer married or never were. Strategic coordination for paying for expenses may not be for everyone, but the benefits may outweigh deficits when it comes to the bottom line.
A couple’s financial responsibility is often spelled out in divorce decree, which outlines the financial obligations contributed by each spouse, including child support, spousal maintenance, dividing assets, and debts. However, coming up with a plan to minimize or pool expenses will likely be something that will have an element of trial and error as parents find the right approach.
Important tips to remember
It starts with clear communication, which is the foundation for many healthy, divorced families, but there are strategies to be used while communicating:
- Set expectations: Talk about financial expectations and budgets, which can avoid misunderstandings later.
- Choose your battles: It is unlikely that there will be 100% agreement, so try to remember the priorities and not get caught up in unimportant issues.
- Establish boundaries: This applies to many aspects of co-parenting, but conversations should focus on school tuition, fees for sports and child-centric expense rather than commenting on personal income or savings.
- Mediation: It is also recommended to avoid litigation if the parents file for divorce or have a dispute. Mediation can often yield workable solutions without the adding expense and stress of court.
Create a budget
Budgets can be hard to stick to, but meeting them keeps the stress levels down. Agree on what to split and how each parent pays or contributes. Typical expenses include:
- Daycare or after-school programs
- Extracurricular activities
- Childcare expenses if there is a full- or part-time person
- Healthcare expenses not covered by insurance
- Birthday parties and family events
- Gifts for holidays or birthday
- Savings account for college
- Private school tuition
- A first car
Splitting these expenses
Parents rarely make the same amount of money, so there may be a sliding scale if one co-parent has a much higher income (70-30 may work). Keeping receipts or records of expenses is also recommended. There are also apps like Venmo where co-parents can electronically transfer money instantly instead of waiting for a check or cash.
Looking for ways to save
Co-parents can look at their finances to see what makes the most sense. Maybe a grandparent provides free childcare at least a day or two a week, one co-parent has less expensive health insurance for carrying the children, or it makes sense for the higher income earner to claim the children as dependents on taxes. Not all of these will apply to each family, but saving on expenses is essential when two incomes must maintain two homes.