Here’s what we know about money and relationships. Money is one of the top sources of stress for individuals and one of the top sources of conflict between married couples. Divorce is one of the top 5 most stressful life events. Money is a common conflict area during and after divorce. There has been an increase in child-focused spending by parents as parenting styles have grown more hands-on and intensive. It’s no wonder that coparents can easily get tangled up in conflicts over the costs of activities or who is paying for tutoring or a cell phone….the list goes on. And yet, children’s adjustment depends, in part, upon parents’ ability to keep conflict between them low after divorce.
Given that money is a stressful topic and that parents tend to feel more stressed about money after a divorce, parents benefit from adopting structures and skills to manage their child-related shared expenses.
Here are five tips to help coparents manage shared child expenses with clarity and systems that help minimize conflicts.
- Adopt the mindset that, as parents, you are financial partners in the “business” of raising your children. A successful business needs clear systems for accounting, regular reporting, respectful communication skills, and reliable and accountable action.
- Create clear and specific agreements, preferably in writing, that clarify what is considered a shared expense, a process for reconciliation of those expenses, and how often you will reconcile.
- Decide upon the specific accounting and reconciliation process you will use.
- Build trust and goodwill as parents with impeccable reliability and follow through on your financial commitments.
- Keep your children out of the middle of the finances involved in supporting their childhood.
Clear agreements and a specific system for accounting and reconciling helps reduce conflicts. Parents need to have clear expectations about what is considered a “shared expense.” Without clarity, it can be all too easy to get into arguments. “I didn’t agree to that” or “I give you child support for that” are the retorts you risk by making assumptions or not having the important conversations about expenses. For example, some things that could be considered shared expenses not covered by child support include out of pocket medical or dental expenses, education related expenses, extra-curriculars, and/or other large purchases.
Parents should carefully read their divorce settlement agreement for any specific expenses that are already outlined as to how they will be handled, such as out of pocket medical, certain educational expenses, or specific other large purchases (college or a vehicle). If there is already an agreement in place for something, abide carefully and correctly to that agreement. Often, there are a variety of other expenses parents have for their children that are not specified in their divorce decree that are “above and beyond” the scope of basic child support. Extracurricular activities, some of which are quite costly, often fall into this category. Even if the divorce decree indicates that parents will share the expense, the decree may not be specific about how to reconcile or how often. Parents do well to create a clear system to handle these expenses. Parents need to be able to answer “what is a shared expense?” and “is it only shared if we both agreed upon the purchase in advance of purchase being made?”
Once parents have clarity on what types of expenses will be shared beyond child support, they need a system for tracking and reconciling what each parent has paid. Will shared expenses be split equally or in some proportion to each parent’s income? How often will parents “square up”? Regular communications via email with semi-regular in person “business” meetings can help parents make the decisions about such expenses. Each parent needs a process for tracking expenses (for example, saving receipts or spreadsheets). Then, parents need a system to share what they have paid, t0 review payments and expenses, and address any questions or disagreements, and then to reconcile. Often this means one parent needs to reimburse the other parent. Parents need an agreed upon method for reimbursement; how (check in the mail? direct deposit?) and how often (weekly, monthly quarterly?).
When parents have a clear system and use it routinely, there is less room for animosity about money owed that is outstanding. Financial conflicts can often seep into tensions children can feel between their parents. So, parents, keep your finances clean between each other so that is not an issue fueling conflicts. Staying financially clean and clear with your coparent is a gift you give your children. Systems and structures with clear advance agreements and reliable follow-through help parents run the expensive “business” of raising children smoothly.
