Co-Parenting? How to Split Expenses With Your Ex
If you're co-parenting with your ex, you've probably noticed that coming up with a completely fair way to share child care expenses is harder than it sounds. Even if you have a perfectly amicable divorce, it can be a challenge.
Dividing Out Expenses Is Tough.After all, kids and their lives aren't very formulaic. You can have a mediator or a judge detail exactly how you're going to divide your cash outlay on your kids for everything from their clothing to college, but what if your child one day wants to take up a musical instrument? Or go on a ski trip with friends? You may think that's a fine idea, but your ex may feel it's too expensive. And if your ex is barely able to meet his financial obligations, he may have a point.
So What Do You Do?You improvise and, hopefully, compromise. "There's really no one answer," says Lori Lustberg, a certified financial planner and certified divorce financial analyst in South Burlington, Vermont. "Every case is different, every individual is different, every couple is different."
But as you search for an answer, try the following.
-- Devise a system for unexpected expenses.
-- Carefully discuss your money woes with your child.
-- Keep the lawyers out of this.
-- Always put the kids first.
1. CommunicateNo need to make this harder than it already is. Hear out the other person's point of view. One of you may win over the other, or you may be able to meet in the middle.
"Communication and participation are key," says Lori Barkus, who owns Barkuslaw Sustainable Family Solutions, a family law firm with offices in Hollywood, Florida, and Louisville, Colorado. "Parents are more likely to agree to divide expenses if the activity is discussed with them beforehand, and the parent feels like he or she is part of the process."
That means no demands. No passive-aggressive snark. Just talk.
Granted, that may be easier said than done. Some exes are unreasonable; that may be why you got a divorce. Some couples simply aren't good at communicating.
"Most of the people who I work with have great difficulty in working together post-divorce," says Paul Murray, president of PTM Wealth Management LLC, based in North Wales, Pennsylvania, who also specializes in helping couples manage their money after a divorce.
2. Devise a SystemIf you're going to try to develop a better system of paying for extra items and activities that you didn't cover in court or mediation, you may want to follow the lead of the courts.
"Generally, if a court finds that the expenses are reasonable and necessary, they will be divided in proportion to the parents' income," says Linda A. Kerns, a Philadelphia-based attorney who specializes in family law and divorce.
She elaborates: "Put simply, if mom makes $67,000 per year, and dad makes $33,000 per year, mom will pay two-thirds of the extraordinary expense, and dad will pay the remaining one-third."
But often the most reasonable approach to these scenarios is for you to pay most or all of the money if the activity is something you feel strongly your child should do. Then when your ex is eager for your child to have an expensive item or participate in a pricey activity, he or she can foot the bill.
Julie Phillippi-Whitney, who owns a public relations company in Cincinnati, says she did this with her ex-husband when they encountered unplanned expenses for their child. Other times, they just worked things out.
For instance, when their son was older, a teenager, Phillippi-Whitney's ex gave him his old Toyota. So Phillippi-Whitney and her husband paid for the new tires, brakes and car maintenance. The dollar amount probably didn't always work out equally, but at least their approach felt fair to each other.
"This system has kept everything balanced for us," she says.
It has worked out in similar fashion for Lustberg. "We are both pretty reasonable about things, and we are both pretty much on the same page that our son is the priority," she says.
But aim for general fairness, not down-to-the-last-penny fairness, suggests Kimberly King, a Virginia Beach, Virginia, mother of three and author of the children's book, "When Your Parents Divorce."
She says that if your ex owes you a small expense, like $10, sometimes "it is OK to take one for the team."
You may find that he offers to babysit on a night you hadn't expected, or he might buy you coffee on the way to your kid's baseball game, King adds.
"When you put positive and friendly energy out, it usually comes right back to you," she says. "Financial karma."
3. If You Discuss Your Money Woes With Your Kid, Do It CarefullyIs your ex a wealthy narcissist who splurges on him or herself but rarely does for your kids? Do you pay so much alimony that there's never anything left over to do anything fun with your children? Tell your best friend or your therapist -- and not your child. It might make you feel better to share how cheap and uncaring your ex is, but you're making yourself feel good, not your kids.
"The whole, 'I can't afford to take you to Busch Gardens because I have to pay mommy child support' is unacceptable," King says. "Put your kids first and you will make better choices, and maybe spend less time and money at the therapy office with your children."
But this doesn't mean you have to pretend that the divorce hasn't hurt your finances. You just want to do it in a way that doesn't pass any blame -- on your ex, or inadvertently, your child.
"In my experience, the more kids are helped to understand what is happening around them, the more capable they are in managing their own expectations about what they can have, or do, when they are with mom or dad," Murray says.
4. Keep the Lawyers Out of ThisKing says she wishes she and her ex could have avoided lawyers.
"I ended up spending $20,000 and we didn't even go to court," King says. "If there is any way you and your partner can agree to do a collaborative divorce and work things out in a fair and relatively friendly way, this will save the family thousands and thousands of dollars upfront."
She adds that all those legal expenses could be used for your children "for things like trips and theme park tickets," King says. "Imagine investing the $20,000 per person expense of a court case and using that money for the family fund budget. Wouldn't that be ideal?"
5. Always Put the Kids FirstEverybody knows that, but it can be hard to do. But it needs to be each parent's mantra.
"Their children need to come first, and it shouldn't be about nickel-and-diming each other to death at the expense of their children's happiness," says Erin Voisin, a certified financial planner and director of financial planning at EP Wealth Advisors in Torrance, California.
But the parents' needs don't need to be cast aside -- and what works for one divorced couple may not gel for you and your ex. Voisin says that you might handle things where one parent picks up an unexpected expense, and the next time there's something similar, the other parent pulls out the debit card.
"Something else I have seen work is each spouse just tracks what 'extra' they paid for throughout the year and then at year-end they true each other up and make it equitable and fair," Voisin says.
But it's helpful to have a system that works for the long haul. For instance, Whitney's "kid" is now 25, and she said that while he is essentially financially independent, he recently needed a medical procedure that wasn't covered by insurance that she, her ex and the son split three ways. In other words, you and your ex may be co-parenting and splitting expenses longer than you would expect.