Talking about finances is rarely easy for most people. When those people are ex-spouses, it can be an even more difficult conversation to have.
Communication between exes usually isn’t the best and is sometimes non-existent. You two now live apart–an inconvenience when figuring out when to talk and how to start. Plus, now you must learn how to share joint expenses without the accessibility of joined incomes.
How is a co-parent supposed to manage? Follow our tips below to help you maintain your sanity and keep your ducks in a row when it comes to your personal and shared finances.
Your divorce agreement spells out your financial obligations. When you, your co-parent, and your respective legal teams make the document as specific as possible, money matters concerning things like education, health care, and extracurricular activities are more straightforward and less confusing.
If your divorce agreement has already been settled and you find that it’s not functional, you and your legal team can fix it. It’s more time-consuming than getting it right the first time, but don’t let that deter you. It’s worth the effort, and you’ve grown wiser after your divorce, so your experiences can help you fine-tune it. Also, if your co-parent is too inconsistent with following it, you can have specific agreements court-ordered to, hopefully, improve adherence.
Make a habit of communicating at least monthly about financial responsibilities and keep it child-focused. If in doubt, refer to your divorce decree. Seek the help of professional divorce coaches or mediators to help you and your co-parent come up with fair solutions if you get stumped on an issue.
Arguments between co-parents are bound to arise when communicating about what to pay for. With an expense-tracking app like Dcomply, though, you and your co-parent can neutrally input and upload financial information regarding your children, like receipts or doctor bills. Because spending and expenses are more explicit and transparent with these tools, there’s less pushback from the co-parent when it’s time to pay their fair share.
Additionally, having this information in an easily accessible app gives you indisputable documentation that keeps you and your legal representatives in the know. Plus, your financial information is more consolidated, making it easier for you to create and stick with a budget.
Using a co-parenting app to help you communicate with your co-parent about shared financial responsibilities will be a game changer. Below are extra tips to help you gain financial stability as a single parent.
Tax codes are ever-changing. Before 2018, child support was taxable to the recipient and a tax deduction for the payer, but that has changed. Now, co-parents can alternate filing as ‘head of household’ for a tax break, saving an average of $1,000-$3,000 annually. You may qualify for other government tax breaks and credits from year to year, but you don’t need to become a tax expert to reap the benefits. Instead, hire a qualified tax professional to help you save time and money.
Proper money management means you and your children might miss out on fun activities, but overspending could deprive you of necessities like food, electricity, or medicine. Get a handle on your budget sooner rather than later so that you’ll always have the essentials.
Hire a financial advisor or look into online budgeting tools (many are free) to help you create a budget and stick with it. You’ll need to know your take-home pay and monthly bills. Consider a debt consolidation and payment plan if your expenses exceed your income. Also, take advantage of government support and support groups when necessary.
Once your income exceeds your expenses, remember to pay yourself first. Contribute to savings and retirement plans before your child’s education fund. Your children will be able to apply for scholarships, loans, and grants for higher education. You, however, have no such options for living expenses.
As a single parent, it’s tempting to save money by dropping one or more insurances. This practice is too risky and comes at a high price when the inevitable happens. Retain your car, home, health, and life insurance to protect you and your loved ones.
If you can’t decrease your online time, at least be aware that you are being advertised to when you are surfing the internet or scrolling through your social media. Extra time online increases your chances of making purchases you didn’t intend to make. More internet time could make you overspend.
Financial management is vital for your and your children’s futures. An effective and uncomplicated financial management system allows you and your co-parent to share and see needs, expenses, and payments efficiently. A co-parenting application will help you remain open and transparent with your spending, which can improve your financial standing.
Discussing money can be a challenging task for many individuals, and this difficulty becomes even more pronounced when ex-spouses are involved. The breakdown of a romantic relationship often leads to poor or nonexistent communication between former partners. Trying to arrange meetings and initiate money-related discussions becomes even more arduous when the individuals live in separate places.