How to Split Co-Parenting Expenses?
On average, every 36 seconds a couple gets divorced. It can happen to anyone and the nightmare of managing children’s expenses can add insult to the injury. If you happened to be someone who recently got divorced and has kids, you must be wondering what is the right way to discuss children’s upkeep with your ex-spouse.
If your former spouse is paying you the child support they may think anything above the agreed-upon child support is not their problem. On the other hand, if you are paying child support and your ex-spouse is asking for more money for children’s incidental expenses you may feel that they are being unfair. Discussing children's incidental expenses can be a difficult conversation. And if either of the spouses has limited financial resources they may feel anxious about the situation too.
However, legally both the co-parents are responsible for sharing these expenses and they should not come out of the monthly child support. In most states, courts expect co-parents to share the cost of additional activities and medical co-pays. Several couples face a similar situation. While they may not have a 100% agreement on every additional expense, they find a middle ground to give their children a bright future. Below are some things you can try.
Top Tips for Managing Co-Parenting Expenses
There is no single handbook for managing co-parenting expenses because every couple has a different financial situation. Also, the laws vary state by state and across international borders. However, just by being honest and polite a lot can be discussed to easily come up with the plan.
Communicate & Understand
Communicate openly and politely with your ex-spouse. Talking about expense sharing early might set the expectations right. Try understanding your ex's situation as well. Is your ex genuinely facing financial hardship or just trying to be difficult in this matter. By having an open discussion, you can get their point of view and come up with a plan. In no event, your ex should feel that you are trying to mock them or being disrespectful.
Open communication can help both of you to compromise on the matter, as both of you will be facing this situation until your kids are adults. Both of you must improvise and compromise.
Propose an expense before spending money so that your ex has a buy-in and they can plan accordingly. Cent has an option to Propose, Approve and Reject an expense.
Pick and choose battles you would like to fight. At times you may have to pay for the entire expense to avoid some argument and improve your relationship with your co-parent. It can also give you a reason to ask them to fully pay for a different expense in the future if you cannot afford it.
Avoid Lawyers
Some couples make matters like these their ego issue. They end up spending thousands of dollars in lawyer fees and compromising outside the court. Remember that it is about your children that you co-parent. The money you will spend on lawyers has a better use, such as funding a college 529 plan for your children.
If you need a third party to help with the matter, ask a mutual friend to mediate. If legal help is required, then try a certified mediator. It can be much cheaper than the lawyer fees.
Expense Splitting Methodology
If you and your ex agree on sharing the incidental expenses, you can come up with a formula to split them. You and your ex can also agree on what type of expenses should be fully paid by you or them.
Proportional Splitting - Most of the courts will split such expenses proportionally based on each parents' income. Let's assume that you make only $30,000 per year and your ex makes $70,000 per year. Then your ex will be responsible for 70% of the expense, and you will be for the 30%. For example, a $100 guitar class for your middle child will cost your ex $70 and you $30. In some cases, you may have to agree on a 50-50 split because that is what makes your ex feel comfortable.
Unnecessary Big Expenses Such expenses shall be paid by the parent who proposes them. For example, if your ex wants to take your kids and their new partner on an expensive vacation in Europe, then they should foot the bill. You should not have any obligation to share those expenses.
Be A Team Player Occasionally, you may want to pay for the small expenses and not bother your ex about them. For example, if you take your children to a Disney movie that costs only $20, then it may be worth just taking one for the team. Your ex can reciprocate by doing something similar too.
Children Do Not Need To Know
There might be a good chance that your ex doesn't want to pay more than the court-ordered child support because they cannot afford it. Or they have become a self-centered narcissist who would rather splurge on themselves.
You may feel like venting, but your children are not the ones who should be listening. Do not say something like, "No you cannot have guitar lessons because your daddy is too cheap to pay for it". While it may make you feel good, your children may suffer from low confidence for the rest of their lives. Kids need to stay out of it. Instead, you can talk to a friend, mediator, or psychologist.
Prioritize Saving for Kids
As a single parent, it is always difficult for both parents to come up with extra cash. After all it is no longer a joint household. However, there are ways to reduce the level of difficulty.
Start A Saving Account - Both co-parents can start an individual saving account to fund occasional expenses such as piano lessons. Just contributing as little as $25 per week can go a long way. You can fund your children's 529 College Savings Plan with $25/month per child.
Use Credit Card Cashback - There are plenty of credit cards that offer cash back on daily purchases. You can use this cashback to fund the savings account and pay for children's activities. Just make sure that you don't end up paying any interest or late fees while using your credit card.
Reduce Cost - Certain credit cards and club memberships may offer lower prices for children's activities. Some may even have discounts for single parents. You can also use various coupon and reward sites to save some money.
Proof of Purchase
Keep a receipt of every expense. If your ex-spouse or a judge asks for proof, you should be able to produce them. The receipt ink can go bad over time. A digital copy similar to what Cent allows should suffice as evidence. 
Proof of Payment
Don't reimburse the co-parent in cash. You should always use a trackable payment method for reimbursement. Cent supports several reimbursable payment methods such as Cash App, Paypal, Venmo, and Zelle. It will be proof of payment, and your co-parent cannot sue you for not reimbursing.
How to Create a Co-parenting Budget for a Shared Custody
While co-parenting expenses can be shared without a budget, having one can make it easier for both parents. What is not covered by child support is the candidate for a co-parenting budget. You should create a list of categories for these expenses. For example, Cent's free co-parent expense tracking functionality has ten categories and one for miscellaneous expenses. Excluding child support, the other nine can also be budgeting categories. Below is a list of these categories.
- Activities (e.g. piano lessons, soccer club)
- Childcare (e.g. babysitting, pre-school)
- Clothing & Shoes
- Education (e.g. private school tuition, tutoring services)
- Medical (e.g. dental and medical co-pays, lab fees)
- Shopping (e.g. computer, desk, smartphone)
- Transportation (e.g. to and from activities and medical appts)
- Travel (e.g. field trips, visiting either of parents)
- Other (e.g. miscellaneous expenses)
You should create a monthly budget with an expected cost for each line item and each co-parent's share. Most likely a judge or mediator will determine who pays what percentage based on your custody share and income. If one parent is also receiving spousal support then the other parent might have to foot the entire bill, since the former may not have enough income.
Regardless a shared budget can help you determine how to move forward. If you lack budgeting skills it may be wise to speak to a divorce financial advisor to help you create one.
In the end, I would say that it is all about your kids. A little bit of compromise is going to make things work between both co-parents. Your kids are already dealing with the pain of their parent's separation. They don't need more drama. Just a workable system on how to split incidental expenses will be more than enough to make your kids happy.
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Warning: This post is neither financial, health, legal, or personal advice nor a substitute for the advice offered by a professional. These are serious matters, and the help of a professional is recommended as it can impact your future.