Creative Financial Co-Parenting, Part III
We’ll wrap up with lesser-used financial co-parenting options. As stated in Part I and Part II, parents must have an agreement in place regarding which child-related expenses should be shared in order for any plan to work. The options below require a special touch in order for them to work.
Manually Track Expenses
If either parent is a spreadsheet nerd, manually tracking expenses may be an option (though spreadsheets aren’t required – I just immediately think of Excel because I’m a nerd myself). In this type of arrangement, both parents maintain tracking in a format that works for them. They retain receipts for proof of expenses, and then submit their reimbursement requests to each other on a regular basis (bi-weekly, monthly, but ideally no less frequently than quarterly), depending on the frequency and amount of expenses. Typically, this will result in one parent owing the other the delta between the two reimbursement requests. (For example, if Judy’s reimbursement request is $240, and Mike’s is $140, then Mike will pay Judy the difference, or $100.)
For detailed-oriented folks, this is a cakewalk. But if either parent is the slightest bit opposed to this plan, or has organizational problems, it likely will not work.
Horror story: I once helped a friend with her expense tracking that she and her ex had put off for years. (Neither one of them were nerds, obviously.) It was a disaster! We had to sort through a box full of receipts, put it all in a spreadsheet, and then she had to present an $8,000 expense reimbursement request to her ex. He reportedly took that request in a calm and rational manner…NOT! His expenses only tallied $4,000, and getting him to write a check for the difference took several months of back and forth attempts to disqualify her submitted expenses. Rest assured, after that nightmare, my friend and her ex quickly moved to a co-parenting app.
Each Pays Off-Setting Expenses
For some parents, the thought of regular communication with each other is an unpleasant one. They wish to avoid conversations, except only the important or urgent ones needed regarding the kids. So, to take money conversations off the table, each pays designated expenses, commonly without reimbursement.
In this arrangement, parents assess the ongoing child-related expenses to determine the amount or approximate amount of each expense. Then, the parents divvy up the expenses between each other. Here’s an example of how that might look:
Cell phone plans – $50 per month
Math tutor – $100 per month
School lunches – $120 per month
Extracurricular activities – avg. $175 per month
Pays all uninsured healthcare expenses – avg. $500 per month
If you sum each column, Mom ends up paying about $445 each month, and Dad ends up paying about $500 each month. The difference of approximately $55 each month is not reimbursed to Dad, nor is Mom reimbursed if her expenses exceed $500 per month. For couples in this situation, the +/- of approximately $50 dollars is worth every penny to not have to continually discuss child-related expenses. For expenses recurring less than monthly the parents agree each will pay half directly to the requestor (annual school fees are paid directly to the school, for example).
In order for this arrangement to work, both parents have to be cooperative, and even more importantly, be willing to NOT SWEAT THE SMALL STUFF. (If you’re divorced and holding on to a receipt for $2.84 to get your $1.42 reimbursed, this arrangement isn’t for you.) But the few clients I’ve worked with who made this type of arrangement said they felt such relief knowing they wouldn’t be nickeling and diming each other to death. They avoided the temptation to weaponize financial co-parenting!
It’s All About Cooperation
Bottom line, co-parenting is short for cooperative parenting…meaning parents should have a child-centric and ego-free approach to parenting. And this includes the responsibility of sharing child-related expenses. Here at Smarter Divorce Solutions, we work with divorcing couples on a daily basis, and enjoy assisting our clients with creating and living a vision of the best divorced family they can be. Call us today at 1-877-552-4017 to learn more about how we embrace Divorce Done Differently!