When parents divorce, the responsibility for financially supporting their kid is meant to be shared equitably. And although separation agreements aim to neatly define how kid-related costs will be shared, the truth is that even with a well-written agreement, one parent can end up spending more than the other.
In co-parenting situations, day-to-day expenses are expected to be shouldered by both parents. That’s the goal of child support. Extraordinary expenses – bigger-ticket items – are also shared proportionately, based on each parent’s income.
Sounds straightforward, except it’s not.
If one parent is always on top of making sure the kids have what they need – clothes, winter coats and shoes, for example – they will carry an unfair financial burden. Maybe that parent is also the one who signs kids up for tutoring, sports and activities – and pays the fees. The separation agreement says that each parent is to do their fair share. But if one parent pays for all of the clothing and shoes, plus a laptop and a bike, that can easily top $3,000 – and that’s just some of the costs.
Even the extraordinary expenses, which are supposed to be easy to define, can be contentious. Parents might disagree about whether some expenses are “necessary and reasonable,” which is the guideline for determining whether the cost should be incurred and shared. So one parent might want their daughter to go to overnight camp for two weeks during the summer but the other parent doesn’t see it as necessary. Or perhaps a child wants to play AAA competitive hockey, but one parent doesn’t support it.
This conflict between co-parents can cause plenty of stress, especially for the parent who is bearing the brunt of the costs. Unfortunately, the kids might also feel the impact. They might not get the new running shoes they need because each parent is hoping the other will buy them. There might be rules around leaving the sneakers at one parent’s house and not taking them to the other’s. Ultimately, kids could feel responsible or hurt by their parents’ arguments about money.
Family law and mediation help to smooth over these problems by laying out some guidelines in a separation agreement. The agreement might be quite specific about extraordinary expenses. For example, the parents will agree ahead of time to share the cost of four years of university. Although this is helpful, it’s unlikely the divorcing couples will be able to predict all of the future expenses that might come up. Including as many foreseeable expenses as possible in this agreement can reduce the debates later on.
When it comes to expenses that don’t qualify as extraordinary but are pricey, it’s good to have a process in place to manage them. In a perfect world, co-parents agree to split any expense over a certain dollar amount or any items that the kids will use at both houses – things such as laptops and bikes. These costs would be tracked and settled up periodically. This process, however, doesn’t always work smoothly and it might help to adopt other strategies.
Parents can consider designating roles. If one parent likes to take the kids shopping for clothing and the other doesn’t, see if you can agree ahead of time on what things your child needs and agree to split the cost.
Another way to simplify is to divide financial responsibilities. You can agree to each be responsible for certain types of expenses. For instance, one parent could be responsible for buying clothing and the other looks after shoes. Or if you have two kids, one parent pays for the cellphone plan, public transit pass and haircuts for one child and the other parent pays those costs for the other. You can divide the responsibilities in all kinds of ways. Sure, it won’t be perfectly equal but it might be close enough.
For one-off, lumpy expenses, discuss and agree on them ahead of time. For things that stay at one parent’s house, such as a gaming console, each parent can make their own decisions about whether to buy it or not. But for other things that the kids will use no matter which parent they are with, it would clearly be unfair for one parent to foot the bill all the time. It would also be unfair for one parent to make a unilateral decision and expect the other parent to pony up the money.
Raising children on one paycheque instead of two is hard enough and bearing a disproportionate financial load only makes it harder. In the end, the goal it to reduce annoyance, make things are fair as possible and above all, do what’s best for the kids.
Anita Bruinsma is a Toronto-based financial coach and a parent of two teenage boys. You can find her at Clarity Personal Finance.
Anita Bruinsma