A breakup is a traumatic experience for all parties involved. From emotional upheaval to the disentanglement of property and finances, the split takes a significant toll on the couples involved. If you have children, however, managing the aftermath of your break up becomes a much more complicated prospect especially where your finances and children intersect.
Below are a collection of key factors that parents should consider, ensuring the financial health and wellbeing of their children in the long term.
Taking care of the basics
Ideally, a two-parent family works as a cohesive unit to manage household finances. Both parents coordinate to make sure that their children’s needs are met. A split complicates matters. The concept of essential costs becomes vague once communication breaks down.
Once the breakup occurs, it becomes both parents’ responsibility to ensure that their children’s basic needs are met. As well if the parents share significant time with the child, those basic needs may occur in each home. Those needs include:
- Medical expenses
In many scenarios, the bulk of a parent’s child support payment will go to satisfying these basic needs.
Obtaining quality healthcare
While the basic necessities are important, children generate a host of other financial needs that parents need to be aware of. One key decision is who will carry the children’s health insurance.
Each parent bears a responsibility to review their employer’s health plan (if applicable) and communicate with one another regarding the best course of action. From there, the parents can decide who should logically shoulder the burden, keeping in mind that the cost will be taken into account in the calculation of child support.
Dealing with changing financial needs
When a breakup occurs, it can be tempting to view all financial matters as static in nature. You and your former partner may need to work together to divide money, property and responsibility in an equitable way. The truth, however, is that very few financial considerations remain static throughout a person’s lifetime. As your children grow, so will their needs. They may wish to participate in costly sports, lessons or extracurricular activities. The cost of driver education or car insurance for a teen driver may have been far from anyone’s mind if the split occurred when the child was young but may become a reality before the child becomes financially self-supporting. To adequately take care of their financial needs —both present and future— you must approach the division of financial responsibility in a dynamic way.
Establishing an emergency fund
Life is unpredictable. You may have the essentials covered and your eye on the future, but what happens if an unplanned emergency arises? When splitting your financial obligations, consider building an emergency plan into the process.
Saving for the future
You want the best life possible for your children. Seeing your children prosper and flourish is something every parent hopes for. Although it might be the last thing on your mind in the midst of a contentious break up, you may also want to consider your child’s college fund on top of their immediate necessities.
A breakup is never an easy prospect. It requires both parties to sort through their finances, emotions and obligations. Children are the most important of those obligations. A solid understanding of their financial needs in the wake of your impending split can help you remain clear-sighted and focused on a positive outcome for all involved.