Financial Co-Parenting: 4 Ways to Save Your Money and Your Sanity

Raising a child apart can be costly and stressful. Here’s how to do it right.

Financial Co-parenting: calculator with coins

I don’t like the term “financial co-parenting.” It sounds too technocratic, and it isn’t really accurate. Married or divorced, parenting is parenting. You either do it right, or you don’t.

As a CPA and financial counselor for three decades, I’ve seen many divorced couples raise their children better than some married couples. I’ve also seen poorer families raise their children better than wealthier ones. One factor decided success: dispassionate communication.

In all the advice you’ll read about co-parenting, the first tip is to “communicate better.” As Psychology Today describes it, “Co-parenting involves collaboration and is a process rather than a category.”

Before I offer my own advice for co-parenting from a financial viewpoint, this basic advice still applies. Nothing I say below will help you and your ex spend your money wisely if you don’t communicate openly.

4 Financial Co-Parenting Tips to Help You Save Money

1. Draw up a budget

If you did not create a household budget when you were married, it is even more important now that you’re divorced. However, this isn’t a budget for you or your ex. It’s a budget solely for your child. You and your spouse need to consider the following line items, depending on your child’s age:

  • Healthcare (including dentist and possibly braces)
  • Activities (soccer team, music lessons, etc.)
  • Daycare, after-school care, and/or babysitting
  • Clothing (including for school and otherwise)
  • Tutoring, summer camp, or similar programs

Just the exercise of drawing up this budget will help prevent fights later on. For instance, another line item might be private school tuition. Can you each afford that? And how do you want to split these expenses? 50-50? What if one ex earns twice that of the other?

I recommend that couples create a household budget before they get married. It will not only have a practical financial impact, but it will also show how each partner thinks about money and where they should spend it. If there is any silver lining to this tragic pandemic, it’s that more Americans started budgeting than ever before. It might be too late for such a budget to save your marriage, but it’s not too late for it to benefit your child.

2. Agree on day-to-day expenses

Did you notice what I left out of the proposed budget? Food and general housing costs aren’t included. You should discuss these costs separately since you pay for those individually. What your child is allowed to eat, where your child sleeps when staying with you, and other such decisions are as much personal as they are financial.

As opposed to co-parenting, this is known as parallel parenting – a parenting arrangement in which spouses co-parent while having very limited direct contact with one another. This form of co-parenting is ideal for ex-spouses who have communication issues and wish to limit their interactions with one another. While co-parenting and parallel parenting are often described as opposite styles of raising a child, they actually work in tandem. Both parents have the option of deciding on expenses together but each spouse can also make just as many financial decisions on their own.

If you take your child to the museum or a ballgame, are you expected to pay for that yourself? Or will you essentially get reimbursed by your ex? There’s no correct answer here. While I’m partial to simplicity – it can get complicated to invoice your ex – I’ve also learned from three decades of financial counseling that whatever keeps both parents focused is well worth pursuing.

3. Check out the tech

There are apps for everything, including co-parenting. Three of the most popular ones are:

These apps vary in their user interface, but they all make it easier to financially raise your child. Depending on the app, you can automate support payments, manage shared expenses, and set up a calendar to keep track of doctor’s appointments and birthday parties.

I’d also recommend general financial apps, which can help you manage your own finances. I’m a big fan of these five debt management apps, but anything that helps you get out of debt and stay there has my stamp of approval – you’ll raise a healthier child if your own finances are healthy.

4. Tend to the weeds

No one enjoys learning the nuances of income taxes, college funds, and health insurance. I certainly don’t, and I’m a CPA. However, you and your ex will find it profitable to explore which health insurance policies are most cost-effective and if a Health Savings Account (HSA) will save you both money. It probably makes sense for one parent to claim the children as dependents, depending on their income and deductions. These are in-the-weeds tactics, but tending to those weeds can save you and your spouse a lot of money.

Conclusion: Communicate

Of course, no budget, app, or tax loophole will help you and your ex if you can’t divorce your feelings from your finances. I’ve often suggested divorced couples see a therapist – call it “post-marriage counseling” – so they can learn more about financial co-parenting and how to raise their child without the same problems that cost them their relationship.

If you can dispassionately communicate, you’re halfway there.

To get through the other half, can help you. Not only can you speak with a debt-busting professional, but you can also get help rebuilding your credit – which will go a long way to rebuilding your confidence. From there, you can rebuild your life.

Howard Dvorkin is chairman of and author of two books (Credit Hell and Power Up). He’s founded and funded businesses that help Americans get out of debt – and stay out.

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