Maintaining an Equitable Financial Partnership While Raising Children

Oct 10, 2022 | Clauses, Finances, Minnesota Prenups, partnerships, Prenuptial Agreements, Relationships

From the beginning relationship stages, we begin to set the groundwork. We analyze the in-between, visualizing a future together– what will it look like? Do we work well together?

After moving in together, relationships take a more serious turn. Together, you’ll need to navigate the rough waters of finances, rent costs, making time for each other, and all the little things. It’s manageable but takes solid communication to find a fair meeting ground where both sides have their needs met. 

Along comes baby! Now what? Add in the extra expenses of daycare, another little human to feed, and time management spins– but you got this!

If you’re finding the money conversation difficult to manage after the little one’s arrived, HelloPrenup’s got you covered.

3 Quick Takeaways

For financial discussions, here are three ways to manage the convo:

  • Lead with honesty and transparency.
  • Consider separate accounts if this is a recurring argument.
  • Meet in the middle with separate savings and a mutual joint account. 

Now let’s dive into the nitty and gritty of financial partnerships and parenting!

Balancing Parenting and Finances While Together/Married

When partners have a child together, it’s necessary for the mother to take some well-needed time off. While some jobs pay for maternity leave, others may pay little, or not at allThe lack of a second income can weigh heavily on the sole provider, so it’s best to have this conversation early to mitigate hurt feelings and stressors. Did you discuss this in your prenup?

#1. Set a comfortable budget.

Before the baby is born, find an average monthly spend that feels safe for both of you. Talking about these concerns ahead of time (or even after the child is born) makes couples feel prepared for future spending and financial turbulence. Since you both know what to expect, you’ll be less stressed about upcoming expenses.

Ask questions like:

  • What amount is fair to spend before we should ask for each other’s permission first?
  • What are some unneeded expenses that we could cut back on to feel better about our financial situation?
  • How will we split the bills?

#2. Track expenses.

Download a monthly expenses tracker on your phone, or review your transaction statement weekly/monthly. Little things might cost $5 here and there, but it does add up over time. Once you understand your and your partner’s spending habits, everything becomes clearer.

Do you have Netflix downloaded for $15 a month, but haven’t watched it in ages? Cancel the subscription. 

Ordering takeout every Thursday? Cook at home, and save the takeout for 1-2 times a month. 

All spending is completely up to you. What works for you might not work for others, being honest and upfront about what feels right to you and your partner is vital

#3. What’s mine is ours?

9 times out of 10, the mother will need to spend time off, paid or unpaid with the newborn. During this time, there may be only one source of income. How will you divide incoming finances?

  • Share everything.

Compile all your finances in a joint account; both savings and checking. You’ll see every single incoming and outgoing balance so accounting will be a breeze. 

Although this is a simple and straightforward approach to tracking spending, not all couples are comfortable with this method. What’s been spoken about in your prenup is the best way to move forward with accounts and financial management. 

  • Joint savings, separate checking.

Having a shared account for parenting money, and separate accounts for personal checking is a great way to meet in the middle. It does make financing tracking a bit challenging, so make sure you sit down together from time to time to divide spending. 

  • Separate everything. 

One of the biggest prenup pros is the 100% transparency on set expectations regarding personal and shared finances. Whatever you spend, note this. Whatever your partner spends, annotate this. 

At the end of the week or month, ensure that the bills were shared equally, or however you’ve decided. 

  • Partner allowances. 

In instances where the mother has unpaid maternity leave, consider a monthly partner allowance. This covers the costs of daily child care and allows your partner to have some free reign of leftover money to take care of their needs. 

Have a discussion on what this looks like, how long it will last, and what is a proper monthly allowance. Remember that you’re not splurging on expensive daycare fees since the mother will be at home.

Balancing Co-parenting Finances While Separated

Fingers crossed that you and your partner have maintained a healthy parenting relationship. If not, reference your prenup or get a legal team involved to set up a monthly allowance for child support. 

Chances are you’re working full-time if you’re separated, sharing costs with your ex-partner. Here are some costs to consider when determining monthly support:

  • Daycare fees
  • School fees: after-school supervision, transport, or private school costs
  • Hobbies and skills: music, sports, tutoring
  • Healthcare and insurance
  • Basic needs: food, clothing, medicine
  • Extracurricular medical expenses: glasses, dentistry, etc.

If you’re able to discuss amongst yourselves how to divide these expenses equitably– you can save thousands on pricey legal fees. However, no matter how close you and your ex-partner’s relationship is, get the details in writing and signed for future use. 

How to divide costs when one partner earns more?

Just because you share custody 50/50, does not mean you need to split costs down the middle. If one partner makes a considerably higher wage than the other, consider splitting the childcare costs differently; such as 70/30.

Do we factor in future expenses?

Yes, yes, and yes. But get it in writing. 

The best way to avoid arguments is to plan for the future. Is your child going to public or private school? Should you prepare a college savings account? Predicting upcoming costs mitigates financial instability and shock value when the time comes. Both parties can budget and save for these expenses accordingly. 

5 Ways to Save as a Co-parent or Couple

These wallet-saving tips and tricks alleviate a little bit of financial pressure– tell us how they work for you!

  • Outsource your daycare. 

Can a grandparent or friend watch your child when you’re at work? Does your job allow you to work remotely? Never be afraid to ask for help and resources when you need it!

  • Strategize your insurance policy. 

Between you and your partner, which healthcare coverage is comprehensive and affordable? If one of you has a costly insurance premium, cover your child’s healthcare fees under your partner. 

  • File your taxes. 

Do a deep dive into incomes to see which parent should claim the child as a dependent. Some couples alternate claim years; others do not. Who’s tax filing status offers the most savings? 

  • Record expenses in an app.

Even if you and your partner are no longer together, you can still track child-based spending in a shared application. There are apps that offer invoicing, receipt proof, and cash flow tracking. Find what works best for you, and collaborate in the app!

The money-saving hack all couples forget.

It’s not too late to write up a prenup, outlining expectations and financial management. Over 44% of couples claim that a prenup is a MUST before tying the knot. Consider it your future planning bestie that has you and your partner covered!

Save time, mitigate disagreements, and plan for your future mutual finances with HelloPrenup!

You are writing your life story. Get on the same page with a prenup. For love that lasts a lifetime, preparation is key. Safeguard your shared tomorrows, starting today.
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