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Child Expense Budgeting for Decoupled Parents

by Betsy Wirth
Published by Peoria Magazine, April 2020

It’s simple—parents want to do everything they can for their children. But in a child support scenario, the way Illinois courts determine how that happens is somewhat complex. Child support in Illinois is determined by income shares. The State determines an amount per month that a household would spend based on the number of children, and each parent is assigned a percentage of the amount based on their income.

A court can also order each parent to contribute to child expenses. These are typically uncovered medical, educational and extracurricular expenses which cover things like co-pays, uninsured medical expenses (like braces), school registration and activity fees. These expenses are usually awarded as percentage amounts, and making sure there’s enough money in your budget to cover them can be difficult.

Being ordered to pay 50 percent of an unknown total can be daunting. However, there are some things parents can do to make sure they have enough funds to cover these expenses, and hopefully have a bit left over to treat their kids!

Budgeting for Expenses
The court in any child support matter will require parents to complete a financial affidavit. This is basically a monthly budget that calculates your net income and expenses, with an entire section devoted to child-related expenses. It is very important that parents take time and thought in preparing this.

Both parents, attorneys and the court need a realistic picture of what these expenses will be. Don’t guess! Look at your bank statements and health insurance documents. What do you typically spend for uninsured medical costs? Find out what school registration will cost, as additional fees for items like laptops can pop up from year to year. Think about what activities your children are involved in or planning to be involved in. Completing the financial affidavit in a thoughtful and realistic way is the first step in making a budget for your child-related expenses.

The court order for child expenses may be very detailed…. or it may be very vague. For example, the order may say that you are responsible for “50% of school expenses.” This could mean registration and fees, but arguably could include supplies, lunch money and much more. Be sure to ask for clarity from the other parent, your attorney and the court. Having this conversation before an order is entered will save you time, money and sanity later. Also, think about future expenses. Are you splitting the cellphone bill? What about car insurance? Depending on your children’s age, it may be worthwhile to address those items sooner rather than later.

Methods of Reimbursement
Once the court makes a determination on what percentage each parent will pay toward child expenses, the next step is to have a plan for how each parent will reimburse the other. For example, if Parent A takes the child to a doctor appointment and pays a $50 co-pay, how will Parent B pay their share? Typical court orders contain language that the paying parent provide the other parent with proof of a paid expense, and the other parent has a certain amount of time to reimburse their portion. This makes sense, but can be a bit inconvenient in practice. A lot of parents are not thrilled with the hassle of constantly exchanging receipts and money.

Use technology to make sure you are being reimbursed properly! Those small amounts subject to reimbursement may not seem consequential, but they add up over time. Think about the best way to make sure this happens. Some parents agree to utilize a joint checking account, and each is issued a debit card. They can fund the account with an initial or monthly amount for child expenses. Each parent then has access to view expenses and can “settle up” each month with the other parent. Others use software to record transactions on spreadsheets. Find something that works for your family, and make sure expenses are communicated and repaid.

Hedging Unpredictability
As parents, you know that children (and their associated costs) can be unpredictable. Carefully consider what you are spending, be clear about specific expenses that will be divided, and make sure to communicate and repay the expenses to the other parent. These practices will help ensure that you have enough left over in your budget to treat your kids (or yourself).