How many of you would consider sharing a checking account with your ex after the divorce is final? I'm not just talking about the joint bank account, where only specific funds are deposited and withdrawn for spousal and child support monies. I'm talking about a truly shared account, into which the former spouses each respectively deposit their proportionate share of child support, agree upon the guidelines for what constitutes a shared child expense, and then use debit cards to spend accordingly. No one exchanges receipts. No one maintains complicated spreadsheets. No one fights over who purchased the sneakers and in whose house said sneakers may reside. Such an arrangement requires cooperation between the parties, similar parenting priorities, and most importantly, a lot of trust.
I am envisioning a lot of guffaws among the readers today! Perhaps even a few snickers? Well naysayers, I can attest that it has worked for at least one family I know well, and I'm hoping for many others out there, too. For some ... though definitely not all ... this scenario not only works, but is also simpler and easier than traditional methods typically utilized for co-parent accounting. How does it work?
Assume for the sake of this example that child support has been calculated, and is being divided 40% (Mom) and 60% (Dad.) Toss out the receipts, lose the spreadsheets, and don't waste time arguing with each other. Instead, follow these steps:
Step One: Open Joint Checking Account from which all child-related expenses will be paid, and agree to initial deposit amount, minimum balance, and funding rules.
Determine the minimum balance required for the account. In my friend's example, they agreed to a minimum balance of $1,000.00, and whenever the balance dropped below $1,000.00, she would deposit $400.00 and he would deposit $600.00. The account was initially opened with a $2,000 deposit ($800.00 from Mom and $1200.00 from Dad). Per their agreement, they re-funded the account whenever it dipped below $1,000.00. Depending on the needs of the kids, sometimes a few months would go by with neither having to add more funds. Other times they were making one or two deposits per month.
Step Two: Define the Rules for Use of the Joint Account
o The devil is in the details. To facilitate proper use of the account, both parents must each have a debit card, and must agree to the definition of a "child-related expense." Even in the most amicable divorces, it is a good practice to define the term and provide examples in a written agreement, to reduce the chance for misunderstanding. A good rule of thumb is that if an expense is for something that will be used at only one house, or is incurred specifically as a part of one parent's parenting time, then it would not be split and use of the debit card would not be appropriate. For example:
USE THE CARD FOR:
• Sporting equipment
• School supplies
• Birthday parties (unless being held separately)
• Summer camp
• Doctor Visits
• Tennis lessons
DON'T USE THE CARD FOR:
• Household items
• Painting the kids' bedrooms
o Agree to a threshold amount beyond which they will first discuss and agree to the expenditure. For example, if the threshold amount is $200.00, and Dad wants to purchase a $500.00 bike for their daughter, he must first seek agreement from Mom to do so. In the event Mom agrees to a bike, he purchases it using the card. If mom agrees to the bike but believes that $500.00 is excessive, they can agree on the amount to split (which will go on the card) and dad can pay the rest himself.
o If parenting time is not split 50/50, Mom and Dad should estimate an offset amount to account for additional household expenses such as groceries, etc. incurred by the parent with more timesharing. That amount should not be deposited into the joint account, however, because it would throw off the math.
This method is not perfect, and there will be times when Mom and Dad will have to exercise some good judgment and communication skills in determining whether an expense should be shared. For example, if one parent arranges for swimming lessons, these would typically be a shared expense, appropriately paid for from the joint account. However, if those swimming lessons were actually provided during a trip to Hawaii with only one parent, this could potentially be considered a vacation expense and might not be appropriately shared.
Are The Benefits Worth The Bother?
• This process promotes joint decision-making, and reduces the inevitable conflicts that arise when receipts and spreadsheets are exchanged.
• This process is more equitable, because actual expenses, rather than estimated ones, are being shared.
• This process promotes transparency with respect to monies spent for the child(ren) (as opposed to support being utilized for things other than the child).
• If a particular month doesn't require as much support money, neither parent has a windfall nor ends up on the short end.
• This process eliminates the need for keeping receipts, maintaining spreadsheets, and conducting reimbursements after-the-fact.
• This process sends a strong and positive message to the kids that even after divorce, Mom and Dad are still working together to raise them. According to parenting and relationship expert, Jonathan Zalesne, "It says to them that we are still a family; we just look a bit different than other families." "This," he says, "is the single best message co-parents can send to their kids."
Obviously this is not a one-size-fits-all arrangement, and won't work for everyone. Bottom line: Do you trust your ex enough to share a bank account? Why would it (or would it not) work for you? Let me hear from you!