Single Parent and Children of Divorce: Financial Preparations

Posted:  March 22nd, 2012 by:  Divorce Coach comments:  0

In our previous article on single parenting in Arizona after an online divorce, we gave these five tips:

Falling dollars1. Connect with other parents in parenting.

2. Take routine care of your own health, fitness, and well-being.

3. Stay on top of the other parent’s child support obligation.

4. Seek to excel and become indispensable to your employer.

5. Take advantage of every child-related tax deduction.

Today, we’ll continue our discussion around the financial cost of single parenting, no matter how far you are from Phoenix, Arizona, and Maricopa County.

6. Create a reasonable budget and stick with it.

The budget you had before the divorce is not the budget you need after the divorce is final. Yes, the other parent will be contributing child support and you may have been awarded spousal maintenance, but you still need to focus on preparing a reasonable budget that keeps your household on solid ground. If you were never the one who handled the family finances, then you need to acquire some basic budgeting skills. (There are plenty of free online resources, including Nolo’s Law for All website.) Make sure that you start a rainy day fund right away as a cushion against the unexpected expense. Even small household repairs (a broken furnace, a leaky roof, a dripping faucet) can be costly; avoid adding to your credit card debt if at all possible.

7. Educate your children about the value of money.

Children are quick to notice when their friends have new things, trendy clothes, expensive toys and games, and other expensive items. But money doesn’t just fall from the sky! They may understand that money is necessary to buy goods and services, but you need to teach your child about the value of money, where it comes from, and what is involved in running a household. When you’re a single parent, explain to your children about the financial realities of your income in an age appropriate way, of course. Doing so may help your child understand that he is not being denied things to punish him or because he is somehow undeserving. Explaining what a budget is and why you are tied to it will go a long way toward easing tension between you and your child the next time you must nix some nonessential item, like the hot Xbox game featured online.

8. Make sure you have adequate insurance coverage.  

As a single parent, you need to make sure that if you are injured or become ill and cannot work, that you have some kind of benefit plan to keep money coming into your household. It is a question of risk. Before the divorce, you had your spouse to help carry the risk if something happened to you, and vice versa. But as a single parent, the onus is on you to provide continuing financial support and maintenance for your children. Even if the other parent’s child support obligation were to be increased following your disability, it is unlikely to be sufficient to replace lost income if you become disabled or have a serious illness that interferes with your employability. (Be mindful that the other parent should have disability insurance as well, because his or her long-term illness or disability will negatively impact the ability to pay child support.) You should have a long-term disability insurance policy that will provide a benefit if you suffer from injury or illness lasting three months or longer.

9. Get your estate plan in order.

Not only should you have a disability insurance policy, you should have a life insurance policy that provides a benefit to your minor children in the event of your premature demise. In addition to life insurance, an estate plan should include a Last Will and Testament that reflects your single parent status. Most estate plans also include durable powers of attorney and health care directives.

10. Set goals and create a plan that helps you achieve them.

Once the divorce is final, you’ll have a new lifestyle ahead of you. Single parenting will be a big part of that lifestyle for a very long time, so plan accordingly. If you haven’t yet taken the time to think through what you want for yourself and for your children, then do so now. Put pen to paper – write your personal objectives down, review them periodically, make adjustments as appropriate, and make sure that you have every opportunity for the purposeful life you really desire.

We know that raising children as a single parent after a divorce can be financially challenging. Embrace the challenge and enjoy the blessings and rewards that come with having your children with you.

In our last article in this three part series, we’ll get back to the cold hard facts – more statistics on the financial cost of raising children.

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