During Divorce: Providing for Your Children
Often the primary caregiver is the person the children come to when they need more money. At the same time, this person is usually the one who came out of the divorce with less money. Primary caregivers need to be careful that helping your children doesn’t take money from their retirement. Laura Kuntz CPA/PFS, MBT, talks about ways to send children to the provider parents for their financial needs while retaining a close emotional bond with them.
One of the things that we often find with our clients who are coming to us out of divorce—and very often, we're serving the woman coming out of divorce—very often, she's been a primary caregiver to her children. And her ex-husband has been, more so, the provider. Though everyone's different and there are many different situations.
We often find is that our client, the primary caregiver, who also happens to come out of the divorce with less money than the provider came out of the divorce with, our client is the one that the children come to when they want more money. Especially when they're in college, or in those first two or three years after college, when they're being launched.
Because the children are spending more time with our client, because they're more in communication with our client, our client is learning about the car repairs they need, or about the debt they've incurred. Or about the idea that they want to go on vacation someplace with their friends. And that information is not necessarily going to the provider parent.
Yet, our client has the lower means to provide this. So, what does a person do about this? And what's the cost of moving in this direction?
First, let's talk about the cost. If a person has two children, and pays $10,000 a year for six years ... four years of college and two years after college, to help a child launch. A total of $60,000 times two kids. $120,000. If that money were invested versus spent, that money could double over 10 or 12 years, to $240,000.
Think of having $240,000 more for retirement down the line. That could be one, two, even three years of retirement. It's a really big deal. One saying I’ve heard was, "We can take out loans for college, but we can't take out loans for retirement."
Of course, our children would love to have us have a good retirement. And we would probably love to have a good retirement, and not be dependent on our children.
What can we do about this situation that the children are coming back more to us for these financial needs? Well, one of the things that I like to encourage is where possible, encourage the children to go back to that provider parent. Children are pretty intuitive. They tend to know who came out of the divorce with more money. If they're encouraged to go back to that provider parent, that parent can do something that perhaps they're good at. That is: provide. It can also strengthen those ties.
I think about a client; she came out of a very, very hurtful divorce. At least, I thought it was very hurtful. Her ex moved out of town, the children's father moved out of town, remarried. Yet, she encouraged that relationship wherever she could with her children's father. He was a good provider, and ultimately he paid for all of college and most of those launching expenses.
I heard just recently that they were at a family event; everyone was there, and it went very well. I really respect how she handled some of that.
I think another thing to think about is what ways can we strengthen our relationship with our children that doesn't necessarily cost money? Walking together, running together, joint interests. Free face time calls. There's so many ways I think we can strengthen our relationships with our children, that either don't cost money or cost very little. I hope that this is helpful to you.