How to Talk to Your Kids about Finances After Divorce

Reworking finances can easily become a high-stressor before a divorce, throughout the process of a divorce, and even more so after a divorce. Transitioning from a home that operates off of two incomes into being a household of one income changes the dynamics of so many things.

This is even more true when you have older children. Not only do you have to worry about finding insurance as a newly-single individual, but you also have to worry about when to add your child to your car insurance.

As you work through the various financial stresses associated with a divorce, your children are experiencing the same stresses from finances, too. Due to this fact, openly talking about finances with your children is a necessity and remains as positive as possible. Home is where the heart is and downsizing can create a cozier home.

What age is it appropriate to begin discussing finances with your child?

There is no specific age requirement for discussing finances with your child. It truly depends on the maturity level of your child, but these conversations can be easier with an increased maturity level of your child. Alternatively, having these kinds of conversations can help minimize the emotional effects of divorce on children.

The best way for parents to talk about their finances with their children is by being completely honest with them at a level they can comprehend. Parents worry so much about protecting their children, especially during the process of a divorce, that they forget children absorb information like a sponge. 

Believe it or not, most kids can handle the basics of what would usually be considered an "adult" conversation.

Though children can comprehend the most basic of situations, they are still developing emotionally. So their emotions may very well be stimulated after finding out their parents are receiving a divorce. Remember, though, that after you tell your children about your finances, it is crucial to stress the fact that it is not their responsibility to fix anything. 

Letting your child in on the situation surrounding finances and giving them age-appropriate tasks to "help" you out, can reduce any stress they may feel during this time. Age-appropriate tasks can even help distract them from the other emotional stressors associated with their parents getting a divorce.  

How do you and your spouse influence the behavior of your child?

How you and your spouse work together as a team greatly influence your child's attitude and behavior throughout the entire process of a divorce. It is important to remember that children model themselves after their parents. 

So if you and your spouse have fought and not gotten along about finances throughout the divorce, or even before the divorce, your children may try to argue with you about finances or merely respond negatively about it all.  

All of this is why it is important to find a way to effectively communicate and create agreements with your spouse. You cannot create a sense of assurance and security for your children if you are not sure of everything yourself. 

So before you start talking about finances with your children, get on the same page with your ex-spouse and make sure you are both completely okay with those terms.

If your ex-spouse is unwilling to work with you and come to agreeable terms about finances, create your own plan. Prepare to handle the majority of the finances on your own until a judge gives a final statement on how everything will play out. 

You can express all of this to your children through a way they will understand and will not hinder them emotionally. If both parties want to get along but are struggling to do so, there are various tips available for successful co-parenting. 

Make Sure You are Adjusting Your Finances 

If one thing that the 2020 COVID-19 pandemic has revealed is that everyone needs some form of savings to fall back on in case the worst happens. This is why people should always make an effort to put twenty percent of their monthly income into savings. This should always be a rule of thumb despite uncertainty, especially if your income is the only source flowing in.

Following steps to create financial independence can also eliminate the fall-out stress that your children may experience. Children are intuitive, so if you are stressing about money, they will pick up on it. Saving money can eliminate the chances of your children stressing over money.

To reconfigure finances better as a newly single individual, consider using the 50/30/20 model of financial management. This model means one will use 50 percent of funds for necessities, 30 percent for spending money, and 20 percent for savings. 

Using this rule can also eliminate stress within the household if you communicate this financial management plan with your children. Explaining to them why you have a certain amount of money for entertainment or toys can help diminish instances where they feel you are being unfair. This also promotes and nurtures an open line of communication between child and parent.

Of course, everyone is not able to balance their money like this, but they can adjust this ratio to their personal needs and adapt it to their lifestyle. It is crucial to know that saving money is not a momentary goal. It should be a lifestyle. 

One day money may stop flowing in, and if you have nothing saved up, you would have a hard time getting by. 

Clearly Note Financial Responsibilities in the Divorce Decree

From personal experience, I believe women should keep separate bank accounts but have a joint account for household finances. Aside from that, women should only contribute to the same percentage that men are. For instance, 50% of your income may be lower than 50% of his income. 

While living with my boyfriend, I did not follow the above guidelines, so it was harder for me financially when we stopped living together. For married individuals, they may be able to receive financial assistance after a divorce if that is specifically notated in the divorce decree. 

This financial assistance can extend from paying for rent to only paying a portion of what is needed to take care of the children. 

Once everything is thoroughly notated in the divorce decree, parents can explain what finances will be like and which parent will cover what. This can help to diminish any instances of confusion or frustration among children when figuring out which parent they should communicate with about certain things they need. 

Imani Francies writes and researches for the auto insurance comparison site, AutoInsurance.org. She earned a Bachelor of Arts in Film and Media and specializes in various forms of media marketing.