In child welfare, there is something called concurrent planning. It’s part of the Foster Care Independence Act, and it mandates that workers plan for both reunification and adoption of a child in foster care. In other words, the worker is mandated, by law, to make arrangements for the child to go back home to his parents or to have the child permanently removed from the home. It’s a kind of CYA method of planning but it’s still important because children’s lives are at stake.
When you’re in the midst of a separation, like I am, it is imperative that you have concurrent planning for your finances–as a single person and as a married person. You need to know where your money will go in each circumstance and it is important to CYA for a few reasons:
- You need to know if you can support yourself and any dependents
- If you can’t support yourself without your spouse’s income, it gives you the opportunity to figure out how to generate more income or cut expenses
- You need to decide if it’s a good time to make large joint purchases (it’s not but each person must decide that for him/herself)
- It’s essential to prepare for future expenses such as college/private school, retirement, vacations–anything that will cost a good deal of money–so you know roughly how much you’ll personally be responsible for
- You can adjust your savings and debt payoff goals as necessary
Should my husband and I remain married (we are in intensive counseling. I figure there’s no harm in it, especially if the only thing that comes out of it is learning effective communication skills for our daughter’s sake), I know exactly how my finances will look. I know exactly how much money I will contribute to household expenses, child expenses, retirement, debt repayment, and, if I’m lucky, I’ll be able to cut my hours back at work to pursue my crazy dream of writing full-time. I’ll still have health insurance that, until next July at least, is free (then it goes up to $25/month. I know. I’m very fortunate). I know how much money I’ll have for other expenses like my pets, clothes, groceries, gas, etc because our budget will stay exactly how it is now. My household financial situation will not change because my marital status will stay the same. Knowing that I’m financially secure and stable is comforting. The plan? Maintain status quo.
However, I also need to plan for supporting myself. Although I’m getting a very small raise on January 1, should I get divorced, my taxes will change. My health insurance will no longer be free (it’s a benefit only for married couples who are both state workers). My dental and vision insurance contributions will change to just me and my daughter. All of these will affect my take home pay. I’ve made sure to run some rough estimates so I can formulate a budget based on that number. I now know roughly how much I’ll be able to pay for the major expenses–housing, transportation, utilities–and how much I’ll be able to afford for the other necessities as well as savings and retirement. The husband and I have discussed how we’ll split the profit on the sale of the house as well as who would assume which car payment. We haven’t yet discussed schooling and child care but we know we need to. Having these numbers has allowed me the comfort of knowing what I can and can’t afford, as well as knowing where I need to make adjustments. I have not taken into account any child support or part-time income. I want to know what I can afford on my full-time salary only. The plan? Do it by myself.
I do believe that when you’re in a situation like I am, it’s good to practice your financial independence. Try living on just your own income (even if this means you split bills, a la a roommate agreement. But not like Sheldon’s. A normal person roommate agreement). A monkey wrench gets thrown into the plans if you’re in my situation–still married financially. In every sense of the word. As it stands now, my husband and I still manage our finances together (well, as together as we can. Day to day finances are my job). Both of our names are still on all joint purchases (mortgage, cars) and our paychecks are deposited into our joint account each payday. We still have a joint debt payoff plan (since we incurred the debt together). We still discuss major purchases and are planning on how we can afford to send our daughter to private school should she not win the charter school lottery (our public schools are horrible. Seriously–we live in the documented worst district in the state). We still have a joint budget. It’s hard to exert financial independence when you’re tethered to someone else.
But that doesn’t mean you shouldn’t try. We operate on a his, hers, and ours banking system so there are certain things I’m trying to afford on my own (like my vacation in the spring). If you don’t have your own bank account, open one. Get your own credit card. Make a list of all your joint expenses and research what it takes to get your name off of some of them. Create a loose budget based on your current and potential income. (For some great single parent money tips, check out So Over Debt’s Single Mom Budget Series. It’s chock full o’ information)
It’s scary to think about supporting yourself. Believe me, I know. I’ve been sharing finances with the same person for over 11 years. I never thought I’d have to consider this aspect of my life. But knowing where I stand financially is important. It not only lets me know where I’m succeeding and where I’m deficient, but it makes me think critically about my future goals and plans financially and professionally.
I’m not sure what’s going to happen with my marriage but I know that I’ll be able to take care of myself and my child regardless of which path I choose. Concurrent planning made that possible.
If you’ve been in a similar situation, did you use concurrent planning? If you found yourself in a similar situation, is this something you would do?
Money Beagle says
Well, the closest I’ve come on that front is my wife working but planning on leaving work. We agreed long before we even got married that when we had kids we wanted her to stay at home, so we planned for it in advance even though she was working. Once we found out we were expecting, we started separating her income from our household budget, which made it a seamless transition once she did actually leave her job.
Maybe not quite the same, but about the best I could come up with 🙂
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Jana says
While it’s not quite the same, I think you raise an important point. If you know wthat you’re going to have a SAHP, it’s essential to practice living on one income so that when it really does happen, you know how to handle it without any crazy financial surprises.
Maggie@SquarePennies says
This is very important and affects many people. For those who know they are going to get divorced, get any joint credit cards closed and open some in your own name. Otherwise you will be liable for whatever he charges on the joint cards while you are still legally married. Go to a divorce lawyer as soon as possible once you know you will divorce to make sure you are protected. Get any joint bank accounts closed out or your spouse might clean them out. Just sayin’. Be careful.
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Jana says
Great advice, Maggie. Thanks!
Andrea says
I’ve done this in a previous relationship. It’s hard but I think it’s the smart way to handle your life and finances and get out in one piece. With everything I consider, can I handle this on my own? and if the situation would arise I would do the same thing again.
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Jana says
I agree, Andrea. I think what happens is that we become so jaded that planning for the worst just becomes second nature. I just hope you never have to do it again!
Lindy Mint says
I can only imagine how hard it would be to keep a straight head amidst the emotional strain that goes along with this. These are great tips, especially the part about practicing doing it on your own.
(PS: you’re my hero)
Jana says
Thanks, Lindy! And I’m your hero? That’s a lot of pressure. Do I at least get a cape?
Carrie - Careful Cents says
It’s such a bummer that you are having to face this financial (and emotional) situation, but sometimes life happens and we just have to do our best to handle it. I think you are going about this in a very logical and smart way. Handling everything separate is a good idea, in case you have to actually do it in the real world later on.
The Sheldon’s roommate comment made me laugh, his rules and roommate agreement is CRAZY but very funny.
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Jana says
I love Sheldon’s roommate agreement. I want to write one myself. I think with all my idiosyncracies, I might make him look normal!