The lives of divorced dads are more taxing than fathers who are still married. It’s emotionally, physically and financially taxing to be a divorced dad, especially those who are currently married but are still supporting kids from their ex-wife. If the divorce was less than amicable, not only would you be dealing with financial problems but also a possible emotional drain.
One particular instance when divorced dads would feel both the emotional and financial strain is when they feel guilty that they are not spending as much time as they should with the kids – so they make up for it in pretty much buying the children everything they want. This can put a serious strain on the budget.
The good news is that just because you are a divorced dad does not mean it is impossible for you to straighten out your finances. Here, we will be counting down the top 15 ways for divorced dads to save money while supporting themselves and their kids.
Divorced Dad Statistics
Before counting down the ways dads can saving money while supporting their kids, let us first take a quick look at some statistics. Exactly how common are divorced dads in the US?
- The Census Fatherhood Statistics indicate that out of the more than 70 million dads in the US, 45% are divorced, 31% are unmarried, 20% are separated and 5% are widowed.
- 10% of dads are raising 3 or more kids who are younger than 18.
When it comes to the involvement of fathers in their child’s education, it shows that kids learn more, do better and exhibit healthier behavior when their dads are involved – whether they’re divorced or not. For kids of those who are divorced, just the mere fact that the dad tries to stay involved in the lives of their kids despite the separation would have a positive impact on their lives.
What do these all mean? If you’re a divorced dad who is financially supporting one or two families, the quite complex domestic situation that you have will take its toll on your finances. Fortunately, there are many ways for you to save money while staying actively involved in the lives of your kids – something which we will learn more about in the following section.
Top 10 Ways for Divorced Dads to Save Money
If you’re a divorced dad, the number one thing that you need to remember is that it is extremely important for you to stay involved in the life of your child despite the separation. Playing an active role in how your child is being raised, or even making sure that you are attending the important events in their lives would leave a lasting, positive impact on their growth and development.
Now, what are the ways that divorced dads can save money while supporting themselves and the kids? Take a look at the following list:
1. Know what your real financial situation is after the divorce
Exactly where are you in the ‘divorced’ dad status? Has the process already been settled, so you know how much you should give the kids and your wife in child support and alimony? Or are you still in the process of filing the divorce?
If it’s the latter, you may want to wait until everything has been settled first before sitting down to assess your real financial situation. If the divorce has been finalized, you would know exactly where you stand financially as a divorced dad.
After determining what your post-divorce income is, proceed to the next step: making adjustments on your personal budget.
2. Based on the new figures, establish an adjusted personal budget
After a divorce, you would have to rely solely on your own income instead of combining two salaries in the household. Let’s say that you already have an idea about what your real financial situation is after the divorce. How are you supposed to establish an adjusted personal budget? Here are a few quick tips:
- Cover the big life necessities first: rent or mortgage, utility bills, car ownership and food.
- Write down the amount that you would have to spend on two of the major expenses for divorced dads: alimony and child support. This amount depends on individual circumstances and what the judge ruled for your divorce, so make sure to allot funds for it.
- If there are enough funds left, pay off your credit card bills, home equity loans, student loans, payday loans, etc.
3. Find ways to extend your post-divorce income
When you were still married, there are actually two incomes coming into the household so your finances would be in direr straits now as compared to then.
If you have figured out that your post-divorce income is not enough for child support, alimony and all your other personal expenses, what can you do to augment your income? You might think about getting into a business, switching to a higher-paying job, taking on a second job or doing other money-making ventures on the side.
On the other hand, if your post-divorce income just barely covers all your expenses, you may not necessarily have to switch jobs. However, you do need to make certain adjustments with your current lifestyle and budget if you don’t want to live on a paycheck-to-paycheck basis.
4. Spend more time instead of money with the kids
As mentioned earlier, one way that guilty dads make up for the time that they lose spending with the kids is through money. They usually spoil the kids and buy them what they want – but this habit will take its toll on your finances.
Instead of spending more money on the kids, make way in your busy schedule to spend more quality time with them. When it’s your turn to have the kids, you don’t always have to eat out, go to the mall or do expensive activities with them. There are more budget-friendly options that you can go for.
For instance, you can rent a DVD and make your own popcorn at home, or do the same thing for sporting events. Turn preparing meals into a bonding ritual.
If there are free kid-friendly activities in your neighborhood like storytelling at a library or free entrance to museums, take advantage of them. You can even put together some sandwiches and drinks – then take the kids out on a hike or a picnic so you can all be one with nature.
Most kids want your company and attention – not just the gifts that you can give them, so spend time instead of money.
5. Set aside funds for your retirement
One of the biggest mistakes made by most adults – not just divorced dads – is only thinking about their retirement until it’s too late. When it comes to saving up for your future, the rule of thumb to follow is – the earlier, the better.
No matter how tight your budget already is, you should always make room in your budget for retirement contributions. This can be a 401(k) retirement plan or an Individual Retirement Account.
If you don’t already have one but you are employed, ask your employer what your options are to save money for retirement.
6. When filing taxes, update your marital status
When was your divorce concluded? If it was final by the end of December, the Internal Revenue Service will consider you unmarried all year. Be careful when going for a single taxpayer status, however, because you would have to pay more. You are eligible to pay taxes as head of household if you paid more than 50% of the upkeep of your previous home for the past year.
Also, your kids should have spent more than six months at your own home, and your ex-wife should have lived elsewhere for more than half the year. If you have any questions about how you can legally reduce your taxes as a divorced dad, check with a tax preparer.
7. Make sure that you are getting child-rearing deductions
A tax preparer can also help you negotiate for child-rearing deductions. You won’t have to pay any more than you have to on taxes especially if you are a divorced dad, so consult a professional or visit the website of the Internal Revenue Service so you would know exactly what the rules are.
8. See to it that your alimony follows the rules
Another aspect of being a divorced dad is paying for alimony. To make sure that your alimony follows the rules, check out the different publications from the IRS related to the matter including:
- Child and Dependent Care Services (Publication 503)
- Divorced or Separated Individuals (Publication 504)
- Selling Your Home (Publication 523)
- Tax Information for Older Americans (Publication 554)
- Federal Tax Information on Community Property (Publication 555)
9. Pay your bills online
Paying your bills online can help you save time and money; help get rid of penalties or late fees; and they are very easy to set up. There are even some businesses which allow your account to earn perks and a little interest by paying bills before they are due.
10. Learn how to make the most out of your shopping money
Very few men consider shopping as their forte, but this does not mean that you have to spend a huge amount on groceries when having the kids over.
To avoid impulse buys, make sure that you and the kids have eaten a meal or a light snack. Those cravings will make you all reach for junk food items and sweets, which would make the bill hike up. Make a list of the items that you need at home, and stick to it.
To save money as a divorced dad, you can also find a good mechanic and develop a good relationship with them so you can get the best service and not be ripped off with service fees. Even if you live in a small apartment, try to conserve energy. Don’t use your credit card more than you have to.
Being a divorced dad poses a huge challenge for men to manage their budget, but it is not an impossible feat. By following these simple tips, you can save money and gain better control of your finances after such a life-changing event.
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