Dear Kim,
My daughter is 16. My ex-husband pays child support, but that support is scheduled to end in 18 months when my daughter turns 18 and graduates high school. I’m re-evaluating my budget with this upcoming loss of support while also helping my daughter understand budget planning. What are specific areas that I should be considering and planning for?
Sincerely,
Handling Income Adjustments
Dear Handling Income Adjustments,
Let’s begin by talking about how you’ve been using the child support payments to this point. Are they necessary to make your monthly budget balance? Or have you been saving those deposits for something down the road, such as your daughter’s education? If you have been spending those funds each month, then unless you have a plan for replacing them, you will need to begin looking at your budget and finding areas you might be able to cut back. You’ve got 18 months to get that figured out, but if you can begin now, you can save part of that money for use down the road. I applaud you for not waiting until the last check has arrived.
When you’re looking at possible cuts, begin with the items that are harder to reduce, such as your mortgage (unless you have plans to move to a less expensive home), utilities (can you turn lights off and the thermostat down), and other fixed expenses. Then look at items that can more easily be reduced, such as eating out, clothing, and entertainment.
To help your daughter understand budgeting, if you are comfortable, show her how your budget works. Show her how much money comes in each month and what your expenses are. You can discuss budget cuts with her and you can decide together where you might find ways to reduce spending.
I wish you the best as you work on balancing your new, upcoming budget. I also applaud you for teaching your daughter while she is young. You’re setting her up to make good choices her whole life.
Kim
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