26:["$","$L27",null,{"category":"$28","relatedArticles":[{"id":"cG9zdDoyNTAxMzk=","databaseId":250139,"postId":250139,"author":{"node":{"id":"dXNlcjoz","databaseId":3,"userId":3,"avatar":{"url":"https://secure.gravatar.com/avatar/47938df052bf0a5283bd6b77ab786737?s=96&d=mm&r=g","size":96,"__typename":"Avatar"},"description":"SmartAsset employs a team of writers and editors with years of experience in the editorial, news and personal finance industries. Some staff members also hold the Certified Educator in Personal Finance (CEPF®) designation from the Institute for Financial Literacy.","additionalMeta":{"expertise":null,"__typename":"User_Additionalmeta"},"email":null,"firstName":"Michael","fullName":"SmartAsset Team","lastName":"Carvin","name":"SmartAsset Team","postCount":{"pageInfo":{"offsetPagination":{"total":1371,"__typename":"OffsetPaginationPageInfo"},"__typename":"UserToPostConnectionPageInfo"},"__typename":"UserToPostConnection"},"slug":"mcarvin","__typename":"User"},"__typename":"NodeWithAuthorToUserConnectionEdge"},"categories":{"nodes":[{"id":"dGVybTo1","children":{"nodes":[],"__typename":"CategoryToCategoryConnection"},"databaseId":5,"categoryId":5,"link":"https://smartasset.com/personal-finance/articles","name":"Personal Finance","postCount":{"pageInfo":{"offsetPagination":{"total":165,"__typename":"OffsetPaginationPageInfo"},"__typename":"CategoryToPostConnectionPageInfo"},"__typename":"CategoryToPostConnection"},"slug":"personal-finance","ancestors":null,"parent":null,"__typename":"Category"}],"__typename":"PostToCategoryConnection"},"content":"$29","date":"2024-06-05T20:28:08","excerpt":"

Health insurance costs are included in child support calculations. The process considers premium costs, out-of-pocket expenses and any existing health insurance coverage provided by either parent. The rules and methods for calculating these costs can vary by state, with each jurisdiction having specific guidelines to determine how health insurance expenses are allocated between parents. If […]

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He currently resides in Utah with his wife and five children, where they cheer for the Denver Broncos and make it to the water to sail whenever given the chance. Jeff currently holds the Certified Educator in Personal Finance (CEPF®) designation.","additionalMeta":{"expertise":"Financial Planning, Small Business, Retirement, Banking","__typename":"User_Additionalmeta"},"email":null,"firstName":"Jeff","fullName":"Jeff White, CEPF®","lastName":"White, CEPF®","name":"Jeff White, CEPF®","postCount":{"pageInfo":{"offsetPagination":{"total":16,"__typename":"OffsetPaginationPageInfo"},"__typename":"UserToPostConnectionPageInfo"},"__typename":"UserToPostConnection"},"slug":"jwhite","__typename":"User"},"reviewedBy":null,"writtenBy":{"id":"dXNlcjoz","databaseId":3,"userId":3,"avatar":{"url":"https://secure.gravatar.com/avatar/47938df052bf0a5283bd6b77ab786737?s=96&d=mm&r=g","size":96,"__typename":"Avatar"},"description":"SmartAsset employs a team of writers and editors with years of experience in the editorial, news and personal finance industries. 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","

Who Is Responsible for Paying Health Insurance for Children After a Divorce?

","

One common issue that comes up in the aftermath of a divorce is who will bear the responsibility for maintaining the health insurance coverage of a child. Typically, the responsibility to pay for health insurance for children falls on the parent who already provides coverage through their employer or can obtain it at a reasonable cost.

","

Who pays for health insurance can vary significantly by state. Each state has its own laws and guidelines that determine how these costs are allocated. Some states have standardized rules where the non-custodial parent must provide health insurance if available through their employer. In contrast, other states may take a more flexible approach, evaluating individual circumstances for each parent, such as their income levels and access to health insurance plans, before making a decision.

","

The courts also consider the cost of health insurance relative to each parent’s income. If the parent who does not have custody has access to a more affordable health insurance plan, they may be ordered to cover the children. Conversely, suppose the custodial parent has access to a better plan at a lower cost. In that case, the court might decide that they should maintain the coverage, with the non-custodial parent contributing to the premium expenses.

","

How Health Insurance Costs Factor Into Child Support Calculations

","

","

When calculating child support, courts include health insurance premiums, deductibles and other medical expenses to provide comprehensive coverage for the child. These costs can significantly impact the final child support amount, as they are typically added to the base support obligation.

","

The primary parent responsible for providing health insurance will have the associated costs factored into the support calculation. For example, if the non-custodial parent provides health insurance through their employer, the premiums they pay can be deducted from their income before calculating child support. Different states have specific guidelines on how to incorporate health insurance costs into child support calculations.

","

To ensure fairness, states often use income shares models or percentage of income models to allocate health insurance costs proportionately. The income shares model combines the incomes of both parents to determine the child support amount, including health insurance costs, which are then divided based on each parent’s income share.

","

What Happens If The Party That Isn’t Responsible Pays the Health Insurance?

","

If you find yourself in a position where you have paid health insurance costs that were not your responsibility, the first step is to document all payments made. Gather receipts, bank statements and any communication that shows you have covered these costs. Clear documentation will support your case when seeking reimbursement and help resolve the matter efficiently.

","

To get reimbursed, you can first approach the other parent directly to request repayment. If this informal approach does not yield results, you may need to file a motion with the court that issued your child support order. The court can review the evidence and order the responsible party to reimburse you for the payments made. Legal assistance can be beneficial in navigating this process and ensuring that your rights are protected.

","

Modifications to Child Support for Medical Expenses

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When significant medical costs arise, such as surgeries, therapies, or ongoing treatments, either parent can request a modification to the existing child support order.

","

The process and criteria for modifying child support to include additional medical costs can vary by state. Some states have specific provisions that automatically adjust child support orders for substantial medical expenses. While others require a formal petition to the court.

","

To seek a modification, the parent incurring additional medical expenses must file a motion with the court. This motion should include detailed documentation of the medical costs, such as bills, receipts and statements from healthcare providers. The court will review the evidence and determine whether an adjustment to the child support order is warranted.

","

Bottom Line

","

","

Depending on your state, health insurance costs can be factored into child support calculations. This is typically done by adding the premium amount for the child to the basic support obligation. This amount is then shared between the parents based on their respective incomes. State guidelines and formulas will determine how it gets paid.

","

Tips for Financial Planning

","$36","

Photo credit: ©iStock.com/FatCamera, ©iStock.com/FatCamera, ©iStock.com/LumiNola

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\n","featuredImage":{"id":"cG9zdDoyMjA4ODY=","databaseId":220886,"altText":"A senior couple calculating both median and average incomes.","date":"2023-11-30T13:37:30","fileSize":209427,"mimeType":"image/jpeg","modified":"2023-11-30T13:38:35","sourceUrl":"https://smartasset.com/wp-content/uploads/sites/2/2023/11/iStock-1473197607-1.jpg","__typename":"MediaItem"},"modified":{"datetime":"2023-11-30","readable":"November 30, 2023"},"multipleBylinesByRole":{"editedBy":{"id":"dXNlcjoxMTc=","databaseId":117,"userId":117,"avatar":{"url":"https://secure.gravatar.com/avatar/9fffe2eb35204e151b68731435d247c5?s=96&d=mm&r=g","size":96,"__typename":"Avatar"},"description":"Arturo Conde is a senior editor at SmartAsset. He has a master’s from the Graduate School of Journalism at Columbia University and a bachelor’s from the College of Arts and Science at New York University. 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You can get useful perspective about your financial condition and performance by benchmarking your income against peers using figures for average and median income. Each of these measures offers a somewhat different snapshot. While medians better reflect typical middle-of-the-road incomes, averages capture collective earnings across a group. Understanding the nuances helps savers and investors select an appropriate way to compare their incomes when making key financial decisions. Consider consulting a financial advisor to get individualized advice about different approaches to assessing your income.

","

What to Know About Net Income

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Your net income is equal to your take-home pay after accounting for taxes and other deductions. It is helpful or even vital to know your net income because this is how much of your earnings you actually get to keep.

","

Regularly tracking your net income over time helps you develop a picture of how much disposable income will be available to allocate toward saving, spending or investing goals. You can also compare your net income against your peers. This gives you some context to evaluate your relative financial wellbeing.

","

Businesses also calculate net income by subtracting expenses and taxes from gross income. Investors look at public company reports of net income when deciding which securities to purchase.

","

Average Net Income vs. Median Net Income

","

To summarize and compare incomes meaningfully using averages and medians it helps to gain some more understanding of the concepts. In statistics, these are measures of central tendency. Central tendency measures attempt to use a single value to describe an entire set of data.

","

Averages, also called means, measure collective incomes across a population. Averages are useful and easy to calculate but can be skewed higher by extremely high outlier incomes at the top end.

","

Medians arrange incomes from lowest to highest, then identify the middlemost income where an equal number fall above and below. This eliminates the outsized influence of outliers. Median income figures are usually lower than average income figures.

","

How to Calculate Average Net Income

","

Calculating average net income involves totaling all incomes across a group, then dividing this combined income figure by the number of people. For example, consider five individuals with incomes of $30,000, $50,000, $60,000, $70,000 and $100,000. Their total combined income equals $310,000. Dividing this by five people gives an average income of $62,000.

","

Note that in this example, the average of $62,000 exceeds the incomes of three out of the five individuals. This is due to the outsized impact of the $100,000 outlier earnings figure. When averages differ markedly from typical incomes, it generally signals that incomes are concentrated among high earners and indicates that financial wellbeing is not broadly shared.

","

How to Calculate Median Net Income

","

","

Determining median net income requires arranging all incomes from lowest to highest, then identifying the middlemost income where an equal number fall above and below. For the above example with incomes of $30,000, $50,000, $60,000, $70,000 and $100,000, you would organize them from lowest to highest to determine that the median income equals $60,000.

","

By focusing specifically on the income midpoint unaffected by outliers on either end, medians can provide a more accurate reflection of typical middle-class incomes within a peer group. This often allows better income benchmarking for ordinary savers, investors and retirement planners.

","

When to Use Median vs. Average Net Income

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In situations where average and median incomes are not too different, both measures may reasonably summarize incomes. But when averages exceed medians substantially due to high-end outlier earnings skewing the data, medians better reflect middle-of-the-road incomes.

","

That does not mean averages are useless or always misleading. Averages provide useful perspective into collective incomes overall. With that in mind, simultaneously considering both median and average income measures can create a more complete picture. For instance, consider a case where the average income figure is rising over time while the median income figure is not changing significantly. This can suggest that incomes are increasingly being directed to top earners rather than being distributed broadly across the spectrum.

","

Bottom Line

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","

While median incomes more accurately portray typical earnings, average incomes offer insights into overall earnings levels across a population. Appreciating these subtle differences allows individuals to get a different perspective by benchmarking against peers. Having access to median and average income figures can contribute to better decision-making when saving, spending and investing.

","

Tips for Personal Finance

","$3f","

Photo credit: ©iStock/Pekic, ©iStock/AndreyPopov, ©iStock/SrdjanPav

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Saving for a down payment to buy a home is an important financial milestone. But doing so while paying rent and living expenses can be challenging, especially if you live in a city where those costs are significantly higher than the national median. Here are five ways you can save for a down payment while […]

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Jeff currently holds the Certified Educator in Personal Finance (CEPF®) designation.","additionalMeta":{"expertise":"Financial Planning, Small Business, Retirement, Banking","__typename":"User_Additionalmeta"},"email":null,"firstName":"Jeff","fullName":"Jeff White, CEPF®","lastName":"White, CEPF®","name":"Jeff White, CEPF®","postCount":{"pageInfo":{"offsetPagination":{"total":16,"__typename":"OffsetPaginationPageInfo"},"__typename":"UserToPostConnectionPageInfo"},"__typename":"UserToPostConnection"},"slug":"jwhite","__typename":"User"},"reviewedBy":null,"writtenBy":{"id":"dXNlcjoz","databaseId":3,"userId":3,"avatar":{"url":"https://secure.gravatar.com/avatar/47938df052bf0a5283bd6b77ab786737?s=96&d=mm&r=g","size":96,"__typename":"Avatar"},"description":"SmartAsset employs a team of writers and editors with years of experience in the editorial, news and personal finance industries. 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If you need help with your finances, a financial advisor can work with you to create a plan for your financial goals.

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1. Open a Savings Account for Your Future Down Payment

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One of the most effective strategies to kickstart your journey toward homeownership is to open a savings account specifically for your future down payment. Budgeting a small amount each month can help you reach that goal over time. However, you should look for an account that will offer you a higher interest rate than a traditional savings account. High-yield savings and money market accounts are popular alternatives as they typically earn more than the annual percentage yields (APYs).

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One common way to budget for a down payment is to follow the 50/30/20 rule, which recommends spending 50% of your money on needs, 30% on wants and saving the remaining 20%. This can help you get a clear idea of your budget and map out how much you can spend and save for different needs and goals.

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2. Cut Your Monthly Expenses

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Cutting monthly expenses is another common way to find money that could be saved for your down payment. The first step towards reducing monthly expenses is identifying common areas of overspending. One example could include overspending on eating out and entertainment, which can cut into your savings goals.

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Other common areas where people typically overspend include luxury goods, subscriptions and impulse purchases. Being aware of these spending habits can help you recognize and rectify potential financial pitfalls.

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3. Get Out of Debt

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Many individuals find themselves burdened by debt, which can be a major obstacle in saving for a down payment. Understanding how debt can limit your ability to save effectively is the first step towards financial awareness. And, depending on the size of your debt, you may have to pay it down substantially before you can shift your focus to other savings goals.

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One common strategy to help you manage and repay debt, is the avalanche method, which prioritizes debt with the highest interest rate. So, if you have a $6,000 credit card debt with a 20% interest rate, a $2,000 personal loan with a 9% interest rate, and a $7,000 auto loan with a 6% interest rate, you would focus on paying off your credit card debt first.

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Another debt repayment strategy would be to do the complete opposite: Focus on the debt with the smallest balance, while making minimum payments on other higher balances. This strategy can motivate you to pay down parts of your debt faster.

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4. Earn Money From a Side Hustle

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With more Americans working remotely, and industries offering more flexible hours and contract work, you may find another solution to save for a down payment by taking on a side hustle. This is essentially a secondary job or business that is separate from your primary source of income.

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There are many side hustles available that cater to specific skill sets and interests. From freelance writing to tutoring or selling handmade products online, each option offers a unique opportunity to generate extra income while also developing new skills and in some cases even allowing you to pursue career interests and passions.

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5. Apply for Down Payment Assistance Programs

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As a first-time homebuyer, a down payment assistance program could be another path to achieving your homebuying milestone. These programs are designed to help first-time homebuyers, and individuals with financial constraints, afford the initial payment required to secure a mortgage.

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There are state-specific programs, grants and even loans for specific professions. The California Housing Finance Agency, for example, offers low- and moderate-income homebuyers financing options and programs that focus on equity, while the Homes for Texas Heroes Program offers home loans and down payment assistance to public service professionals, such as teachers, police officers and firefighters.

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Other Costs to Consider When Buying a Home

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Buying a home is a significant financial decision and involves additional costs beyond the principal price. While the listing price of a house might be the first figure that catches your eye, it is only the tip of the iceberg when it comes to the total cost of homeownership. Here are some other costs that you need to pay attention to:

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Bottom Line

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Saving for a down payment while renting can be challenging, but by taking a strategic approach can help you reach that goal over time. Opening a dedicated savings account, cutting down on monthly expenses, managing debt, exploring side hustles and applying for down payment assistance programs are five common strategies that can help you reach your goal faster.

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Tips for Saving Money

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Photo credit: ©iStock.com/courtneyk, ©iStock.com/designer491, ©iStock.com/vitapix

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When you are in a committed relationship, it is not just your personal finances you need to consider. Setting financial goals as a couple is an important step in building a secure future together. Whether it is saving for a home, planning for retirement or ensuring you have an emergency fund in place, financial goals help guide your decisions and keep you on track. After all, these goals are not just about numbers. They are about aligning your values and ensuring that your financial future supports both of your life plans.

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A financial advisor can help you put together a plan designed to reach any goals you have as a couple.

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The Importance of Being on the Same Page

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Being on the same page about financial goals is key to a healthy relationship for couples. Without clear communication and shared objectives, money can become a source of tension, but when couples agree on financial priorities, it creates a foundation of trust and mutual understanding. For example, if one partner is focused on saving for a home while the other is prioritizing travel, there could be conflict. Setting common financial goals helps ensure both partners are working together toward a shared future.

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Maintaining transparency about money is equally important. Couples should openly discuss income, debts, spending habits and future aspirations. This transparency prevents surprises, like undisclosed debt or unexpected expenses, and fosters an environment where both partners feel comfortable discussing their financial situation.

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Respecting both individual and joint financial needs is also important. You and your partner may have personal financial goals, such as building a personal savings account or funding a hobby, while still contributing to joint goals like purchasing a house or starting a family.

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Another aspect to consider is ensuring financial protection for the family. Life is unpredictable, and having insurance coverage or a will in place can protect your family from financial strain if something unexpected happens.

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Examples of Financial Goals for Couples

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Financial objectives vary from couple to couple, but some goals are especially common. These are some of the goals couples often prioritize.

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Down Payment on a Home

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One of the most common financial goals for couples is saving for a down payment on a home. Buying a home is often seen as a massive milestone in a couple’s financial journey, and it requires significant financial planning for couples.

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You must determine how much you need to save. Then, you can calculate how long it will take based on your income and expenses. A good rule of thumb is to save 20% of the home’s purchase price for a down payment to avoid private mortgage insurance (PMI) and secure better loan terms.

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Both partners should contribute to this goal, whether equally or based on income levels, and work together to cut unnecessary expenses and increase savings. You will also want to discuss the long-term financial impact of owning a home, including property taxes, maintenance and mortgage payments, to ensure you are prepared for the ongoing costs.

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Funding a Child’s College Education

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If you have children or are planning to have children, saving for their college education can be a major financial goal. With college tuition rising, it is essential to start saving as early as possible.

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Many couples choose to open a 529 savings plan or a similar college savings account that offers tax advantages. Setting up automatic contributions to these accounts can make it easier to stay consistent with saving over the years.

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You should discuss how much you want to contribute to your child’s education. Depending on your financial situation, some couples choose to allow their children to take on student loans for part of the cost. The key is to create a plan that aligns with both partners’ values and financial capacity.

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Building an Emergency Fund

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An emergency fund is a must-have financial goal for any couple. Experts recommend having three to six months’ worth of living expenses saved in an easily accessible account provides a safety net in case of unexpected expenses like job loss, medical emergency or major home repairs. Couples should prioritize building an emergency fund before tackling other long-term financial goals.

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Working together to build this fund involves setting a specific savings target and making regular contributions. By cutting unnecessary expenses and allocating bonuses, tax refunds or extra income to the fund, couples can reach their emergency fund goal faster. Having an emergency fund not only protects your finances but also reduces financial stress, knowing you have a buffer in place.

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Having Appropriate Insurance Coverage

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Insurance plays a key role in protecting couples’ finances. Whether it is life insurance, health insurance, disability insurance or home and auto insurance, having the right coverage ensures that both partners and their assets are protected. Couples should review their insurance policies together to ensure they have adequate coverage based on their financial needs and life circumstances.

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Life insurance, in particular, is a common goal for couples, especially if they have dependents or shared financial responsibilities like a mortgage. The right life insurance policy can provide financial security for the surviving partner in the event of an untimely death. Additionally, health insurance is crucial for covering medical expenses, while disability insurance can provide income protection if one partner is unable to work due to illness or injury.

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Preparing for Retirement

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Planning for retirement is a long-term financial goal that every couple should prioritize. By age 30, couples should have started contributing to retirement plans like 401(k)s or IRAs. As a couple, it’s important to discuss how much each partner should contribute and whether additional retirement savings strategies, like opening a spousal IRA, are needed.

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Maximizing employer matches, making catch-up contributions after age 50, and adjusting your investment strategy as retirement approaches are all steps couples can take to ensure they are on track for retirement. It is important to have regular discussions about retirement goals, such as when to retire and what kind of lifestyle you want to maintain, to ensure both partners are aligned in their planning.

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Bottom Line

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Setting financial goals as a couple is a critical step toward building a secure financial future together. Whether you’re saving for a home, funding a child’s education, or preparing for retirement, having shared goals ensures that you and your partner are working in sync. By maintaining open communication, agreeing on financial priorities, and creating a clear plan for the future, you can navigate financial decisions with confidence and build a stable foundation for your life together.

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Tips for Financial Planning

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