Wrinkly

The other morning my 5 year old son woke up, got himself dressed for school and came down to my bedroom. When he walked in, I commented, "You're awfully wrinkly!" He looked a little confused and said, "What does wrinkly mean?" I explained that I was referring to all the folds, lines and creases in his clothing... that it looked kind of messy. Armed with that definition, he took a step closer to me, ran his finger underneath my eye and said, "Mommy, you're a little wrinkly, too!"

A Word of Caution

I've spent a lot of words the last few days on the costs of raising children. You can google "what does it cost to raise a child" and find all kinds of calculations, but the bottom line is that every family has it's own set of values and priorities and therefore spend more or less money than others on different goods and services. I used an example in my last post to demonstrate that having a child did not significantly raise my automobile costs. I did not balance that, however, by pointing out that while many families increase their monthly housing costs by $200 - $300, mine more than doubled. This is because of the priority my husband and I put on everyone having private space and shared space dedicated to different activities.

After rereading my last point, I felt the need to come back to this. While I am an advocate of father's rights (with respect to good fathers being involved in their children's lives), online calculators on several men's sites such as this one are no where near being accurate. My childcare costs, for example, are more than double what is in this table as are several other expenses (as a matter of fact, my son's daycare costs have been double the average tuition cost of state colleges). Here are some other links to consider if you want to actually calculate the cost of raising your children, but I strongly suggest you critically analyze each one for how well it actually represents YOUR life (as well as what year the calculator was created):

http://www.babycenter.com/costofchild/
http://www.bankrate.com/brm/calc/raiseChild.asp
http://www.yourmoneyyourlife.org/mk1.html

Step Parenting Part 4.5 - More on Money

CompletelyBrunette did a great job of representing the rest of the story. The core problem with child support orders, at least in Wisconsin, it they have no basis on what it actually costs to raise a child. There is a very general assumption that every family, regardless of income, pays a fix percentage of their gross income to raise 1, 2, etc. children. This is only true in a narrow range of cases that typically involve both parents earning a decent income. Furthermore, the difference between 1 and 2 or 2 and 3 is slight because they assume most of the cost is the same regardless of who many children one has (for example, you might by a larger house or car when you have one child, but you typically don't upgrade again with your second). It doesn't represent the fact that a son and daughter might cost more than two sons or two daughters who could share a room and hand down some clothing and toys. Whether or not it covers the cost of putting 2 children in daycare versus one is completely dependent on the payor's income.

I had actually forgotten Wisconsin's new law about a decreased percentage for higher income payors (sorry, it never actually applied to us), but I do recall that getting a raise is not an acceptable reason for the courts to modify your support order. It would only be taken into consideration along with a significant change in circumstance or an initial support order. For that reason, I'm going to stick with numbers I know just for the sake of easy examples. Also, before I get to examples, there are a few common misconceptions I want to clear up:

1. The percentage of income support rule in Wisconsin is an assumption based upon the joint gross income of the parents before the divorce. This remains true after the divorce. The parent with primary placement of the children will be the recipient of child support but it is also assumed that parent is contributing the same percentage of their own income toward raising the children. The state, right or wrong, does not assign a monetary value to the services provided by the primary caregiver. Therefore, if the parent of two children with primary placement earns $40,000 annually and the parent paying child support earns $60,000 annually, it is assumed that $25,000 per year goes toward raising the children even though child support only totals $15,000 per year.
2. The full cost of a larger house or car can not be used to calculate the cost of raising children. Only the difference between what you would have without children and what you have with children can be considered. In my case, for example, I've driven an SUV since before I was married. I continued to drive an SUV for years after I had my son. There was no additional automobile cost associated with having a child other than the extra fuel needed to drop him off at daycare each day.
3. Most people who pay child support have other monetary obligations beyond the monthly payments. In our case for example, in addition to a fixed percentage order, my husband is also responsible for health insurance coverage plus 50% of all uncovered medical expenses such as prescription copays, deductibles, orthodontia, glasses, etc. A particularly interesting situation arose when he was asked to pay 50% of the full cost of dental services because his ex didn't like any of the dentists covered under the insurance coverage he had. The court order didn't actually state that she had to take advantage of the insurance coverage he provided, only that he had to provide it and pay half the cost of medical services not paid for by it.
   
4. There is very little correlation between child support and visitation. Some adjustments are made when the payor has the children on a fairly regular basis (for example, 2-3 nights each week instead of every other weekend), but beyond that there are no dependencies. What I'm getting at is that a parent does not have to right to withhold child support if the other parent withholds visitation rights. Likewise, withholding visitation is not an appropriate response to unpaid child support. Doing this is adding insult to injury on the children.

Back to CB's point about what it costs to raise children. Consider two scenarios based upon a simplified version of WI law - I'm going to use my neighbors as examples because they demonstrate the concepts well, but in real life they are happily married.

The first neighbor has a situation similar to the one CB was in that only one parent works outside the home. The mother owns her own business and the father is a stay at home dad. If they were to get divorced and he was awarded primary placement, she would owe him 25% of her income. Note that this is not a percentage of her company's revenue. Technically, he could request a percentage of the profit, but seeing as how she is in the business of investing money, I'm sure she is aware of many ways to maintain a decent standard of living while reporting a fairly low income and profit margin (providing herself with a company car, for example, would give her a free car and a business expense to write off). I would put the value of their home between 3/4 to a full million and their children attend private schools. The odds of him being able support anywhere near that same standard of living on a quarter of her income are slim to none.

Down the road is another set of neighbors. She is a successful mortgage broker. He attempted self-employment several times and it never really got off the ground. They don't actually have kids, let's pretend they do. Let's say she makes $100,000 a year and he makes $20,000. If they got divorced and she won primary placement of the children, he would owe her $5000 per year for two kids (total cost to raise the children would be assumed as $30,000 per year). A 25% drop in his income equates to a 5% increase in hers. The addition of $5000 to her income probably has minimal impact in terms of the standard of living she can provide. He, however, must support himself on $15,000 per year. Fair? Yes, because I still believe he is legally obligated. What if he was a really nice guy and she dumped him for some doctor who made $200,00 per year? Doesn't matter because the state doesn't care about circumstances.

And we'll use the people across the street for my last example. They are both attorneys and just built and moved into a gorgeous home. They have two little boys. Lets say for kicks that they each earn $200,000 per year. It would be assumed that they spend $100,000 per year raising their children. If they got divorced, you would have one parent with the children living on $250,000 and the other living on $150,000. Great for them, right? Sure, but when you compare their situation to the ones above, you can see the problems that accompany a pure percentage based support order.

The unfortunate truth, however, is that I don't have any ideas on how to fix it in a way that is equitable to everyone short of suggesting that you either wait until you are mature enough to make a good decision about a spouse (??? age 70???) or don't get divorced until the kids are 18.

Step Parenting Part 4 - Money

No discussion on blended families would be complete without talking about money. First, lets just accept the fact that NOBODY, regardless of what side you're on, feels like the monetary settlement in their divorce was fair. In Wisconsin, especially in Waukesha county, the courts place a heavy emphasis on equitable division of assets and use predetermined calculations for child support and maintenance (alimony). Who is at "fault" is completely irrelevant because, as I mentioned earlier, neither party is typically willing to admit their role in the failure of their marriage. If you worked or earned significantly more than your spouse, that does not mean you are due a higher percentage of your total assets. Wisconsin courts don't view assets or liabilities as "His" or "Hers".

Child support, in particular, is a sore spot for most people whether they are on the paying or receiving end. If you are married to someone paying support, it is important that you understand the following facts:

1. Paying to support the children you brought into this world is not only a legal but a moral obligation.
2. The court will determine the amount owed and there is very little you can do to change it.
3. Step parents are not legally obligated to support their stepchildren. If your spouse's ex remarries, that does not imply a reduced support obligation on your spouse's part. Likewise, your income can not be considered in calculating support payments. This is something to remember when debates come up. My husband's ex knows she doesn't have rights to my income from a support perspective, but she did attempt to argue that while my husband should carry a life insurance policy, she shouldn't have to because if something happened to her, the children would be going to a two income household. Sorry, wrong answer. While I would support my stepkids because I love them, that does not mean she is any less obligated to plan for her children's future in the event of her death than my husband is.
4. Accept the above facts and move on. Don't dwell on how the ex spends the money redecorating the house and taking trips while the kids come over in clothes that are torn and too small. There is nothing you can do about it and as wrong as you might think this is, the payee has no accountability to the payor. Once the money transfers hands, how it is used is none of your business.

That being said, the child support system (at least in Wisconsin) is royally screwed up. While laws have changed recently, you can not have your support order changed just because the laws changed. You must have a significant change in circumstances to have your support order modified.

Prior to these new laws, the most common type of order was a hybrid order. What that means is that the payor with two children pays a fixed amount or 25% of his/her income, whichever is more (this was to prevent the payor from taking a lower paying job just to reduce his/her support payments). The problem occurs because the support order is based upon a percentage of your spouse's annual income, but the actual payments due are calculated based upon monthly income.

Let's look at a male payor who earns a straight salary of $96,000 annually and gets paid on the 15th and the 30th of each month, this is no problem. His rate will be based upon 25% of his gross income. Each month he will owe the greater of 25% of his $8000 monthly income or $2000. At the end of the year, he would've paid $24,000.

Now let's look at the same man working for a company that pays every other week. 8 months of the year, he gets paid twice and earns $6857. The other 4 months he gets paid three times and earns $10,286. Since 25% of $6857 is less than $2000, he will owe $2000 those eight months. The other four months, he will owe 25% of $10,286, or $2571.50. Because most payroll systems can't be programmed to handle this method, 25% will be taken from each paycheck. At the end of the year, the support agency will report $2286 in arrears on his account, which reflects an annual payment expectation of 27% of his income.

Even worse, consider a salesman who is paid a base salary plus commission. He may also earn $96,000 annually, but perhaps he only received his base salary for six months ($4000) and earns a great commission plus base the other six months ($12,000). Using the same hybrid formula above, he will be $6000 in arrears at the end of the year reflecting expected payments equally 30% of his annual income despite having an order based upon 25%.

To make matters worse, for some reason new employers frequently deduct your support from your first check but don't send the funds to the support agency. (Almost all support orders in Wisconsin require your employer to deduct the payment directly from your paycheck) Or, they forget to deduct the funds so you send in a check to prevent extra fees and two weeks later your employer realizes the mistake and corrects it, effectively putting you in a double payment situation. In both cases, the payor is accountable. The money is logged at the support agency and forwarded directly to the ex-spouse. The agency is not required to help you recover any over payments.

I'm not trying to discourage anyone, but entering a blended family involves certain issues that you should be aware of before closing the deal. Marry the person you love, but don't expect to feel any amount of control over your finances until the support order ends. Don't let the situation add stress to your life, just remind yourself that it's probably better to marry someone who exceeds their support commitment than someone who avoids it all together.