When parents are divorced or never married, child support is the obligation for a periodic payment made directly or indirectly by a non-custodial parent to a custodial parent, caregiver, or guardian. Non-custodial fathers who have never been married to the mother of their child are obligated to pay child support as long as paternity for that child is established. If child support payments are not made, non-custodial parents accrue arrears and can face penalties depending on their state of residence. Paying child support, and providing for children that are not shared with a current partner, can add a layer of complexity when parents are establishing new marital and financial relationships.
Two Hypothetical Couples’ Approaches to Financial and Relationship Decision-Making
“Andrew and Erica”
It was instantly clear that Erica and Andrew had different styles of spending and different views on the meaning of money. To Erica, money caused anxiety. Growing up, money was tight and her parents were compulsive savers. To her, money was security and never came easy. Andrew came from a family that was not as concerned with money, and never worried financially about their future. He viewed money as enjoyment and status and was thus inclined to spend more than his wife. As they recognized their differences, they decided that the best way to avoid misunderstandings was to learn about each other’s histories and habits. The couple wanted to buy a car but Andrew’s credit history wasn’t perfect because he had a history of not paying his credit card bills on time. Once Andrew shared his history with Erica, they decided together to merge some of their finances but keep a checking account and one credit card in each of their names. So when they applied for a car loan, they decided to use her name to apply, avoiding high rates. They used their joint account for all living expenses so that they both contributed their fair share. In addition, Erica helped her husband start to improve his credit score by working together to handle finances and teaching him to get into a routine of paying all bills on time. Together, they checked both of their scores twice a year to monitor their progress. Once they had their finances on track, Andrew helped show Erica that spending money does not always have to be scary and making purchases can improve their quality of life.
When Erica and Andrew got married they were aware of the financial implications that follow, that they would now be sharing responsibilities in their relationship and in their finances. Erica made an effort to be involved in the financial decision-making and Andrew was happy to share the responsibility. They knew that by working together instead of allowing one person to be in control, they would be more satisfied in their decisions. By establishing trust, subsequent financial obstacles were easier to overcome successfully. Erica and Andrew agreed on how to spend and were not overly concerned with how their partner was handling their money.
“Kim and Gabe”
Andrew’s sister, Kim, had also just decided to move in with her significant other, Gabe. Like Andrew, Kim shared her brother’s spending style and poor credit history. She was embarrassed because of her debts so she didn’t tell Gabe about them. Similarly, Gabe had a son from a previous marriage that he was too scared to tell Kim about. He assumed she wouldn’t want to deal with the extra baggage he would bring to the relationship. So, he kept his child support payments secret and avoided any discussion of finances with Kim. The couple figured that by hiding their financial shortcomings, they could avoid fighting and embarrassment so they only brought up money when it was absolutely necessary. Like Erica and Andrew, Gabe and Kim were looking to buy a car. Unfortunately, since they did not talk about their financial histories, they did not take their credit scores into consideration and ended up obtaining a loan with a higher interest rate, paying $75 more a month, or $900 more a year, than Erica and Andrew. They were now making large monthly payments to a car loan; while Gabe was also secretly making his monthly child support payments. Erica didn’t understand why they didn’t have more money and why Gabe seemed to lie about his spending. Instead of facing their debt, the couple began to use their credit cards to buy almost everything because it was convenient and to them it seemed like they weren’t paying out of pocket. Their credit histories suffered even more as they struggled to pay their bills on time and their money saved was dwindling. They knew that they were in trouble but were too embarrassed to be honest with each other. They had never established any trust or commitment to work together in dealing with their finances and became more secretive and separate. The damages to their finances and relationship were apparent with more arguments and criticism.
Kim and Gabe did not build knowledge, trust, reliance and commitment in their relationship as Andrew and Erica had. They made the decision to share their lives but not their finances. They thought by hiding their flaws, they could avoid problems, but instead they created deeper issues that are difficult to fix.