Money Management Tips for Blended Families
How to Navigate Financial Dynamics When Merging Two Families into OneKathy Longo, CFP®, CAP®, CDFA Wednesday, 12 January 2022
Identify the Challenges
Let’s begin by reviewing some of the common challenge areas you may face as you and your new spouse join your lives together, finances included:
- Money values
- Spending habits
- Financial philosophies
- Kids and money (chores, allowances, savings accounts, and more)
It’s important to remember that money matters are very much tied to our emotions, so it’s natural if you are feeling these sorts of challenges very deeply. In order to preserve – and strengthen – the health of your marriage, here are the steps I recommend taking.
Step 1: Get Really Honest
Before getting married is the ideal time to have an honest financial conversation with your significant other, though you can certainly lay all these cards on the table after you’ve tied the knot, too. You want to get an understanding of what each of you is bringing into the marriage financially – for better or for worse. Share your financial backgrounds with one another, talk about your current situation, including any credit card debt or student loans, and lay out your personal financial goals for the future, too.
If one or both of you are paying child support, discuss these specifics. Child support payments often mean a smaller pot of money to support the needs and goals of the new family unit, and it’s important that both spouses understand this ahead of time.
SEE ALSO: Families and Finances: Communication is Key
In essence, you want to be sure that neither spouse will be subject to any financial surprises.
Step 2: Consider Whether a Prenup is Right for You
Some people consider “prenup” to be a dirty word, but it can be a blessing in that it will help you and your new spouse facilitate financial communication. Not only can a prenuptial agreement be an effective tool for financially protecting you and your children from previous relationships, but it can give you a clearer view into your partner’s financial personality and money values, too. Although it can seem less than romantic, keep in mind that the idea behind a prenup is to ensure both partners – and their children – will be properly cared for in the event the marriage doesn’t last.
If you think a prenup may be right for you, consult a lawyer you trust. Remember that a prenup should help your marriage, not hinder it.
Step 3: Collectively Tackle Estate Planning
It can be uncomfortable to think about the end of your own life, or your spouse’s, but think of estate planning like writing a love letter to your family. Particularly when you are in a blended family, and you have children from a previous relationship, it is critical to ensure your wishes for your assets will be carried out and your family members are taken care of in the way you desire. You and your spouse should tackle your planning together so that nothing is left out and there is no room for a future “tug of war” between a surviving spouse and children from a previous marriage.
As you consider your estate, you should also make it a priority to establish:
- A power of attorney to make financial decisions on your behalf if you become unable to
- A health care proxy who can make medical decisions on your behalf
Be sure that you work with financial and legal professionals to get all these legal documents in writing.
SEE ALSO: Three Financial Conversation Starters to Improve Your Relationship in the New Year
Step 4: Have Regular Financial Date Nights
As in any relationship, managing money matters in a blended family will take ongoing effort. Try for a monthly “financial date night” where you can discuss anything that has come up and ensure you’re on the same page. These are great times to discuss practical matters like bill paying, address evolving money values around issues like allowances for the kids, and have fun dreaming about future financial goals you both share.
Marriage can be complex, and so can money matters. When you’re facing both in a blended family scenario, it can be stressful and overwhelming. Remember that open communication is key to any healthy relationship and discussing your finances together can further strengthen your bond, too.
If you’d like professional assistance as you blend your finances with your new spouse’s, we’re happy to help! At Flourish Wealth Management, we understand the challenges around money and relationships, and we work to help our clients have better, more productive money conversations. Contact us today to schedule an initial conversation.
About the Author
Kathy Longo, CFP®, CAP®, CDFA
Kathy Longo brings over 25 years of expertise and experience to Flourish Wealth Management. Kathy is wholly dedicated to improving the life of each client and finds joy in making complex matters simple and easy to understand. She excels at asking the right questions, uncovering new possibilities and implementing the most advantageous strategies for success. Playing such a pivotal role in her clients’ lives remains an honor and a privilege. After earning a degree in Financial Planning and Counseling from Purdue University, she began her career at a small firm in Palatine, Illinois where she worked directly with clients while learning to build a viable, client-centric business. Over the years, she gained extensive knowledge and wisdom working as a wealth manager, financial planner, firm manager and business owner at notable, various sized companies in both Chicago and Minneapolis.