Jan 25, 2011

New Beginnings Money and second Marriage

Finances

Money issues are the number one strain on marriages, this being said when you are talking about remarriage, or remarriage with children this fact is amplified.  No one likes to talk about money, but when you are dealing with a blended family you are dealing with blended finances and there must be some understandings in order to succeed.

            We will look at some pivotal points and some options for dealing with them.

• Income, there are lots of things to consider.  How do your two incomes come together, or will you maintain separate bank accounts?  Does one of you make a significant amount more then the other, how will this affect how you budget your money?  Has spousal support been part of the income that has been maintaining one of the households, and if so how will you subsidize this loss once you are married?  How does child support (paid out or taken in) affect your budget?

• Child Support; now this one is a hot button for a lot of couples for a lot of different reasons.  It can be a harsh reminder for an insecure spouse of the other spouses past, it can feel like an emotional and financial burden that is too high a price to bear for the new family, it can be an issue where the child does not see the bio parent and it just feels unfair.  These are all things that must be discussed in order to effectively move to the next issue in this discussion. 

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  • This can be one parent pays support out and one parent receives support, both parents are paid or pay out child support.  Who is responsible for the child support that is paid out?  Is it a joint obligation or falls on the shoulders of the bio parent?  What do you do with the child support paid in?  Is this support for maintaining the household, for paying for the children’s extracurricular and physical needs, or to be put into a separate account to be used for the children’s well being at the discretion of the bio parent?

• Past Debt; more then likely you both came into the marriage with some amount of debt.  Who is responsible for this debt now that you are married?  Look at ALL the debt in an open honest manner and decide what is good debt and what is bad debt and how will you work on paying this down. 
  • Bad debt is credit cards, attorney fees that were racked up during your divorce, car notes;
    • Bad debt is debt that just continues to drag you into more debt.  Credit cards once they are run up are difficult to repay and the money you borrowed on the card is paid back time and time again if you pay only the minimum payment each month, and car notes though they help you earn credit, they are loans that are taken out on goods that are increasingly loosing rather then gaining value.
  • Good debt is mortgage, and child support. 
    • Good debt is debt that you are seeing a return for, your mortgage is helping to build your credit, providing a roof over your heads that is hopefully increasing in value, child support is good debt because this allows you to see your children’s lifestyle stay at a standard that is acceptable for you and their other parent.  

Now that you have all your debt out on the table how will you deal with this as a couple?  Will you put your money into a pot and dull out a certain percentage or amount to each spouse for their personal debt?  Will you maintain two separate Checking accounts and sit down and divide bills and pay them, or will you simply roll all your money into one account and pay all bills from that account? 

• Attitudes about money; this is again baggage that we come into a marriage with, it is up to you weather you use it as a gift or a curse.  You have to identify the style of not only your self, but your spouse.  Are you a saver, or a spender?  Are you lackadaisical when dealing with money or are you uptight?  Are you a “credit, GET IT” or anti-credit?  You may find that you and your spouse are both on the same page in all these areas, totally opposite, or a mix.  Find out who you are and then sit down and talk about how you can make these identifications work for your family.  You will also have to decide what your goals are for your money.  Are you interested mainly in putting the children through college, or saving for your retirement, building a vacation home or driving a nice car?  Identify what is important, prioritize and then plan.    

Now you have the structure to start the conversation, remember that your “plan” does not have to work for any other family then your own, so do not fall into following the neighbors plan.  Do not feel ashamed if this is difficult; remember everything is hard before it is easy.  Lastly, remember that this plan may grow and change as your family grows and changes, be ready to revisit your plan as needed.

By Mattie Singer