Money issues can be one of the biggest obstacles for couples. This goes double for couples entering their second marriage.
In this article, we address the key issues that need to be addressed, and offer practical advice on to make sure your relationship has a smooth takeoff.
Article At A Glance
- Transparent Financial Histories: Essential for trust and avoiding future strains, partners must discuss past debts, obligations, and money management views before remarrying.
- Unified Financial Goals: Aligning on shared financial objectives enhances relationship satisfaction and focus, as compatible financial outlooks contribute to stronger unions.
- Joint Budgeting: Implementing a shared budget for household expenses reduces money conflicts, with regular finance discussions linked to happier and more intimate relationships.
- Updated Estate Plans for Blended Families: Important to adjust estate plans to reflect remarriage dynamics, including considerations for children from previous unions, to ensure desired asset distribution.
Stepping into a second marriage can be redemptive (if you experienced a painful first marriage). Or it can be challenging. Like walking through a minefield. Especially when it comes to finances.
Michelle and I both came from previous, broken relationships. For her, one of the biggest challenges revolved around money and financial responsibility. As our relationship moved from friendship, to dating, to marriage, we realized this was an area that needed boundaries and accountability.
Discussing Financial Histories
It has often been said we live most of our lives looking in the rear view mirror. If you’ve ever been through a painful divorce, you realize just how true this is.
However, to move forward, you have to shift from looking at the past to getting a vision for your future. This means we have to address the past before we can look forward.
Questions You need to Address
Dealing with the past (when it comes to money) means you must have difficult conversations. The good news is that once these initial conversations are behind you, you can move forward with confidence and trust. It doesn’t mean you will never have to revisit them, but the hard work is done and a foundation of trust is in place.
Here are a few things that need to be discussed before you remarry. If you are already remarried, make sure you plan a time to have a family meeting to bring these to the table. It’s not too late to get your financial business in order.
1. What are your current (and future) financial obligations.
This includes alimony, child support, childcare expenses, debt, and any (read all) financial obligations.
Unfortunately, my divorce was very costly. I ended up taking on a lot of debt and responsibility (that’s another story all together) they put me in a tough financial spot. This was definitely something we had to discuss and figure out how to handle this.
Having the difficult conversation on the front end helped us get a plan to tackle financial setbacks in a healthy way. Since our view of money is similar (see below), we were able to tackle this and put it behind us in record time.
2. How do you feel about money?
What is your money personality? Are you a spender or saver? How do you feel about debt? What is good debt vs bad debt?
Because of previous wounds in this area, Michelle needed to know how our money personalities fit. Since we are both savers,
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3. How is your credit?
Credit history can have a devastating impact on your relationship if you are caught off guard by a bad credit score. It affects interest rates and other issues when it comes to your finances.
4. What assets do you bring to the relationship?
Do you own property? If so, what happens to it now that you are remarried? Does the ‘ex’ have any rights to the property? Will your new spouse be on the deed?
Some of these questions might require legal advice. That’s ok. The most important thing is you are discussing matters that can wreck your marriage if they are left unattended.
5. What about children. Is there an inheritance for them that needs to be discussed?
If one partner (or both) have children, what kind of inheritance is on the books for them? Will all assets be shared equally? Or are their previous agreements that need to be discussed.
This was an area that Michelle and I discussed at length. We both have children from previous marriages. So, we needed to map out how family inheritances would be passed down.
Fortunately, we both view this in a similar way, so we had no issues. But it could potentially be a problem if not discussed.
The key to navigating financial histories is to be honest and address the issue(s) head on. Communication is your ticket to success when it comes to money problems and financial matters.
Not only is your financial history important, but your dreams, goals, and future plans are equally important.
Establishing Your Financial Goals Together
I stress the word ‘together’ in this section. Financial goals should be things you share in common.
I realize we each have our own goals, dreams, and desires. We should ruthlessly pursue those things in our heart. Our spouse can even be our cheerleader as we move in the direction of our dreams.
We should also have dreams and goals WITH our partner. I’m a firm believer that couples who craft common shared goals are those who more satisfied in their relationship than couples who do not have shared goals.
According to Van Smith (Founder of Smith Strong PLC):
There is clear evidence to support the fact that couples who have compatible views on budgeting, saving, and financial planning for retirement have stronger, more satisfying marriages.
How To Plan Financial Goals Together
While there is an abundance of information on financial planning (and you may want to consider seeing a professional financial advisor), here is one simple thing you can do to set and keep your financial goals in place.
- Set a designated time without distractions to discuss your big picture money goals.
- Write them down so they are visible.
- Put them on a dream board.
- Look at them every day.
These are simple steps, but we’ve have found doing this keeps us focused on the things that matter. It motivates us and even helps us make money decisions.
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Our ‘dream board’ is our big picture goals. Anything else is secondary. We measure all spending based on our board.
Sure, sometimes unexpected things come up. Especially when running several businesses. But we try to measure all family purchases based on the question: Will this move me in the direction of our dreams?
It’s amazing how goals can keep you focused and motivated.
Create A Money Plan
A 2023 study of couples in the UK found that only 12% of couples use a budget. That’s 1 in 8. Most of these couples keep their money separate.
Contrast this with the fact that happy couples discuss money on a regular basis. 57% discuss finances weekly. 86% do so on a monthly basis.
A Simple Method Of Money Planning
Money planning doesn’t have to be difficult or complicated. In fact, the more simple the plan, the easier it is follow.
Here are a few tips:
1. Use a budget.
We’ve written about this often. Budgeting is fundament to managing your money. A budget allows you to measure, track, and control spending.
It also serves as a monitor for both partners. The budget is king. Once you establish a budget, it minimizes conflicts because the budget is the final decision on spending issues.
Surveys indicate that couples who budget together are more likely to have a great sex life and be more satisfied in their relationship.
2. Use a common bank account (especially for household expenses).
This is often a debated topic, but surveys find that couples who have a shared account, do better at managing their money.
Research done by Jenny Olson (assistant professor of marketing at University of Kelley School of Business) found that couples with joint bank accounts experience higher levels of relationship quality, including fewer fights over money and greater satisfaction with how household finances are managed. This is attributed to a sense of communal identity and shared goals that joint accounts seem to foster, as opposed to the more transactional nature of managing finances separately.
This doesn’t mean you can’t have a his and hers account. I know several couples who have separate ‘fun money’ accounts. But their household, daily expenses are combined. They both contribute which reduces conflict and money battles.
3. Put something aside for savings
This money is to be used for emergencies. It is wise to always have funds earmarked for unexpected things.
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We recently had an issue with one of our vehicles. It cost nearly $1000 to get repairs done. This was an unexpected (and unwanted) expense. But we had the money for emergencies so it didn’t ‘break us’ or cause a marital conflict.
Let’s be honest. Things happen. So, be like a boy scout or girl scout and be prepared.
4. Put something aside for the future
According to USAFacts, almost half of American households have no savings for retirement.
The rule of thumb is ‘pay yourself first.’
Or, as in our family, pay tithe, then pay yourself, then live on a budget.
This simple formula seems to work well.
“By setting aside specific time for these conversations instead of tackling them during a date night or while running out the door in the morning, couples can ensure financial conversations are a part of their regular routine and give their finances the time and thoughtful attention they deserve.”
Alissa Van Volkom, Head of Consumer Deposits, Products and Payments at TD Bank
Schedule Financial Check-In’s
Because Michelle and I both had bad experiences in the past over money issues, we set some ground rules up front for our relationship. Those boundaries have helped us navigate changes and setbacks in a healthy way.
Now that we have several business we run, it is even more important to discuss financial matters.
To make sure we are on the same page and are moving forward with our goals, we have a day each quarter where we go away for the day and map out the coming quarter.
We write out our goals, affirm our dreams, and review our finances.
Of course, this is not the only time we talk about money or look at our finances, but it is a dedicated time to focus and make sure we are on the right path.
Your plan may look different than ours. It should. It should fit your goals, schedule, and life rhythm. The important thing is to have a regular time to discuss important issues. In this case, money.
What About Estate Plans
This is where you need a professional advisor for your specific situation.
Blending families and finances in a new partnership is like mixing your favorite smoothie; you want the result to be just right. Now that you’ve got the daily living recipe down, it’s time to make sure your estate plan is also tasting great for this new chapter in your life.
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Remarriage shakes things up, not just at the breakfast table but also in the serious world of long-term financial planning. Updating your estate plan to mirror these changes is like ensuring your smoothie has the right amount of berries.
Bringing stepchildren (or as we say, bonus children) or a new spouse into the mix? It’s like deciding to add some extra ingredients into your smoothie.
Adjusting beneficiaries ensures that your assets are shared just like you’d share that perfectly blended. Refreshing those estate planning documents is crucial to make them reflect your new relationship status.
It may be a smart move to consult a lawyer in this matter. It’s like asking a master chef for the secret ingredient. They’re the pros who can help you tweak your recipe, ensuring it’s perfect for the unique blend that remarriage brings.
By rolling up your sleeves and making these adjustments, you’re making sure that your estate plan isn’t just good on paper but also serves up the protection your blended family needs.
What’s Next?
Marriage can be challenging. For newlyweds, you have two people who (for the most part) have never lived together beginning a new life. Expectations, desires, and traditions play a huge role in establishing a new family. It often comes with a struggle to get things right.
Remarriage can be even more challenging. In this case, you have two people who have past baggage, broken promises, and ‘events’ that have shaped their perspective. This makes the struggle to get things in order even more difficult.
It’s all the more reason to talk openly about issues that matter to you, and work together to create a plan to have a successful relationship.
These tips will help you get your money life in order so you can build the marriage you desire and deserve.
Where To Find Help
Here is a list of financial resources and tools you can use to get back on track, and stay on track with your money.
Repairing Credit
Credit Repair Magic will fix your credit fast using simple, practical methods that have worked for thousands. Plus get extra bonuses when you sign up.
Debt Elimination
The Debt Relief Manual offers practical advice on everything you need to know on HOW to eliminate credit card debt without getting trapped.
What’s Lies In Your Debt is a powerful program that not only helps you eliminate debt, but teaches you how to stop collections, repair your credit, and much more.
Changing Your Money Mindset
For those who want to change their money mindset and learn how to manage and use money effectively, we recommend Robert Kiyosaki’s Rich Dad Summit. It is costly, but once you are able to invest in your future self, this program is worth the money.
Take this short quiz to find out God’s wisdom for your finances today.
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If you are looking for a financial advisor in your specific area, try Money Pickle to get the right advisor for your money values.
Our Courses and Quizzes
We have courses available that will help you grow your marriage and create a healthy relationship. Visit our Academy Library here.
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