How to manage money together

Insider: If you are going to start a second marriage and have children, you and your partner need to talk about money seriously. Here are some tips for you to consider mixed family finances.

Talks about money can be uncomfortable and complicated, but they are very important. This is true for couples who are considering marriage or cohabitation. This is true for soon-to-be parents who are trying to budget for parental leave.And this is especially This is true for couples who create a mixed family together.

Even if you don’t want to talk about money with your partner, these conversations should be conducted before you make any major financial commitments. Talking about money early and often can help you avoid uncomfortable and costly financial situations in the future.

Helping mixed families solve basic financial problems

Family integration may be a wonderful experience, but when it comes to financial integration, things may get complicated. It is important that you and your partner sit down and discuss important issues, such as:

• How do you plan to allocate household expenses? Will it be allocated according to the 50/50 ratio, or will the expenses be allocated according to each person’s income?
• How will you pay for your child? Is it evenly distributed or based on how many children each of you brings to the mixed family?
• Do you want to choose a shared bank account or keep a separate bank account?
• How will you pay for common household expenses? Shared credit card?
• Will the children get an allowance? How will you teach your children about money?
• What are your common long-term financial goals? Do you want to save enough money to help your child pay for college? Are you focused on early retirement? Or, do you have a large amount of collective debt to be repaid?
• Do any of you have a financial obligation to your predecessor?
• Do you need a financial planner to help you understand your overall financial situation?

How to build a mixed family budget

After discussing the answers to these questions, you can use this information to develop a mixed household budget. This can be done in three simple steps on a piece of paper or using a spreadsheet.

1. List the income you bring in each month
2. List your family’s fixed expenses (rent, mortgage, insurance, child support) and variable expenses (dining out, activities, buying clothes)
3. Subtract your expenses from your income. If you have remaining funds, make a savings or investment plan. If you spend more than you earn, you need to adjust your expenses.

Other tips on different types of budgets and more information on how to make a budget click here.

allowance

Speaking of your children, another topic you and your partner can discuss is allowance. Do you all agree to subsidize your children? if it is like this, How many? And, at what age do you want to give your child pocket money?

Giving children pocket money is a good way to teach them money management. Once your child is old enough to count, you can begin to introduce the concepts of money and pocket money. This gives you the opportunity to discuss expenses, savings and donations.

For older children, giving pocket money is a good way to replace their constant demand for money. Hold a family meeting and determine how much you will provide for each child each month. If they get a different amount, please explain why. In this way, they can plan and save for their social activities and determine how much pocket money they will use for shopping.

Pay college fees

Going to college is expensive, especially if you have multiple children. If you and your spouse can afford it, and you decide that paying for college is an important financial goal, then you need to develop a game plan to achieve it.

Do you have to pay for all your child’s college experience-tuition, housing, transportation, food, and living allowance? Or, are you willing to pay a certain amount of tuition in one go?

Do you want to contribute to the college fund for all your children, or just focus on your own children? Will your ex contribute to your child’s college savings?

You can also involve your child in these conversations.Set recurring Family meeting Discuss financial topics such as universities. Talk about the cost of university tuition and whether they must receive student financial assistance.

Family meetings can also provide a great opportunity to talk to your children about student loan debt and the impact on their future. You can also talk about the benefits of getting a scholarship and how to help them avoid taking on additional loans.

How to hold a successful family meeting

Plan to hold a family meeting once a week or once a month, whichever suits your situation. Create an outline of what you will be talking about, and involve each family member in the conversation.You can review your Last meeting And any unresolved topics. Just as you and your partner must keep the conversation open, it is also important to make your child feel that they are part of the conversation.

Estate planning

The estate planning process includes preparing for the management of your estate (your house and other assets) after your death. When it comes to financial topics that people don’t want to talk about, estate planning may be the most important. First of all, it is difficult for most people to just talk about money, but with the topic of mortality, you have a real party initiator!

Although this is not a favorite topic, it is important to be prepared for each situation, especially when you have children. When discussing your estate plan, you need to cover the following topics:

• Do any of you have a will?
• Do you have life insurance?
• Have you appointed an executor for your estate?
• Have you discussed your wishes with your family?
• When you and your spouse are away, how do you want to allocate your assets to your children?
• Do you want to set up a trust for your children?
• When your ex is the surviving spouse of the previous relationship, do they have any requirements for your finances?

If you and your partner do not know where to start discussing estate planning topics, or you are just trying to solve this problem, please consider hiring an estate planning lawyer to develop a comprehensive estate plan.

Are you ready for the first family meeting?

To be prepared for all the different financial situations you may encounter as a mixed family, from allowances to college and even death, it is important to start the discussion as soon as possible. First, hold regular family finance meetings, and then choose a topic for the agenda. Get insights and ask difficult questions. The best way to avoid future financial disputes is to talk early and often.

— Jessica Martel