HOW TO DEAL WITH FINANCIAL ISSUES IN BLENDED FAMILIES
Blended families are no longer a rare occurrence with lots of people remarrying in Australia. A characteristic of these blended families is that they can have lots of children at different ages with even more added over time! Bringing all these young adults, teenagers and children together in one household can be a monumental task, creating financial chaos, even in the best of times.
Managing money in blended families can take a lot of juggling, particularly if you have school fees, teenagers wanting their own cars, mobile phones and a plethora of other family expenses.
It is not just the day to day costs but what if the unthinkable happens and one partner passes away for example. If you haven’t discussed this and put your wishes in place, this can create an absolute nightmare for those left behind.
The best strategy is to be honest and broach the subject of money head-on, and don’t avoid it and hope it will all go away.
Honesty is the best policy
In a new marriage with a blended family, discussing your financial commitments and on-going budget is just about essential to a happy marriage. These discussions have to include ‘maintenance’ obligations for both a previous spouse and children from the prior marriage (or marriages), as well as any unwritten obligations to help pay school fees, private education, holidays etc.
Previous and ongoing debts must also be acknowledged and a plan put in place to pay them off as quickly as possible. Another discussion that is very important is how each of you deals with money – do you like to save or spend? If one of you is a serious spender and can’t keep a dollar in their pocket, you may well struggle to keep a handle on your finances without a solid plan in place.
Older children also need to be brought into the discussion, understanding that whilst you will do your best to give them everything they need, everyone must stick to the family budget, which can only stretch so far. Having to support a large blended family and even a previous partner and children can be a huge drain on a family, so everyone pulling together is essential.
Set up a Will just in case
With blended families, it is crucial to have the discussion about money and ‘what if’ especially when there are children involved. If you don’t take steps to separate matters of money and guardianship in your estate plan, your kids and assets can become a mind field as to who gets what. This is just one example. In the unlikely event that you do lose a partner, you do not want to be having these stressful things to deal with on top of grieving.