Q: My spouse and I are both in our second marriages and we share custody of our kids from our previous relationships. We're committed to making this work, but part of building our new life together is figuring out the finances. We manage money differently and catch ourselves arguing in front of the kids. How do we fix this?
A: Blending families also means blending your values, and our financial choices tend to reveal what we hold near and dear. While you have a unique set of challenges to work through, you also have a tremendous opportunity to learn with each other, teach your children financial responsibility and reap the rewards.
Create a Detailed Budget
I recommend that you and your spouse create a detailed budget that accounts for all income: employment, child support, child-tax benefit and so on.
It also should account for all expenses such as housing, living expenses, transportation, discretionary spending, child support, allowance, debt payments and activities.
This may take a few weeks to develop, but it should give you and your spouse an accurate financial overview of your situation.
Set Short-Term Goals
Now that you know where you stand, establish some short-term family goals that you can work toward together. You may want to save for a night out at the movies, attending a sporting event or taking a short vacation or a family item such as a Wii.
This is a great way to include the kids and learn together. By creating at least one short-term goal, everyone quickly gets to see the results of working together.
Agree on Some Basic Rules
To make it easier to follow your plan, develop some basic rules, and agree to stick to them. For example:
- We agree to track our expenses and reconcile them every Sunday as a family.
- We agree to pay bills together.
- We agree that each family member gets an allowance and once it runs out, it's out. That's all.
- We agree to discuss purchases of more than $200 ahead of time.
- We agree to review our financial goals as a family and track our progress every month.
Recognize that you will still face disagreements despite having a plan in place. The reality is that no family is perfect.
However, your plan will help you manage what you don't agree on, and let you focus on solutions. Demonstrating to your children how you work together for the success of your family is a legacy no financial inheritance can beat.