The New Frugal You
Gary Foreman is a former financial planner who currently edits The Dollar Stretcher website and newsletters. He wrote "New Frugal You," a weekly Q&A column about frugal living, for CreditCards.com
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Dear New Frugal You,
I'm about to be married for the second time. We each have kids from the
previous marriage. Both of our exes caused money troubles, and neither of us want
to go through that again. Are there any tools that we can use to avoid
problems? Advice on whether we should have joint checking, etc.? We want to do
everything we can to make sure that money doesn't break up our marriage! -- Sharilynn
As you've already experienced, money problems can be very
hard on a marriage. So you and your new hubby are right to take steps now to
prevent trouble later. And there are a number of things that you can do to
keep your marriage financially fit.
You can begin by taking the time to do premarital financial counseling. You don't want to be one of those couples who spend more time discussing napkin holders than their financial expectations. So that you don't repeat some ugly history, specifically discuss the financial
habits of your exes that caused problems. This is a great way to learn where your mate is
sensitive -- and for him to understand your hot spots.
Talk about how your parents related to money, and what you
think about money today. Be open about how you evaluate financial issues.
Expect your hubby to be open, too. Insist on honest answers from each other.
You'll need to discuss how to handle day-to-day finances.
Decide how different expenses will be covered.
One frequently used method is the three-checkbook system:
yours, mine and ours. It allows for some money each of you can use as you
wish, and includes a joint account for your bills. Decide in advance how much will go into each account, and discuss what you'll do if the joint account runs short of
money. A plan now could avoid an argument later.
You might also want to consider having a wish list. That's a
list that you both contribute to with things that you'd like to spend money on
if extra dollars were available.
I'll assume you're both working. That, too, is
something that you should discuss prior to the I-do's. Talk over paychecks, when the money comes in, where it should go -- and whether it belongs to you or to the family.
You'll also need to consider your wills. Should all children
be treated equally? Or will the children from your prior marriage be different
Talk about your retirement accounts -- both the ones that you
bring into the marriage, and the ones that you'll create after you're married.
The tendency will be to look at your individual
retirement account or 401(k) as being your own money since
it's coming from your paycheck. But that can easily cause misunderstandings, especially when you begin withdrawing from the account or consider who the
beneficiaries should be.
Some of these discussions will be very revealing. They'll show not just how you relate to money, but also how you see your blended family. Don't be afraid to disagree. You might argue a little -- or a lot. If the latter, so be it. It's better to know if you have truly irreconcilable financial differences before the
You'll need to find a balance. Keeping your finances too
separate can make it harder to become one with your mate. Most relationships,
especially marriages, work better when you share some common goals.
On the flip side, lumping everything together is much
tougher in a second marriage, particularly if you bring different resources and
responsibilities to the marriage.
A major decision will be which items will be considered household items and which personal ones. How you answer may provide insight
into how much of yourself you're willing to invest in the marriage.
You'll also need to decide if differences in income will
affect how much each of you contribute to the joint expenses. That will help
you discuss career issues and your standard of living.
Plan for a time in the future -- maybe again in six months or a year -- when
you'll revisit the issues. You might even want to take a weekend away from home
and the kids. It's
almost certain that you'll discover some things after you blend your families.
Knowing that you'll have a chance to discuss problems will keep them from
growing in significance.
Watch what you model for your children. They've already been
a part of one failed marriage. How you handle your finances this time will tell them a
lot about the health of your relationship and could affect their own perception
Finally, congrats on your upcoming marriage! May it be
See related: Finances in a second marriage, Mine, yours and ours: Marriage and your money, 7 ways to ensure a financially successful marriage
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