Blending Love & Money
I’ve been married three times, and I haven’t had two husbands who’ve dealt with money the same way. It seems with every re-union, there are a whole new set of habits and preferences to learn about, and a ton of negotiating to do. It’s not a job for one sitting.
Yours, mine and ours: There’s no one right way to handle money in a re-marriage, but since you can’t escape responsibility for your partner’s decisions, you better talk about it. Some couples maintain separate savings and checking accounts, paying for their own personal and children’s expenses and sharing the costs of running the household. While they may still quibble over shopping habits, keeping some money separate leaves each partner free to indulge.
Who gets to decide: Couples have always struggled with how to save and spend their money. For the newly remarried this can be further complicated by their histories, particularly if spousal and child support are issues. To create a realistic picture of your financial state, keep tabs on where your money comes from and where it goes for about six months. Then you can make some decisions about how much each of you will contribute to the household, and how much discussion is appropriate (and who will prevail) when purchases are made.
Who we are with money: By the time we get to husband number two or three (or four), most of us have clearly defined money personalities that affect our decisions about education, housing, clothing, vacations, medical and dental services, investments, and gift giving. Financial responsibilities are also a big part of this discussion. While many a newly wed may know that her spouse has financial obligations to another family (a previous spouse, a mother, or Great Aunt Lucy), living with the reality is often very different from the intellectual acceptance of that responsibility.
Where credit is due: While each of us may have a different money management style, understanding which styles are no longer appropriate in a new family is critical. If you’ve always chased the blues with a shopping spree, you may have to take up kick-boxing. You’ll also have to get a grip on the impact of past decisions on your new family. One that’s often overlooked is the fact that divorce financial settlements are not binding on creditors. If you and your former spouse continue to have both of your names on a loan or account, you are at risk for each other’s financial behavior. That means the new family is also at risk. So take an inventory of your financial obligations.
Home safe home: Put more kids and more stuff under the same roof and you’ll probably want to take a look at your insurance. From home insurance to car insurance — adding teenage will be expensive so brace yourself — you need to do a full review. And if your divorce agreement assigns your former spouse as the irrevocable beneficiary on your life insurance to cover support responsibilities, it may be time to start shopping for new life insurance too.
Who gets what? You’re also going to have to deal with how your property will be distributed after death according to the law, the needs of your new family and prior agreements. Remarriage makes a will more important than ever. Biological or adopted children of first and remarriages are treated the same. While that may appear fair at first glance, when you consider the fact the first group is through college and the second set are only in elementary school, the picture changes. Most children expect money and property to follow a bloodline, not a wedding band. If you have a good relationship with your adult children, make time to talk over their concerns and expectations. And make sure you’ve clearly identified your position to your new spouse so there’s no misunderstanding about promises made.
Over time, the issues relative to merging your loves and your money will evolve. The issues you have to deal with initially will be very different than those that arise if you start having children together. Some of the things you should talk about may take some time to get to. And you may never be joined at the hip financially. But as long as you keep talking, keep sharing information and keep listening, you should be fine.
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September 4th, 2008 at 2:38 pm
A little off topic I know….but I am so excited to have taken advantage of the “Scanning Code of Practice” this morning at my local grocery store. I knew that the shelf price of those Pizza Pockets said 6.99. So, when they scanned in at 7.99…..Woo Hoo…it was time to get em for free. Thanks Gail for the heads up on that one, as per your previous blog!!! Keep up the fantastic work with your informative and inspirational daily blogs!! Love em
September 5th, 2008 at 8:43 am
I love this post. I have been with my husband for many years (both our first marriage, but still lots to figure out), and so much of this rings bells from early on. I’m going to pass it on to my brother who gets married in a month. I think he and his bride could really benefit from this as they start to merge their lives and consequently, their finances. (I’ve already recommended they watch the show to avoid pitfalls early on!)
September 5th, 2008 at 8:59 am
I love the comment “you can’t escape responsibility for your partner’s decisions” I read a great book some time ago call “All your Worth” and one of the comments it made was about how despite people’s decisions to keep their money separate, is one partner going to eat steak at retirement while the other eats kraft dinner (or at least in the immortal words of the Barenaked Ladies, you’d eat it more of it if you had the million dollars). I guess I am fortunate (all though a lot of communication has more to do with it) that I have a spouse that has very similar goals for our retirement, our savings and spending habits and our desire to even plan our debt.
September 6th, 2008 at 12:18 pm
Thank you Gail so much for writing this blog.
I totally recommend to anyone thinking about tying the knot, to seriously consider a PRE-NUPTIAL AGREEMENT. All of that stuff that you mentioned in the article can then get put out openly on the table and talked out, decided on, and made legally binding BEFORE you get married.
A pre-nup was one of the best choices I had ever made going into marriage, which required blending 2 children with completely different needs from 2 separate, previous relationships, and 2 completely different financial realities. It provided a lot of clarity about who was responsible for which child and how, as well as that clarity that each partner was personally responsible for their own debts and assets coming into the new relationship.
I had also made the shrewd choice as a woman (still recovering financially from the first relationship) to simply NOT create any joint financial obligations with my current spouse. To revise an old poem for the 21st century woman: “Don’t shake hands behind the garden gate; love is blind, but the creditors ain’t”. LOL
When the marriage went belly up a year later (when it finally, fully dawned on buddy that it really WASN’T a free ride and he really did have to haul his fair share), the pre-nup made the whole divorce process very, very simple. No financial arguments over what was mine and what was his; no joint accounts to close; no screwed up credit ratings over delayed obligations to joint creditors; and best of all, no child support payments required to a step child I didn’t even live with anymore (a nasty little reality for many second time round divorcees).
It was so simple in fact, that I just attached a copy of the pre-nup to the divorce papers and I filed them MYSELF with out needing a lawyer at all. All that was left to deal with then was the emotional turmoil which was hard enough.
Pre-nups are like wills that way. They take care of the practical so that one is only left to deal with the emotional in the event of a tragedy.
I feel so strongly about pre-nups today, that I think that anyone who doesn’t have the maturity to discuss and make decisions about their new family and money openly and in front of a lawyer, are frankly not mature enough to get married in the first place! I say good luck with that immature relationship getting those first 15 years when 60% of all the divorces in Canada occur, in an immature relationship.
Continuing the pragmatic and unromantic train of thought here, considering the overall divorce rate in Canada is around 37% (a whopping 47.6% in Quebec), that’s not a stat I’d personally want to bet my bank account or retirement savings on, without some serious discussion, and a legally binding contract more comprehensive then the marriage licence.
Post-nups are also possible, as are co-habitation agreements (for a rising percentage of Canadian couples not planning on tying the knot before shacking up in the first place). And let’s not forget the reality of co-joining income tax returns, either legally married or just spousal by Rev. Can.’s definition. So while you’re in the market of deciding mine, yours and ours, home safe home etc., take a look at your future spouse’s last Notice of Assessment while you’re at it, and seriously ask yourself if you really want to be messed up with all that. (Side note: BTW-there are seriously WAY more Rev. Can. benefits and perks for “single with eligible dependent” then there are for “married with kids”.)
Personally, I’m just really happy that I’m single today!! Life is so much simpler this way! LOL
September 8th, 2008 at 4:20 pm
(knock on wood) my husband is my only one ever and celebrating it’s 14th anniversary in a couple days. My husband is a great enrichment to my life - I was smart enough to marry the “good man” instead of the “passionate man” and it has made all the difference.
None of my close friends have had to go on the road to divorce either (though maybe a few would be happier if they got rid of some dead-weight! LOL) Some have come a hair’s breadth to getting out and money is usually the final thing that makes it too risky to quit…. and usually what makes the biggest fuss in the first place (on top of the lack of help with the home and kids of course).
I am not immune to the effects as both my parents had multiple marriages (and step siblings came with it). It gets complicated SO quickly!
When my dad died, it was a bloodbath over the estate. So messy and petty with too many people scrambling for a share. In the end the current wife proved the will she had was escape-proof and as a result she got it all to herself and his own children (me and my sis) got left absolutely nothing but a boot out the door — even as 17 and 18 year old kids (I hear the law has changed on that and now kids can’t be left out)! I am sad that it happened that way, but the loss of dad in the first place was a much bigger blow than a few bucks. Sis and I pulled through entirely on our own merits and strengths and we probably became stronger adults for it, who knows!
Marriage, Divorce, Death, Money… all serious stuff!
September 18th, 2008 at 2:26 pm
Oops - sorry - meant to post it in “Gift Cards” comments.