Taking the plunge and saying, “I Do” for the second time is a scary thought for many people. One of the leading causes of divorce is money, so it’s only natural to dread the financial aspect of your second marriage. Fortunately, for those contemplating wedded bliss, there are some things you can do to ensure smooth financial bliss with your new partner.
1. Keep your separate checking accounts
Joint accounts allow independence and a safety net. If you’ve been single for a while, keeping your separate account will help you maintain a part of yourself that you might not be ready to give up yet.
2. Keep a joint account for shared expenses
Shared expenses are those that involve household bills. Mortgage payments, utilities and other shared expenses should be paid from the joint account. Both partners should contribute to the balance of the joint account.
3. Don’t separate your bills
Having separate bills is a recipe for disaster. If you take the water and your spouse takes the electricity, you’ll soon be arguing over the size of the bills and how much each of you used. Instead, pay joint bills from a joint account.
4. Set up spending rules
Determine a threshold at which purchases must be discussed with the other spouse. You don’t want to always be asking for permission to spend money, but for large purchases the other person should be consulted to avoid revenge purchases and hurt feelings.
5. Talk about gift giving
Decide early on who you will be giving gifts to and what the budget is for each of them. You don’t want to end up arguing at Christmas because your partner spent 10 times more on his parents than you did on yours.
6. Plan for the long term
It’s important to discuss where each of you would like to be financially in 5 or 10 years. Discuss your plans, your desires and how you can get there. If you each have different plans, you’ll need to have a discussion to decide which direction to go in.
7. Account for differences in income
It’s unlikely that you and your spouse will earn the same amount, so you need to discuss how contributions to the joint account will be made. Will you each contribute the same amount regardless of income or will the partner earning more contribute more.
8. Blend your money styles
Some people make meticulous notes in their checkbook ledger and keep track of every penny they spend. Others rely on their monthly credit card statement to show their financial damage. Whatever your style is, it’s important your partner knows and is comfortable with the way you do business.
9. Discuss your debts
Talking about your debt is difficult, but the key to a solid financial foundation is understanding what types of debts and payments each person brings in to the marriage. Don’t forget about child support, alimony and other debts you may incur as a result of divorce.
10. Be prepared to compromise
It’s unlikely that everything you want to happen will happen, so be ready and willing to compromise with your partner. You didn’t marry them for their paycheck, so don’t let money come between you and your happiness.
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