Blended families are here to stay, and though we may not know what goes on in those families, often, things are tough, not just for the kids but for the parents too. There is a lot to deal with, especially when the parents come from different income brackets. Handling money will be tough the first few months or years, and you might have to rewrite the rules in your financial rule book. You’ll have to talk about and handle debts and financial obligations, and also reread the child support guidelines but, as they say, it all gets easier with time.
To help you smooth out issues, here are some of the most effective finance and financial management tips for blended families:
Be on the same page
For this to happen, you must be able to communicate. You may not agree on everything but talk and also talk to other people or families that have gone through what you are going through. So, while your individual families had different rules on finances, it is about time to create new rules that work for the new family. It may be a trial and error scenario, but with time, you will agree on allowances, smartphones, chores, and other financial issues.
Be consistent with the house rules
To make things easy for everyone, you need to set one family/ house rule and then stick to it consistently. For this to happen, you (the parents) have to be good examples. You need to be united from because you cannot make your house rules, especially the financial ones if one parent is strict and the other is soft.
Bring the co-parents into the loop and work well with them
Your child’s second birthparent might still want to be a part of the child’s life – allow it. But, be cautious and talk to them about your new house rules, as well as your financial position, if possible. This is important because if one home allows the child to have as many toys and video games as they want, but the other does not, it will be fair if your co-parent understands this.
If one parent is better off financially than the other (investments and properties) and the other is not as wealthy as the other, acting unfairly will breed animosity, especially with kids. Find a middle ground and a way to treat the kids fairly. The parent with more might have to help the other catch up with their savings, debts, and investments. Now, this brings us to the other contentious issue – writing contracts and prenuptial agreements. A prenuptial, as well as wills and power of attorney, are essential, and you need to talk about them early in the relationship. Besides finances, appoint guardians for your kids, as well as a power of attorney to an agent you trust.
Planning for taxation
Your family situation will make you eligible for some deductions and transfers, and you will lose others. The amount of tax credits and deductibles will also vary. To offset losses, use gains like medical expenses, and amounts spent on childcare, public transport, etc.
Track your finances
As you adjust to the new life, track all your expenses and net incomes and then decide on a budget that works for your family.