The bottom line
Yours, mine or ours? And then what percentage of yours is mine or ours? The permutations are endless, as is the potential for money problems in a stepfamily. The key to money management is to work together, not letting it pull you apart. There is no sure-fire way of deciding how you are going to organise your finances. You have to work out what is right for you in the context of your new circumstances. 'It is an individual decision, both for the new family and for the two partners within it,' says Margaret Howden of Stepfamily Association of Victoria. 'New partners need to be aware of the impact of what has gone before', she says. 'Everyone brings their history of money, be it good or bad, with them to the relationship. And that has to be acknowledged and respected.' It is important for your new relationship that you are open about how you feel about money. A lot of new partners are still raw about what a divorce has cost them financially. Those feelings should be acknowledged and talked about. And be aware that your feelings will change as circumstances change. In the first flush of a new relationship you might want to pool your resources only later to decide that is not the way you want to live. Which is fine. But talk about it. Don't let it build a wall between the two of you. Problems lose some of their heat and potential for pain when discussed openly. Make sure that you and your partner take the time to work through the following checklist as early as possible.
- Do you have any debts that your partner is unaware of? Being responsible for your partner inheriting financial problems that they are unaware of can start things off on the wrong foot.
- Take stock of what money and assets you have as an individual. It is important to decide how much (if any) will become ‘mutual funds and assets'.
- Decide if you want to pool resources or keep separate accounts and then make sure you are both happy with this decision.
- Take time to talk over short term, medium and long term goals and put together a budget.
- Make sure you both have a legal Will.
- Decide what expenses you want to share and those you will manage separately. If you or your children have personal interests, decide who will pay for them?
- Be aware that you are liable for debts if you sign guarantees as co-borrower or guarantor.
- Take time, at least once, to see a financial expert together to talk about insurance, superannuation and investments.
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Preparing a budget
Regardless of how you decide to manage your finances, chances are your new family will have some financial goals. You might want to go on a family holiday, buy a house, get married, or have more children. All of these things cost money and while budgeting might not seem very romantic it can certainly help you achieve your goals faster.
When you consider that financial problems are one of the greatest causes for relationship failure, getting your finances in order early makes a lot of sense. Use the budget planner on the coming pages to help you work out how much you earn and what you spend it on.
Set some time aside to look at the budget planner together. Start by writing down all of your income and all of your expenses. You'll need to decide whether your budget will be a weekly, fortnightly or monthly guide. Some people like to match their budget to their pay period. Once you come to a decision, make sure all the numbers you write down are for the same period.
When you've worked out your combined income and expenses, you'll be able to see how much regular income you get and where that money goes over your chosen time period. Take away your total expenses from your total income to get your result.
TOTAL INCOME - TOTAL EXPENSES = ?
$__________ - $__________ = $__________
Your result will show whether you're spending more than you earn or if you have money left after your expenses to use for other things.
What do we do with our budget?
Is the result what you were expecting? If you're spending all of your income (or even more), your budget can show the areas where you might be able to change your spending habits. If you need to make a change you might like to sort your expenses into two groups: essentials and extras. Remember you both need to be happy with this budget, so make sure you can both live with the changes, there is no point having a budget that you won't stick to. If you have money left over, think about how that money could be used. Getting debt under control is important. Set some goals together, and then work out how your budget will help you reach them.
If you decide to keep your finances totally separate you may like to have separate budgets too. Just remember you will still need to make some decisions on who will pay for what and how you will use your budgets to reach your common goals.
If you would like some more help The Australian Government Financial Literacy Foundation website www.understandingmoney.gov.au has lots of great tips on ways to manage your money.
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Work out your regular income
| Type of income |
Amount received each period |
| Salary or wage (after tax) |
$_____________ |
| Pension or Government allowance |
$_____________ |
| Child support or other payments |
$_____________ |
| Regular interest from savings |
$_____________ |
Regular income from investments
(such as rent from an investment property,
distributions from a managed fund,
or dividends from shares) |
$_____________ |
| Other |
$_____________ |
| Total income |
$_____________ |
Expenses
Work out your regular expenses. Remember to use the same time frame that you chose for your income. Next, add up the subtotals to get your total expenses.
| Household expenses |
Education expenses |
| Rent |
$_____________ |
School fees |
$_____________ |
| Repairs |
$_____________ |
University or
TAFE fees |
$_____________ |
| Gas |
$_____________ |
Tuition |
$_____________ |
| Electricity |
$_____________ |
Books and uniforms |
$_____________ |
| Water |
$_____________ |
Camps/excursions |
$_____________ |
| Telephone/mobile |
$_____________ |
Sub total |
$_____________ |
| Rates |
$_____________ |
Debt repayments |
| Bpdu cpr[prate fees |
$_____________ |
Mortgage |
$_____________ |
| Internet |
$_____________ |
Car loan |
$_____________ |
| Cable/TV |
$_____________ |
HECS or
HELP payments |
$_____________ |
| Furniture |
$_____________ |
Credit cards |
$_____________ |
| Appliances |
$_____________ |
Personal loans |
$_____________ |
| Groceries |
$_____________ |
Store cards |
$_____________ |
| Gardening |
$_____________ |
Lay-bys |
$_____________ |
| Sub total |
$_____________ |
Sub total |
$_____________ |
| Transport expenses |
Savings |
| Car registration |
$_____________ |
Superannuation contrib. |
$_____________ |
| Parking |
$_____________ |
Regular savings |
$_____________ |
| Fuel |
$_____________ |
Regular investments |
$_____________ |
| Repairs/maintenance |
$_____________ |
Sub total |
$_____________ |
| Public transport |
$_____________ |
Other expenses |
| Sub total |
$_____________ |
Child care |
$_____________ |
| Medical expenses |
Child support payments |
$_____________ |
| Doctor |
$_____________ |
Gifts |
$_____________ |
| Medicines |
$_____________ |
Donations |
$_____________ |
| Dentist |
$_____________ |
Hobbies and sports |
$_____________ |
| Sub total |
$_____________ |
Subscriptions |
$_____________ |
| Insurance |
Newspapers & magazines |
$_____________ |
| Home and contents |
$_____________ |
Movies & DVDs |
$_____________ |
| Car |
$_____________ |
Restaurants & takeaway |
$_____________ |
| Health |
$_____________ |
Alcohol & cigarettes |
$_____________ |
| Income protection |
$_____________ |
Pet food |
$_____________ |
| Life |
$_____________ |
Other pet costs |
$_____________ |
| Sub total |
$_____________ |
______________ |
$_____________ |
|
______________ |
$_____________ |
|
______________ |
$_____________ |
|
______________ |
$_____________ |
|
______________ |
$_____________ |
|
Sub total |
$_____________ |
|
|
|
Total expenses |
$_____________ |
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Hardest call of all
There can be no subject more difficult to talk about than infidelity. Most people would like to simply ignore it. It's hard to imagine that it could happen to you, yet the statistics speak for themselves.
Denise Lacey, Manager of the Marriage and Relationship Education Unit at Centacare Melbourne, says talking about infidelity, and the possibility it could occur, could prevent it.
'Couples need to consider that it can happen to them. But they also need to know that open communication could prevent a potentially disastrous situation,' says Denise.
Denise suggests telling your partner if you are attracted to someone or uncomfortable with the way a situation is developing. Difficult to do but better than the alternative, she says.
Take for instance, Brad who found himself in a situation with a work colleague. Recently the office banter had taken on a new meaning. It was flattering but instinctively Brad knew he was in dangerous territory. In this kind of a situation, advises
Denise, Brad should avoid any extra contact with his colleague and he should talk about what was happening with his partner. It could be the discussion that saves his relationship. Infidelity, says Denise, is not simply restricted to the physical. Partners should be aware when they are over stepping the boundaries when it comes to sharing intimacies of their primary relationship.
'You have to watch out for the risk factors, be aware of them and talk about them. Don't let the poison of infidelity get into the system. Talking about the possibility of infidelity can be awkward but it is better than losing your family.'
TIPS
- Be aware infidelity could happen to you.
- If you are attracted to someone or if you find yourself in an uncomfortable situation, talk to your partner about it.
- Avoid any extra contact with the person concerned.
- Don't share intimate details of your relationship with other people.