When we talk about budgeting, the last step we promote is to “review and adjust.” This is an important part of any budgeting process because as your priorities and circumstances in life change, the way you need to allocate and manage your money will likely change, as well.
One life change that will greatly impact not only your budget, but all aspects of your finances, is a change to the makeup of your family. This is the case whether you’re moving in with a partner, going through a divorce, or getting (re)married. Your finances will likely be even further impacted if you and/or your new partner or spouse have children from previous relationships.
To help you successfully merge finances when becoming a blended family, we’ve compiled some tips below and highlighted how banking with us can help you manage your changing finances.
Don’t Wait to Have “The Talk”
Money can be a touchy subject and one that some avoid discussing with their significant others. However, if you’re taking on large joint bills or planning to get married, it’s likely time to bite the bullet, have the tough conversations, and set up a plan for combining finances or managing shared responsibilities.
Before you can determine how to combine finances, you need to know exactly what each person is bringing to the table. It can be challenging, but having an honest conversation is the first step.
Having the money talk sooner rather than later can help you avoid confusion on who’s managing certain aspects of your finances and ensure you’re on the same page about financial plans and priorities.
If you need tips on where to begin, check out our three-part blog series “From Me to We” that helps you get started by walking you through important considerations and giving you concrete steps to take as you begin combining finances.
Determine What Accounts You’ll Use
Blending families doesn’t mean you have to blend all your financial accounts. There are benefits of having your own separate bank accounts, such as retaining individual money management skills, working toward individual financial goals, and maintaining a sense of independence and control over finances.
Whether you decide to go all in and combine all accounts, have some shared and some separate, or maintain totally separate accounts, it’s beneficial to choose one financial institution to work with. Even if you choose to continue having separate accounts, there will likely be times that you need to quickly move money back and forth, and it’s often easier to do this when your accounts are at the same place.
Create a Budget (and Involve Your Kids)
Most families have financial goals, such as buying a new car or sending the kids to college. To save enough money to achieve these goals, a family budget is crucial.
While their involvement can and should look different based on their age, it’s important to include your children in conversations about money. This can be especially important if they’re navigating living between multiple households.
It’ll be important to set expectations and be open about what they can expect when they’re spending time in your home as far as finances are concerned. For instance, will they earn an allowance or be expected to complete tasks around the house simply as a way to contribute? Will they need to get a part-time job to pay for extracurriculars like sports or have those expenses covered for them?
Once you’ve ironed out these details with your partner, get your whole family involved in budgeting. You don’t have to disclose information you’re uncomfortable sharing with your children, such as your salary or your monthly credit card payment, but it’s important to share general plans and priorities with your kids so everyone is on the same page.
Having open conversations with your kids about finances can be beneficial for their own money management skills in the long run, as well. If you demonstrate a positive money mindset and good financial management, they’ll likely learn from that and have a head start when they’re ready to be in charge of their own money.
We Make it Easy for Your Whole Family to Manage Money
As you prepare to combine families and decide how to manage your individual and merged finances, consider all that PSECU has to offer. We offer account options for everyone, from youth to college students to adults. And our suite of digital tools makes managing money easy, with free services like pay-a-person, bill payer, and mobile deposit.
Best of all, if one member of your household is a PSECU member, the others are eligible to join, as well, meaning everyone can take advantage of the many benefits of PSECU membership.
Get your family started on the right track today and apply for PSECU membership.