Second Marriage Money Matters

Starting over in love can be an exciting time. New beginnings however, bring new challenges and those challenges often relate to finance. People have different attitudes to money management and it’s important to work out what will suit you both.

Some common themes we see are:

Joint funds or separate – the debate is still out. Many couples prefer to keep their finances separate and set up an account for joint expenses that is contributed to on a regular basis. This way both parties can transfer a set amount into this account for shared bills.

Some couples choose to keep their funds separate but allocate who is responsible for what payments (ie one pays for electricity and gas and one pays for groceries and telephone). This can work well and ensures that bills are paid on time and not accidentally paid twice.

Dependant children and step children - kids complicate money matters. Expenses relating to dependant children are complex and this can be exacerbated by different attitudes, particularly if some are costing more than others. Communication is key. Talk to each other first on what your priorities are and then discuss how the expenses will be met. Inform the children of the new priorities “as a family unit” and have clear explanations on the circumstances and expectations (ie some children may remain in private schooling as its being paid for by a grandparent). Don’t be afraid to make big changes if your budget no longer supports your situation. Living beyond your means now will only cause relationship stress down the track. If you are serious about your new relationship lasting then you need to make tough decisions.

Purchasing Property – we suggest you seek legal advice on the structuring of property ownership. No, it’s not romantic to discuss an “exit plan” however a binding financial agreement can provide clarity and peace of mind for both of you. Property is an expensive asset and not easily divisible so you need to make smart decisions up front.

Building wealth – when couples re-partner they often feel like they have “missed the boat” on a decent financial future, however it’s never too late to start planning. By making this a priority you will have a greater chance of success. A skilled adviser will assist you to set realistic goals within your time frame, budget and comfort level.

Estate Planning – here is where things can get really complicated. We strongly encourage meeting with an estate planning specialist. A specialist will ask the right questions so you can fully consider your options and plan your estate in the most tax effective manner for all your beneficiaries.

We are creatures of habit so it can be common to make the same mistakes second time around. If you are not comfortable raising some of these issues then involve a professional (accountant, lawyer, financial planner) in the process to discuss your situation and help you both reach a suitable arrangement. Just like a good relationship, money matters also need attention and care.

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This information contained in this document has been provided as general advice only. The contents of this document have been prepared without taking account of your personal objectives, financial situation or needs. You should, before making any decision regarding any information, strategies or products mentioned in this document, consult with your GPS Wealth Ltd financial adviser to consider whether it is appropriate having regard to your own objectives, financial situation and needs.