big happy family: blended families and budgeting

For two years, I was a single mum. I dated and met *Michael who has been in long-term relationships but never married and has no children. Today we are a happily married    insta-family of four. We are what you call a blended, step or bonus-family.

One of the discussions we had to have, before getting married was around our money. As a divorcee there are some aspects of my past that I could not really divorce myself from, such as credit card or divorce lawyer debt, maintenance and parental responsibilities.

While working out the dynamics of our new family, Michael and I had to make sure our budget was in balance.

 “A budget tells your money where it goes instead of wondering where it went.” John Maxwell

A budget helped us understand what money was coming in and what money was going out. We applied the following principles when we drew up our blended budget.

Honesty

Michael and I had to be completely honest about our financial obligations, even if it was debt. We needed to know who we owed and how much, in order to work out what our expenses were. Although Michael didn’t have kids or wasn’t married before, he had accumulated a lot of student debt. I on the other hand was still paying off my divorce lawyer and some credit card debt.

Goals

We had a chat about our ‘together goals’ and our individual goals. We both want a bigger house and a nice reliable family car. Our goal is also to go on a family vacation at least once a year with the kids and another vacation without the kiddos. Michael also has personal goals to master his drumming skills by going to music school. I, on the other hand, want to go on a health retreat with my mum.

Allowances

For most of us, we give our kids an allowance, but adults also require an allowance. We decided to allocate a portion of our income to both of us, to spend as we wish. If you don’t use the allowance, you can carry this over to the next month. At the moment we cannot afford to have individual allowances per month. So, we take turns – one month me – one month him.

Maintenance

A year after I got married to Michael, my ex-spouse cut his maintenance contribution towards my son, in half. He had received a salary cut due to the pandemic from his employer. This meant that Michael and I had to fill in the difference. This one was tricky; our budget was already stretched.  I started a side hustle, selling health products so that this would not affect our budget too much.

Residence

Before our wedding, Michael and I bought a 2-bedroom flat for our family of three.  A few weeks after our honeymoon I found out we were pregnant. This meant that we required a bigger home sooner than we thought. We sold our flat, reduced our luxuries and started saving towards a deposit for a bigger house – which we will be moving into in two months, so we are super excited.

Joint costs & separate bills

Hubby and I decided to keep most of our personal expenses separate such as our car payments, store accounts and debt. We decided that we would share joint expenses such as the bond, water and lights, groceries, entertainment and insurance as percentages according to our income. This would mean that Michael would pay 70% of our joint expenses, as he earned more, and I would contribute the balance of 30%.

Life policy, Pension, funeral cover & will

Now that we were married we had to update the beneficiaries on our policies to include each other, my son and our baby girl. We also updated our individual wills. A will ensures that your assets will be distributed according to your wishes and that the people you love will benefit.

Remember that your plans and budget are not set in stone and need to be revisited often to see that you are on track with your goals. In this way your fairytale can continue.

If you need help with your financial planning, an Old Mutual Financial Adviser can assist you. Contact one of their trusted financial advisers by clicking HERE or call 0860 60 60 60. 

*Michael is not his real name.

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