3 Steps to Creating Your Blended Family’s Unified Financial Vision

As we learned in our last post, blending your family can leave you feeling pulled in many directions and adrift in your financial life. After all, making a blended family work is difficult enough without worrying about blending your finances, too. And if you’re like most people, talking about money is downright awkward. After all, money is very personal.

So, take a deep breath and find a little courage because the steps to creating your unified vision require open and honest communication — both with yourself and with your spouse. The effort is worth it, though. This process will help you move forward together and give you a positive framework to guide your money decisions into the future.

Depending on where you are in your relationship and your financial journey, you could jump right in together.  Or, you may want to go through these steps on your own first, which may help you gain perspective that could be useful when discussing it later with your partner. Either way, it is critical that you eventually work through this together. 

To create a unified financial vision for your blended family, follow these steps:

Step 1 – Explore Your Money History and Values

Before you can truly come together to plan your family’s financial future, you need to understand your own money beliefs. Whether we realize it or not, our values, experiences, and beliefs influence our relationship with money, and this can either hold us back or propel us forward. Specifically, you should seek to understand your answers to the following questions: 

1. What is your money history? You want to understand better and be able to communicate your experience with money. Some questions to consider are: What was money like for you growing up? If you were previously married, what is your money story from that relationship? How have these stories shaped the way you make decisions about your finances today? 

2. What are your money values? Here, you want to examine your belief system around money. Some common money values and concepts to consider are your beliefs around savings, investing, debt, giving to charity, and tithing. For blended families, you should also consider how you feel about merging accounts and providing for children. For example, when it comes to providing for children, do you believe they should make their own way, or do you prefer to use your money to give them every possible advantage? Then, ask yourself how you are currently carrying out each value.

3. Reflect. Once you understand your personal money history and values, it is time to sit with your spouse and discuss them together. This is a critical step in helping you later decide how to build and achieve your unified vision. When it comes to money values, have an open mind and heart. You should also start with the values where you have common ground. But you mustn't avoid discussing the differences. In fact, you should work towards finding a way to close those gaps.

Step 2 - Assess Where You Are Today

Once you have a sense of each other’s money histories and values, it is time to ask yourself, “Are we using money in a way that gets us our best life possible and aligns with our values and beliefs?” This step involves looking at what influences your financial life and how well they align with the values discovered earlier. For example, how would you rate where you live? Does it suit your family's needs? Is it affordable? You could also assess your career and how you use your leisure time. We call this step finding your Return on Life (ROL), as opposed to your Return on Investment (ROI), and use a tool called the ROL Index from ROL Advisors.

You’ve made it through arguably the toughest and most rewarding steps toward blending your finances and making a blended family work. You now have a solid foundation from which to envision your future together.

Step 3 - Envision Your Future

Now that you understand where you are and how you got there, you can start looking toward the future together. This is where you start to envision what you want your life to look like – in both the short and long term. At this stage, you are better positioned to start developing real goals for your blended family and make decisions about how you will handle your finances moving forward. Here are a few things you’ll want to consider:

1. Is there anything in your current situation that you need to address moving forward? In your money values discussion earlier, you may have discussed your beliefs and comfort level with debt. This could be something that you want to make sure to address in your plan. What do you want your family’s debt situation to look like in 3-5 years, and why? 

2. Depending on the age of your children, you may consider inviting them to give input on parts of your family’s future. Of course, you probably don’t want to give them the ultimate say on big-ticket items, but rather aim to give them a sense of belonging. 

For example, when my wife, Cara, and I were preparing to get married, part of our conversation revolved around where we would live. We covered everything from staying in or leaving our current school district to how much space we would need — both now and in the near future as kids headed off to college. After finding a few homes that could work for our budget and location, we brought our kids along to look at some of them. This gave them a sense of input and belonging and gave us a perspective we may have otherwise missed. After all, these decisions are only partially financial decisions; they should also help blend the relationships when possible.

Once you have created your unified vision, you can start taking stock of your financial numbers and do the planning required to bring your vision of making a blended family work to life. Consider working with a financial planner who understands the unique circumstances your blended family faces. If you have a blended family and want help creating your family’s unified vision and a plan to make it happen, schedule a complimentary introductory call today.

Based in St. Paul, MN, Endurance Financial Group is an Independent Registered Investment Advisor partnering with blended families to combine their household finances in a unified financial plan that works for all members of the family. They can be reached by phone at 651-605-2318 or online at efg-planning.com.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.