There is no specific formula or playbook for handling money with your spouse. Is it any different with a second marriage? Kelli Smith, director of financial planning with Edelman Financial Engines, joined Cheddar News to discuss what approach to take with finances with a new partner.

<div class="block">There is no specific formula or playbook for handling money with your spouse. Is it any different with a second marriage? Kelli Smith, director of financial planning with Edelman Financial Engines, joined Cheddar News to discuss what approach to take with finances with a new partner.</div>

Stretching Your Dollar

Stretching Your Dollar: How to Deal With Finances in a Second Marriage

Are you one of the many people currently watching The Golden Bachelor? This show, stop looking for the woman that you can live with. I'm falling in love with you, Gary. I'm in the same place and start looking for the woman that you just can't live without. I am so excited. I'm like, yes, yes. Yes. It follows 72 year old Jerry Turner looking for love after his wife passed away. But it brought up some really important questions. How do you deal with your finances in a second marriage? So to help us understand is the Director of Financial Planning from Edelman Financial Engines, Kelly Smith. Kelly. This is a great topic here. What's something that people might misunderstand about finances and a second marriage? Yeah. Well, thank you for having me. Um, sometimes people think there's a one size fits all approach to how you handle uh money in your marriage and there's not what's good for, you might be good for, not be good for somebody else. Um, so you just really want to concentrate on, um, talking through your values, talking through what's important to you, um, and aligning those things and that will give you the opportunity to really flush out what's best for you. When is a good time to bring up those finances with your new potential partner to make sure that you are on the same page. Yeah, I think this is a little different for everybody. Um, for those people who really get into their finances and are very protective of it. Um, have very specific ideas. You probably want to have that conversation a little bit sooner. Um, you don't want any surprises, months or years down the road of somebody that you're dating and you don't really see eye to eye on things and that could be how you take care of, um, kids, how you feel about paying for college, um, boomerang kids, especially, um, your long term retirement goals. And that depends on your, your stage of life as well. Um If you are a little bit further into your retirement, your conversation might have to have to happen really soon. Um, because you don't have a lot of time, uh, to, to go through the dating process over and over. Um, so highly, highly, highly personal. Yes. Ok. So if you are getting ready for that second marriage, when's the best time to actually start putting pen to paper and planning these things out. So if you decide that you want to have that conversation early, um, you kind of have to write everything out. What are your assets? Um, what are all of your different accounts. I would also write down what your values and what your goals are. Um, you really want that transparency and that honesty out front. Um, a prenup can be helpful but we haven't gotten there yet. We need to make sure that we understand what each of us is bringing to the table. Um, what money comes in the door, what money goes out the door and how we might handle that. How do kids factor in? Does the conversation change at all? If there are kids involved? I think the conversation changes, especially when you have kids. Um, remarrying in your forties, um, might be a very different conversation than remarrying in your seventies. Um, there's a couple of movies out there that you can think of where they're blending families, um, and the challenges that you might have, and again, it goes down to what you're bringing to the table if one spouse can afford to put their kids through college. But the can't, you should be having those conversations if you have kids that are out of college and maybe they have their own families. What kind of legacy planning are you doing? What do you intend to leave? Um, and is there some sort of an equitable thing that you want to do to each of your families? Um, so it really depends on the age of your kids. Do you find that prenups are common in second marriages? Uh, I haven't seen a whole lot of prenups in, in what I do. Uh, I think there, sometimes a prenup can really leave a bad taste and maybe a little bit of resentment early, early on in, in a relationship. Um, but if you do a prenup, it can be good to, um, preserve maybe a business. So if you, if you are running a business together, if there's a family business, just making sure that there's an understanding at the very beginning um of, of where things will go if something were to happen to, to the follow up marriage. Um But again, if you, if you trust your spouse, um most of the time they're not needed things that come into the marriage of premarital debt, premarital assets, those things can still be protected. So it's really about what you are preserving while you're married and the growth of that. How do you manage a situation when a partner comes into a marriage with a lot of debt? Again, it's premarital debt. So understanding what they have. Um And there's a couple of things here. How are you going to help them if at all work their way through debt? Um Also how does that debt impact their ability to contribute to the relationship? And in your long term growth, there are retirement cost money. So we have to make sure that we're planning for equitably fairly whatever word you want to use to be able to still meet those lifestyle expenses is that we have built together because if you find some time down the road, the debt does not allow one partner to contribute fairly. What does that do to your lifestyle? So you want to make sure you've talked through all those things and have a plan for them before you go into that marriage. Ok. So divvying up monthly expenses, rent, utilities and mortgage, maybe. What's the best way to approach that again, it will be different for everybody. Um I think there's a fairness to it. It's not necessarily split evenly. Um But it has to be fair and based on what you're bringing into the equation. Um Some folks like to do even second marriages, they'll do their planning separately. So here's what I'm contributing to the relationship on either side. The challenge that you run into with that is you have to also, if for some reason this follow up marriage doesn't work, you have to be able to be financially secure on your own. So we're not just planning for one person. We are planning for two. All right, Kelly Smith. Thank you so much for joining and sharing your expertise.