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Remarrying poses financial complications

Marilyn and Ron


Profile: Marilyn and Ron of Brookville, Ohio.

The problem: Newlyweds Ron and Marilyn wish to coordinate their goals and manage debt.

The plan: The newlyweds need to pay off debt while saving money to meet different goals.
Blending the finances of couples in their first marriages is challenging enough. Second marriages can be even more complex. "I feel very disorganized in my money management," Marilyn told Bankrate when she applied for a Money Makeover.

Besides organization, the couple needs liquidity. Marilyn and Ron should establish a rainy day fund that they can tap in emergencies. Without it, they will resort to using credit cards, something they've done in the past. To break this cycle, they need to focus on paying off debt while simultaneously saving money.

Estate planning should be another priority for couples entering into a second marriage, particularly when children from previous marriages are involved. The reason: If something should happen to either or both of them, they will want to make sure that the needs of their respective children will be taken care of. To that end, they should begin to think about selecting guardians who would care for their children until they reach adulthood.

Also, they should get adequate life insurance to support their spouse's or children's needs in the event of an unforeseen death. Likewise, should a tragedy occur during life that results in disability, Marilyn and Ron should have disability insurance to protect their family against income loss.

The newly formed family faces other issues, including decisions on whether to sell or rent the extra house with an outstanding second mortgage; how to prioritize outstanding credit card and student loan debts, and whether they can retire early and save for their children's educations.

Key issues:
  • Combine and organize mutual finances
  • Analyze insurance needs
  • Get estate planning documents in order
  • Beef up emergency fund
  • Pay off credit card, student loan debts
  • Determine whether to sell or rent second house
  • Estimate future retirement income


This report was prepared by Certified Financial Planner Doug Kinsey, a partner at Artifex Financial Group in Dayton, Ohio.

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