Narelle has two young children from her first marriage. She has recently moved in with Tim, who also has two kids. Creating a new life together in their forties, they are doing an amazing job navigating all the ups and downs of living as a blended family.

But they never discuss their finances.

Narelle has no idea about Tim’s income or debt situation. While cash flow, assets and liabilities are not easy topics for any new relationship, not knowing each other’s financial position leads to feelings of fear and uncertainty. It can be really scary.

As a blended family of six, they rent a four-bedroom home and have relatively high living expenses. While both partners have brought physical items (such as furniture, bikes and cars) to the relationship, neither knows whether the other has financial commitments, debilitating debt or anything about their saving and money-management history.

So why haven’t they talked about money?

Narelle is fearful that Tim will think she ‘wants his money’. On the other hand, she is aware that sometimes women inherit their partner’s debt and become responsible for repayment, or covering a large portion of their combined expenses because their partner is paying off their commitment. She doesn’t know where she stands, and this makes her uncomfortable, but she also doesn’t want Tim to think she doesn’t trust him.

Not talking about money is risky. Lack of awareness and understanding can put either partner at risk of financial instability. It’s important for both parties to know the other’s financial situation, share a vision for where they want to be in five, ten or fifteen years’ time, and understand how their finances will come in to play to help them achieve these shared goals.

Money discussions are vitally important.

Yes, they are uncomfortable. Yes, it is really hard to do. But having open conversations and creating the right financial structure will go a long way to preventing potential mistakes and problems down the track.

In The Joyful Frugalista, Serena Bird discusses how effective it is to openly manage joint finances. ‘One of the key areas for disagreements in a relationship is around how money is spent.’ While she agrees that the separate/joint bank account argument is highly personal, the believes that sharing a joint account helps couples ‘work towards joint financial goals and have similar financial values’.

The secret is to maintain clarity and visibility about money management and goals.

When it comes to spending money, perception can be skewed, which can lead to frustration and confusion between partners. According to blogger Kirsti McQueen from iheartsimpleliving.com, ‘in any relationship, one party is better at managing finances’. This will work, ‘so long as the other party knows where to find key financial information’ and communication remains open. Financial apps such as Splitwise can help couples manage money with transparency, keeping them focussed and on the same page.

Share responsibility, be accountable and take an active approach in managing financial affairs.

When families blend, both partners will have their own bank accounts, income and investments. But when they come together, it’s important that these are discussed, and that the couple create one clear, shared vision. For example, if they want to buy a house together, they will need to plan how they will reach that point, what the costs will entail and how much each partner will contribute. When it comes to providing for children, sharing information honestly is fundamental to maintain open communication.

There is very little room for error. As soon as one partner hides something, problems will arise, both financially and emotionally.

Speaking to a financial advisor is a great way to outsource risk and manage difficult conversations about money. A good, understanding financial advisor will discuss all aspects and options with both parties, and is able to help navigate any uncomfortable feelings by sensitively guiding the conversation.

If you’re in a new relationship, or moving in together, now’s the time to address your financial situation. Contact TruWealth on 03 8648 6534 or email contact@truwealthadvice.com.au