Adhering to sound money management principles requires substantial discipline for most individuals. So imagine the amount of patience and persistence it took to implement these ideals in a blended family. That was a hurdle Conyers, Georgia, couple Keesha Gipson Monroe and Julia Hamilton faced–and successfully crossed–when they combined their households in July 2010.
“It was a difficult experience; we had to compromise and let go of our past beliefs. We had to change some destructive spending habits and make budgeting and saving a priority,†admits Gipson Monroe, a 33-year-old program director at a youth arts foundation in metro Atlanta. She has a 9-year-old son, Joseph, and a 3-year-old daughter, Kaia-Simone.
Her partner, Hamilton, 35, has a 12-year-old daughter, Semaya. The families moved in together when they relocated about 25 miles east of Atlanta to Conyers from Plainfield, New Jersey. Gipson Monroe and Hamilton plan to have a commitment ceremony in September in a state that grants same-sex marriage licenses. Under Georgia law, same-sex couples are not entitled to all of the legal rights and benefits–such as filing joint tax returns and Social Security survivor benefits–given to married heterosexual couples.
Regardless of their marital status, the couple is committed to merging their finances and following a strict budget, which accounts for all aspects of their spending and saving.
Even though Gipson Monroe always deposited money into her savings account and planned for long-term goals, her ex-girlfriend had a lucrative career and often doled out money to her and her son. She
admits that frivolous spending was one of the “destructive†money habits she had to eliminate. Now, thanks to Hamilton, she keeps track of what she spends and encourages her son to do the same. “I learned the importance of a budget and healthy spending habits, discipline, and paying attention to every dime that is spent. That is the only way I can maximize the money that I earn and save,†Gipson Monroe says.Hamilton helped Gipson Monroe become a more conscientious spender. But Gipson Monroe, who was raised with an entrepreneurial father who stressed the importance of paying yourself first, helped Hamilton learn to set aside money for savings before paying bills. This was a foreign concept for Hamilton. “It was hard because I felt selfish. I couldn’t see how it would work, but it works.†Hamilton is an executive producer at an Atlanta-based multimedia production company. She also oversees Gipson Monroe’s theater company, M.PoWeR Performing Arts.
Although there was an initial learning curve, the family’s new attitude toward money management is in full effect. The couple has a combined annual salary of $65,000 and each deposits $250 a month into their joint savings account. They currently have squirreled away more than $6,000, which will be used as an emergency fund to keep the family afloat if either of them becomes unemployed.
Gipson Monroe admits that it wasn’t easy for the family to adjust to the new financial habits, especially for Joseph. “But we learned that just because you have a budget doesn’t mean you have to struggle,†Gipson Monroe says, adding that as a family they read books such as Robert T. Kiyosaki and Sharon L. Lechter’s Rich Dad Poor Dad series and Suze Orman’s The Money Class. They review their budget daily as a family and post a spreadsheet of their weekly expenses on the refrigerator. A monthly budget is hung in the parents’ bedroom.
To help their children become more familiar with budgeting, Hamilton and Gipson Monroe have set them up on an allowance system. Joseph and Semaya each receive an allowance of up to $20 a week if they complete the household chores listed on their allowance chart. The children can also earn money if they complete book reports or write essays on educational movies. The incentives have motivated the youngsters to save up for items they want to purchase such as video games and other leisure activities.
But they don’t just spend their allowance on fun activities; a percentage of it and any monetary gifts they receive is placed into a piggy bank and then later deposited into their individual savings accounts. Gipson Monroe opened a savings account for Joseph when he was 5 and so far he has $775 saved. Semaya, who has had a savings account since she was 7, has stored away $1,242. Semaya plans to spend the summer in Korea when she’s 16 in 2015. To prepare for the trip, which is estimated to cost $14,000, Hamilton and Gipson Monroe opened a separate account for her in December 2010, where she has saved $1,500. The mothers have agreed to match the money that Semaya saves and raises.
“Semaya is saving and planning her first fundraiser, which will be the selling of handmade greeting cards that she has designed. She is also actively learning the language and culture,†Gipson Monroe says.
The couple have taken financial lessons a step further by transforming ordinary shopping trips into fun learning experiences for Semaya and Joseph. One child keeps a running calculation of what is spent and is responsible for checking items off the list while the other is responsible for finding the best value, Gipson Monroe explains.
“It becomes a game and an open discussion. At first a simple shopping trip would take hours as the kids learned to read packaging, compare prices, and follow a list and budget, but as time moved on they became quicker and more confident,†she explains. “The goal is to always return home spending less than we planned. When the kids do so successfully, they get to split the savings and add it to their personal savings account.â€
How Hamilton & Gipson Monroe did it:
Be completely honest about your finances.
“Set goals, and most importantly, make budgeting and dealing with your finances something you do together. It should not fall on the shoulders of just one person,†Gipson Monroe says. It’s important to help each other stay accountable to the goals that have been set and compromise when necessary. Her motto: “Plan. Budget. Save.â€
Include your children in the household budgeting process.
Gipson Monroe and Hamilton believe children must understand money in order to have a healthy relationship with it. They advise having a certain amount of financial disclosure with your children so they aren’t shocked if there’s a sudden shift in the household income. Allow them to sit in on family meetings where financial goals are set, and help them to budget their money. “We never tell our children they can’t have something because we can’t afford it. Instead, we assist them in figuring out if the item fits into their budget. If it does not, then we work with them on a plan to purchase what they want,†Gipson Monroe explains. This process helps children gain a better understanding of where they are spending their individual money and how the overall household is spending money.
Help your children save for their goals.
No matter the dollar amount associated with the goal your child has, it’s important to do plenty of research and keep your child engaged in the process. “Have more than one option to make sure your child understands and commits to the sacrifices that may need to be made,†Gipson Monroe advises. If your child’s goal will cost a significant amount of money, start a savings fund specifically for that goal and work with your child on planning fundraising events and identifying other means of funding to reach the target amount of money.