New Strategies for Blended Family Finances

Illustration of a blended family and various symbols reflecting the complicated ways for which finances are accounted
Ian Murray

Tim and Lisa joyfully entered into remarriage, with Lisa's twin preschool daughters rounding out their new family. Lisa had sole custody of the girls. Tim and Lisa prepared a budget and were grateful that Lisa's ex-husband, Al, paid child support each month.

But Al became resentful. He reasoned: Tim earns more than I do and lives in a better home. Why should I pay each month to put food on his table? So he stopped paying court-ordered support. Lisa didn't want any problems with Al and worried he might contest her custodial status if she enforced his obligation, so she said and did nothing about the missed payments. Tim eventually discovered the missing income. He was upset that Lisa kept this matter from him, and he begrudged Al's perceived irresponsibility.

A new approach

Managing finances in a blended family is complicated because of the interconnected relationships and finances among various households. Some of the traditionally accepted advice for family finances may not work, and new strategies are often necessary.

Many Christian financial advisers will tell you to put family money into one pot and share. In first marriages, this may work well. But blended families are different — especially if either spouse is supporting two households. So it can be OK to set up "yours," "mine" and "ours" banking accounts.

Discuss each spouse's share of routine income to be deposited into the joint account and which expenses will be paid from that account. Spouses naturally will have different legacies from former marriages, such as support funds, life insurance proceeds, inheritances, and so on. Consider allocating these "former things" into separate "yours" and "mine" accounts.

An agreement that benefits all

Honor financial obligations with ex-spouses. Don't let your past adversely affect your family's present and future. If one spouse has debts to pay from a former marriage, it's less upsetting to pay these obligations from his or her separate account than burdening the entire family. Even so, use a team approach in managing money coming in from different purses and going out to different households. Manage all family finances in the sunshine — have no secrets.

What about Tim, Lisa and Al's dilemma? Tim and Lisa ultimately agreed that each support dollar from Al would go into a separate account used only for the twins' education. Al's contribution reduced how much money Tim and Lisa needed to set aside for this purpose, which allowed them to shift funds to other blended-family expenses. Al was pleased that nothing coming from his pocket would benefit anyone but his kids, and someday the twins would appreciate that their father provided directly for them.

Joseph Warren Kniskern is an attorney and the author of When the Vow Breaks: A survival and recovery guide for Christians facing divorce.

Estate Planning for Remarried Couples

Like most financial issues, estate planning is more complicated in blended families than it is in traditional ones. Some balancing of interests will be necessary as you seek to provide for children from your current and former marriage.

  • Plan ahead for passing along your assets. Make sure your retirement plans are updated and structured the way you need them to work, tailored specifically to your situation.
  • Don't let this vital planning take you by surprise. Map out how your financial resources will be allocated to each loved one, using living trusts (to avoid probate) and life insurance to address specific needs.

—JWK

If you or someone you know needs marital help, Focus on the Family has resources and counseling to assist. You can contact us Monday through Friday from 6 a.m. to 8 p.m. (Mountain time) at: 800-A-FAMILY (232-6459) or help@FocusOnTheFamily.com.

This article first appeared in the August/September 2017 issue of Focus on the Family magazine and was originally titled "Blended Finances: It's Complicated." If you enjoyed this article, read more like it in Focus on the Family's marriage and parenting magazine. Get this publication delivered to your home by subscribing to it for a gift of any amount.
© 2017 by Joseph Warren Kniskern. Used by permission.

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