Outside the Box: How yours and mine becomes ours: Navigating finances in blended families

Managing the family finances is a leading cause of divorce. If nuclear families can’t get along when it comes to money, is it really a surprise that a blended family often has even more challenges? 

“The additional outside forces such as ex-spouses and the biases and heightened emotions brought into the relationship from prior failed relationships can make managing money in a blended family especially hard,” financial expert Mikel Van Cleve says. Van Cleve, currently a Ph.D. student at the Texas Tech University School of Financial Planning, focuses on how blended families manage money. He adds: “No decision is simple, especially when kids are involved.” 

I attended the most recent Financial Therapy Association Conference, where Van Cleve and a fellow Texas Tech University Ph.D. student, Ashley McWhorter Keamo presented their academic research on this topic. They emphasized that blended families can come in various forms — one spouse having kids from a prior relationship(s), both spouses having children from previous relationships, and possibly having a child(ren) together. Each form presents unique challenges. 

The National Survey of Remarried Couples found that 73% of remarried couples do not have a specific plan for money management, even though 66% have concerns over unpaid bills, debts, or settlements. This corresponds with what we hear time and again at Modern Husbands: couples don’t talk about money or they don’t know how, despite facing financial difficulties. 

The foundation of any successful financial plan is open communication. From the outset, it’s crucial for all parties involved to discuss their financial expectations, goals, and concerns. This includes transparency about income sources, debts and any pre-existing financial commitments. 

This is particularly important for blended families, Van Cleve says, because “The more people, generally, the more complicated — and the more emotions to muddy the waters and financial harmony of the family.”

One successful approach for managing money in a blended family is a “bucket” approach. Perhaps one bucket is a joint account for managing household expenses, while each partner has a separate bucket for expenses such as past debts, previous financial obligations and child-related expenses. 

Brian Page is co-host of the Modern Husbands Podcast and founder of Modern Husbands, which helps couples manage money and the home and offers “Money Marriage U,” online courses that provide financial therapy and financial planning lessons. 

Modern Husbands is hosting a virtual discussion for subscribers on Nov. 7 with Mikel Van Cleve and Financial Therapy Association President Ed Coambs. Click here to subscribe to the event. 

More: Money management 101 for couples: This ‘CFO’ and ‘COO’ strategy really works