Managing family finances can put a significant strain on a marriage and is often cited as a leading cause of divorce. But what about blended families? With the additional complexities brought on by ex-spouses and the emotional baggage from previous relationships, it’s no surprise that managing money in a blended family can be even more challenging.
According to financial expert Mikel Van Cleve, who is currently pursuing a Ph.D. in Financial Planning at Texas Tech University, the dynamics of a blended family can make financial decision-making incredibly difficult. “No decision is simple, especially when kids are involved,” he says.
Recently, at the Financial Therapy Association Conference, Van Cleve and fellow Ph.D. student Ashley McWhorter Keamo presented their research on this topic. They highlighted that blended families come in various forms, including one spouse having children from a previous relationship, both spouses having children from previous relationships, and the possibility of having children together. Each form presents its own unique set of challenges.
Surprisingly, the National Survey of Remarried Couples found that a staggering 73% of remarried couples do not have a specific plan for managing their finances. This is despite the fact that 66% of these couples express concerns over unpaid bills, debts, or settlements.
At Modern Husbands, we’ve consistently heard from couples who either avoid discussing money altogether or simply lack the knowledge and tools to tackle their financial difficulties head-on. It’s clear that addressing the financial complexities within blended families is crucial for their long-term success.
Building a Successful Financial Plan through Open Communication
The foundation of any successful financial plan is open communication. It is imperative for all parties involved to discuss their financial expectations, goals, and concerns right from the beginning. Transparency about income sources, debts, and pre-existing financial commitments plays a vital role in this process.
The Complexity of Blended Families
Blended families require even more attention to communication in finances, according to Van Cleve. With more people involved, the dynamics become more complicated, leading to potentially muddy waters that can disrupt the financial harmony of the family.
The “Bucket” Approach
One successful approach for managing money in a blended family is the “bucket” approach. This method involves having a joint account dedicated to managing household expenses, while each partner maintains a separate bucket for expenses such as past debts, previous financial obligations, and child-related expenses.
Note: Brian Page is the co-host of the Modern Husbands Podcast and the founder of Modern Husbands. Modern Husbands offers “Money Marriage U,” online courses that provide financial therapy and financial planning lessons.
