Published: October 30, 2023 at 7:20 a.m. ET
Managing family finances is one of the leading causes of divorce. If nuclear families can’t agree on money matters, is it really surprising that a blended family often faces even more challenges?
Additional outside forces, such as ex-spouses, as well as prejudice and heightened emotions brought into the relationship by previous failed relationships, can make managing money in a stepfamily particularly difficult, says financial expert Mikel Van Cleve. Van Cleve, currently a Ph.D. student at the Texas Tech University School of Financial…
Managing family finances is one of the leading causes of divorce. If nuclear families can’t agree on money matters, is it really surprising that a blended family often faces even more challenges?
Additional outside forces, such as ex-spouses, as well as prejudice and heightened emotions brought into the relationship by previous failed relationships, can make managing money in a stepfamily particularly difficult, says financial expert Mikel Van Cleve. Van Cleve, currently a Ph.D. student at the Texas Tech University School of Financial Planning, focuses on how blended families manage their money. He adds: No decision is simple, especially when children are involved.
I attended the latest Financial Therapy Association conference, which Van Cleve and a fellow doctoral student from Texas Tech University participated in. student, Ashley McWhorter Keamo presented her academic research on this topic. They noted that blended families can take a variety of forms: one spouse having children from one or more previous relationships, both spouses having children from previous relationships, and possibly one or more children together. Each shape presents unique challenges.
The National Survey of Remarried Couples found that 73% of remarried couples do not have a specific financial management plan, even though 66% of them worry about unpaid bills, debts or payments. This aligns with what we hear all the time at Modern Husbands: couples don’t talk about money or don’t know how, despite their financial struggles.
The foundation of any successful financial plan is open communication. From the outset, it is essential that all parties involved discuss their financial expectations, goals and concerns. This includes transparency on sources of income, debts and any pre-existing financial commitments.
This is especially important for blended families, Van Cleve says, because the more people there are, the more complicated it is and the more emotions there are to muddy the waters and financial harmony of the family.
An effective approach to managing money in a blended family is the compartment approach. Perhaps one tranche is a joint account to manage household expenses, while each partner has a separate tranche 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 their money and homes and offers Money Marriage U, online courses offering financial therapy and financial planning lessons.
Modern Husbands is hosting a virtual discussion for subscribers on November 7 with Mikel Van Cleve and Financial Therapy Association President Ed Coambs. Click here to register for the event.
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