Coach/advisor on merging finances in blended family.
My partner and I are inching towards merging our finances in our blended family with three children between us. Questions abound, like: do I pay my alimony and child support out of my own income, separate from hers, and separate from any joint bank account we have? Do I take on obligation to help her pay her student debt? Do we simply through all of our money into one big pot (a joint account) and use that to take care of all expenses for all five of us, regardless of source or history?
These are the sort of things we're wrestling with, and I imagine there is some class of finance professional out there who can help answer them. I'm not asking for 'financial planning' (how much to save each month today for retirement!) but for someone to articulate some different strategies and considerations for merging our finances.
It may be a "financial advisor" but what we want is someone to sit with us, understand the nuances of our situation, and make some suggestions, possibly multiple options, for establishing our joint finances.
Parent Replies
I am most definitely not a financial advisor but I can offer you advice as someone who inched towards merging finances in a blended family situation some years ago
1) I'd say YES you pay your alimony and child support out of your income, yourself. My partner's income at the beginning fluctuated wildly and sometimes he'd have a really tight month, which meant I'd take on more of grocery expenses or whatever, but alimony and child support were HIS obligations. My obligations to his kids were to be nice to them. (one exception - one year he was short of cash to pay his daughter's college tuition and I paid it, but he paid me back. I couldn't have sat there with money in my bank account and watched her get kicked out of school).
2) Same with student debt, also an obligation she assumed before she met you - that's hers. As for the rest, I think most couples (us included) in this kind of situation split their joint expenses, either 50/50 or proportionately (if one partner earns 2x as much as the other, they might pay more than half; or, in our case, my husband starting paying the cable bill because he wanted all the channels -- even though I watched TV too). Once he got rid of his alimony and child support obligations, and was making a lot more than I was, he paid for all of the groceries and eating out - we still split the mortgage, property taxes, and utilities 50/50. It felt totally fair to both of us, which is really the goal. We fight about a lot of stuff, but honestly, hardly at all about money.
I don't necessarily think you need a financial planner to figure this out - that's more for investment type considerations. To me this is more of a therapy type question.
Hey. I know of a person that sounds a great fit for you. Her name is Valerie Sydnor! She is a licensed clinical social worker who has expanded into helping individuals & couples understand their financial beliefs, values, & traumas that may be impacting their behavior and relationships. She also helps with couples who are taking the next financial step together and building out a plan to merge their lives together.
I have been working with her for about 3 years now when I was entering a relationship and merging my life with my partner. I wanted to make sure I had all my bases covered and knew my options. And more importantly how to protect my finances in the event things didn’t last. Cause let’s face it, people change! Valerie broke all information down in a way that was understandable and she’s honest. She helped me really look at my money story and how that has impacted how I see money in my life.
You can find her at 510-999-8217 and https://justbreatheconsulationservices.squarespace.com/.
I’m not a professional but I’ve seen and lived all kinds of arrangements…Nolo Press has a great offering, The Living Together Guide or something like that. It covers lots of scenarios and options.
My preference is keeping assets (and liabilities) separate and each contributing to a joint account for household and regular expenses. Blended families share a lot but what about your inheritors?
Mostly I’m sending best wishes to you and your family
We're not a blended family, but have had minimal financial stress for the past 38 years by keeping separate accounts plus a joint account from which to pay household bills.
When we got married, only i had debts (student loan and medical) and I paid those off myself.
It is much cleaner that way. Recall the old saying, "it's where there is ambiguity that the lawyers make their money."
Personally, I am a stepparent and we did the one pot method- I helped pay off my spouse's student loans and credit card debt, child support and child expenses come from the joint account, etc. But we also didn't really think about or plan; we have primary custody, so I've always just considered my stepson as my family as I would my own child.
That said, I've heard great things about the book The Smart Stepfamily Guide to Financial Planning: Money Management Before and After You Blend a Family by Ron Deal. Hope that helps!