Blended family finances
Louise Jenner’s* kids won’t be getting new winter coats this year, even though last year’s are too small. But her stepchildren will have new coats and anything else they need, including riding lessons, expensive gifts and a parent-financed university education. You see, the Jenners are a blended family in Toronto. When Louise and her husband, Jack*, both in their fifties, got together, they hashed out a financial plan that calls for her to support her two kids from a previous marriage (along with child support payments from her ex) while he supports his four children from two previous marriages.
Their divide-and-conquer approach to managing expenses sounds logical on the surface. The Jenners’ children weren’t babies when the couple wed; they ranged in age from eight to 12. And Louise’s kids had a contributing and involved father of their own. What’s more, higher-earning Jack pays more than his share of the household expenses and generously foots the bill for vacations and other outings. Says Louise: “We married for ourselves. It wasn’t like Jack was looking for somebody so that he could take on two more children.”
The unintended effect, however, is that Louise’s kids sometimes end up being the have-nots in the family, since her income is lower. “I try not to let it bother me,” she says. “The fact is, Jack’s kids have parents who have done and are doing really well financially. My kids…not so much. His kids are lucky.”
To have and have-not
Welcome to the minefield of blended family finances. In nuclear families, says Yvonne Kelly, a social worker and co-director of the Step and Blended Family Institute in Tottenham, Ont., both parents are generally willing to focus scarce financial resources on their kids.
But blended families often have to care for numerous children and more than one household, in addition to deciding how much financial separation to maintain and who should pay for what. The money pressures are high and there’s an inherent potential for conflict, mainly because parents’ ultimate obligation is to take care of their own kids.
Given all the other niggling issues facing blended families — from interfering ex-spouses to the vagaries of each other’s offspring — it’s no wonder that 20 per cent of second marriages end in divorce within eight years. So how to pick your way through the sometimes incendiary financial issues that blended families face without blowing up your marriage in the process?
Talk about it
Before you raise a glass to toast your new life together, you should have several in-depth discussions about the way things will work in your new family. Alongside such topics as where you will live and how you’ll raise the kids, finances should have priority status on the agenda. “No one would merge two businesses without a few years’ analysis of the pros and cons,” Kelly points out. “And yet, we merge families without even thinking about it.”
The Jenners, contends Kelly, are already ahead of the game because they did discuss finances before tying the knot. Many couples considering remarriage simply avoid the topic. “They don’t want to muddy the waters of the love thing that’s goin’ on,” she says.
It may even be time to discuss a pre-nup.
