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Blended family finances: Tips to get started

A family takes a walk together.

Start these talks with your partner early to ease stress and get your new family off to a good start.

Creating a new family that includes children from previous relationships is a joyful act, to be sure, but it also can be a difficult one to navigate, especially when it comes to finances.

“It’s definitely harder than just two people getting married,” says Karly Hoerig, a Thrivent financial advisor from Victoria, Texas.

There is a lot to figure out when children are involved, and it can get tricky. How will you handle expenditures concerning stepchildren? Will you combine your finances or keep them separate? Do you need to update or establish legal documents?

One of the best ways to avoid financial conflict and stress about money is for you and your partner to talk openly and honestly about a variety of financial subjects, ideally before you join households.

“As soon as you start considering moving in together or getting married, have the conversations,” says Hoerig. “Put everything on the table. It’s never a good thing to hide anything from your partner.”

To help make it easier, we’ve created a list of conversation topics. They’re meant to be starting points to lay a foundation upon which you can build together. It doesn’t matter if you address the topics all in one sitting or break them up. The important thing is to have them. They’ll help you make decisions that reflect your priorities and avoid surprises. And if you’re already in a blended family but are struggling with finances, these conversations still can be helpful.

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Blended family finance tip 1: Explore your attitudes and priorities around money

Everyone has unique perspectives around money, and they often come from experiences growing up. Those differing views can make it harder for partners to get on the same page.

Kim Dwyer, a Thrivent financial advisor in Plymouth, Michigan, and a mother and stepmother in a blended family, suggests couples start by prioritizing what’s important to them for their household. “For example, some people prefer to spend their money having experiences with their kids,” she says, “while others prefer to provide things for their kids.”

Besides how and what to provide for your children, other priorities to discuss include your views and priorities about debt, home ownership, paying for public or private schools and college, and giving of your time and money.

When money views don’t align.

Couples often discover that their money views don’t align. Nick and Lori Perez, Thrivent clients of Hoerig from Schertz, Texas, recently married and created a blended family. Lori, who’s a pharmacist, is a stepmother to Nick’s two children.

“How Lori and I were raised regarding money was a challenge for us,” says Nick, director of operations for a pharmacy technology company. Nick grew up in an environment where there was not a focus on saving money.

Lori had the opposite experience. “I was raised in a family that believed in no debts,” she says. “We lived conservatively, and that’s how I’ve lived my life.”

Their different approaches to money brought about some tough conversations early on. Nick had already started to see the pitfalls of not saving money, he says, “So I appreciated Lori’s approach.”

Set a good example for your kids.

While having a unified philosophy around money helps your household run more smoothly, it also sets a good example for your kids. But what if the other parent’s household has a different outlook? That can create a challenge for your kids.

Todd Yeiter, director of advisor support at Thrivent, grew up in a blended family and spent time at both parents’ homes. “My mom and stepfather had drastically different opinions about money than my dad and stepmom. It was really difficult as a child. One set of parents was ‘live for the moment, keep up with the Joneses.’ The other set was ‘live well within your means, build a cushion, and be as self-reliant as possible.’”

You might not align with your former spouse’s approach to money, but everyone in your household will do better if you and your partner are aligned. And the differences between the homes can present teachable moments to help your kids understand and accept them.

As a child, Yeiter sometimes felt resentful of the financial restrictions of his mother’s and stepfather’s household. But as he got older, he was very appreciative to have learned their approach to money.

“I remember my stepfather talking about why he chose a different path about money than my father,” says Yeiter. “But he explained that one approach wasn’t necessarily better than the other. It just was his philosophy, and it was important to him to have cash reserves and savings.”

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Blended family finance tip 2: Make a family household budget

Creating a budget helps every household be intentional about how to pay for expenses now and in the future, build savings, and plan for giving. In a blended family, a budget also takes into consideration how the parent and stepparent will support their children and stepchildren, such as who will pay for items like child support, education, clothing and activities, as well as any support that may need to be provided to ex-spouses.

Separate family finances or combined family finances?

For some families, keeping their finances somewhat separate works best for them. They might have a shared account for paying rent or the mortgage but separate accounts for individual obligations or savings. Or they might choose to have each parent pay for their own kids’ needs.

For the Perezes, combining their finances made the most sense. “We think of ourselves as a team,” says Lori. “Together we’re one check and one household, and that includes how we pay for things for the kids. But we still had to decide whose checking account we’d use and if we would pay bills using a credit card or directly to a biller’s account.”

Deal with family debt.

Setting a household budget also includes discussing debt. The conversation should start out with open and honest discussions about how much debt each of you may have. What makes it trickier for a blended family is that the debt could be tied to past relationships. Therefore, it’s especially important for each person to be honest about what debt they’re bringing into the relationship.

“Know what your partner’s debt is and make a plan for dealing with it,” says Dwyer. “As a couple, you have to decide: Will you pay it off together or keep separate bank accounts until it’s paid off by the person responsible for the debt? Figure out what works for you.” She recommends looking at different strategies and assessing the pros and cons of each.

Your discussion about debt also should cover how you’ll handle any new debt you take on. For big expenses like furniture, a new car or a home improvement project, the Perezes set a spending limit and then include saving for it in their budget.

Review family credit scores.

While you’re on the topic of debt, take a look at each of your credit scores.

“Credit ratings came up in our discussions when we were dating,” says Lori Perez. “It was very important to me. Mine was strong, but Nick’s wasn’t.”

If one person’s score is better than the other, Hoerig recommends working to bring it up. “It will help both people in the long run when you want to make purchases together, like buy a house.

“It can be embarrassing to discuss,” says Nick. “My credit score was impacted by my divorce. But you have to talk about it. It is what it is. I basically brought up my score over time by paying off debts and reducing the debt-to-income ratio.”

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Blended family finance tip 3: Look at family finance legal documents

In the excitement and anticipation of blending families, it’s easy to think you’ll take care of legal documents when things settle down. But you shouldn’t put it off. This is a change in your life circumstances, which means documents including wills, life insurance, power of attorney and health care directives need to be updated or established.

“It’s important to make sure everyone knows each other’s wishes,” says Hoerig. “In addition to revising wills and other legal documents to make sure the family as a whole has what it needs, you might want to create a prenuptial agreement. Some couples use them to make sure any assets brought into a marriage go to their respective kids.”

The age of the kids can affect how you handle designating beneficiaries. “Our kids were really young when we blended,” says Dwyer. “So we split our life insurance policies equally between our four kids. But it can be different when you have teens coming into a blended family. The new parent and teenagers may have a different relationship than if the kids were young. For some people, it might make sense to just have your own children as beneficiaries.”

Our kids were really young when we blended. So we split our life insurance policies equally between our four kids. But it can be different when you have teens coming into a blended family. The new parent and teenagers may have a different relationship than if the kids were young.
Kim Dwyer, Thrivent financial advisor in Plymouth, Michigan

Another tool that can be helpful? A trust. “It can ensure distribution of wealth is done in a way that reflects your values and wishes,” says Yeiter.

“A trust spells out exactly the wishes of the person who passes away,” he says. “For example, some people worry that if you leave a whole lot of money to kids, they won’t know how to handle it. A trust can describe how assets should be distributed to them over time.”

The Perezes created a revocable trust. “It lays out in detail what happens at different ages of the children, in case we both die.”

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Blended family finance tip 4: Make legacy planning part of the family financial discussion

It probably won’t be top of mind at the moment you join together your families, but don’t skip this.

“It’s one of those discussions that centers around your long-term goals,” says Hoerig.

Look at your current retirement savings and assets and talk about what goals you want to set—for your own retirement and for any legacy you want to create for your kids and the causes you care about. And discuss how you’ll work toward those goals.

If you have assets you hope to pass on to your children, make sure your wishes are communicated clearly in legal documents and to your kids when they’re old enough.

“This is critical,” says Yeiter. “For example, if a father dies, what’s the expected inheritance for his kids or stepkids? Make sure your wishes are well communicated and the tools are in place to make it fair. And remember that fair doesn’t always mean equal. Try to think through any potential conflict among your heirs before it occurs.”

Dwyer agrees. “There has to be a conversation and everything spelled out clearly.”

For all of these topics, remember to keep an open mind.

“Be adaptable, throw out expectations and have open communication,” says Nick Perez. “Once you have the right frame of mind, dealing with the financial challenges of blending families becomes more manageable.”

And be patient blending family finances.

“Don’t force the conversations,” says Hoerig. “Be gentle with each other. And even if you’re not comfortable sharing everything right now, at least talk about budgets. The earlier you start these discussions, the easier they will go.”

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How Thrivent can help

Whether you need assistance starting the conversations about blending families and finances, understanding your options, or creating a spending and saving strategy, your Thrivent financial advisor can help. They have tools that can help you simplify the budget creation and spending assessment processes.

The client’s experience may not be the same as other clients and does not indicate future performance or success.

Insurance products, securities and investment advisory services are provided by appropriately appointed and licensed financial advisors and professionals. Only individuals who are financial advisors are credentialed to provide investment advisory services. Visit or FINRA's Broker Check for more information about Thrivent's financial advisors.