logo

4 ways to help blended families navigate finances

VIDEO4:3004:30
Blending families and finances

It's a family dynamic that is increasingly becoming commonplace — and can make dealing with financial issues particularly challenging.

A spouse — or both — has at least one child from a previous marriage or relationship and together they create what's known as a "blended family." Think "The Brady Bunch" – just without the rotary phones and a lot less "Marcia, Marcia, Marcia."

Statistics show blended families are on the rise. About 40% of all new marriages in the U.S. include at least one person who was previously married, according to a Pew Research Center analysis. And among adults who are presently married, roughly a quarter (23%) have been married before, compared with 13% in 1960.

Even more staggering, 63% of women who remarry come into blended families, with half of those involving stepchildren who live with the new couple, according to the National Center for Family & Marriage Research.

More from Invest In You:
How to make people smarter about money
Many are 'fighting the Fed.' Good for them.
Billionaire Dalio has warning for retail investors

Navigating the complexities of a blended family can be demanding enough, so couples often put off having the "money talk" — a critical piece of the family financial puzzle. It's why Ronnie and Lamar Tyler said they sought professional help when they first married and brought their families together 14 years ago.

Ronnie already had two children before meeting Lamar. The couple had their two youngest after they married.

"One of the first things we said we had to do is go out and get someone that was more educated, that knows more about these things than us that can advise us on, you know, what all the proper steps are," Lamar said. He said it was important to him that he and his wife not waste time, finances or resources making the wrong choices.

1. Get expert advice

They sought advice to get right to the heart of it, Lamar said. "The first question they asked us was 'Are you in a stepfamily situation?' That is something we had to sit down and address." They've been working with a financial advisor and are now consulting with an attorney about their wills and estate plan.

The Tylers own a media company and live outside of Atlanta with their four children. They are the husband and wife power couple behind the popular African-American marriage and parenting website Black and Married with Kids. But they say they initially didn't realize the unique set of challenges that comes along with blending lifestyles, finances and personalities.

"Being in a blended family, it kind of blindsided me because I wasn't really intentional about trying to figure out like, what does this mean for me?" said Ronnie. "What does it mean for my husband and what does it mean for my kids?

Ronnie and Lamar Tyler, founders of website Black and Married With Kids.
CNBC

"And so that was something to figure out in addition to the fact that we're newlyweds, we need to learn how to communicate with each other and we need to learn how to set proper expectations," she said.

Ron Deal, a marriage and family therapist and co-author of "The Smart Stepfamily Guide to Financial Planning," has counseled blended families for more than two decades.

"There's a lot of moving parts to blended families and that's what hits most of them," Deal said. "It takes them off guard and they don't know how to navigate that.

"The divorce rate for couples in blended families is quite a bit higher than it is for first families, so we try to help people make sense of what's going on and navigate that transition," he said.

2. Draft a plan for merging relationship and money

Deal says understanding the role money plays in combining two families is crucial to the success of a healthy blended household.

Starting the conversation comes first. "Merging money is also about merging relationships," he said.

A fundamental step he recommends is crafting a "togetherness agreement" — a detailed plan of how the couple is going to care for one another in their marriage and in their family, in addition to how they will care for one another's children.

"Couples often say to one another, I'll take care of your kids and you take care of mine, and they have the best of intentions," said Deal. "But the complexities of being a blended family, the multiple households that are involved and multiple caregivers, adults that are involved and the multiple generations that are involved make it a challenging process.

"So what we do is we help people figure out how money plays a role in them coming together."

The more that you can communicate and the more that you can show that united front, even from a financial perspective, the better off you'll be as a couple.
Ronnie Tyler
co-founder, Black and Married With Kids

Seeking help from individuals who have expertise in blended families can really make or break the process, says Laurie Marchel, co-author of the book, "The Stepmoms' Club: How to be a Stepmom Without Losing Your Money, Your Mind and Your Marriage."

Marchel wrote the book under a pseudonym as a guide to empower stepmoms who, like herself, were struggling trying to find advice navigating the nuances of a blended family. Marchel's husband was previously married with two young children of his own.

"When it comes to money — that is the No. 1 issue or argument in any family," she said. "When you take a look at it through a lens of a blended family, the issues are so different."

3. Gather documentation and track dollars

She says it is important to realize the amount of preparation and paperwork involved after divorce and remarriage.

"Somebody is coming into the relationship with some form of documentation of a past relationship, whether that be a divorce decree or a domestic partner agreement," Marchel said.

"There's child support, there's alimony, there's different checking accounts, there are accounts that might not have your name on it, and you're in this relationship," she said. "There are so many pieces of this puzzle that need to be discussed in your relationship."

4. Talk early and often about financial issues

Her strategy for dealing with the complexities with your partner? Have the money conversation early, be direct and gather the proper documentation that will outline where dollars are going. "Ask: what are your financial obligations to your ex?" Marchel said. "Is there child support? Is there an alimony?

Laurie Marchel, co-author of "The Stepmoms' Club: How to be a Stepmom Without Losing Your Money, Your Mind and Your Marriage."

"Are you responsible for paying for housing or their utility bills?" she continued. "Having that conversation, asking those questions immediately. How hard is that?"

The answer is "very" for many couples in a blended family. These discussions can be challenging. The Tylers say having a talk early and often about how they will provide for their family has taken the sting out of potentially emotionally charged issues.

"The more that you can communicate and the more that you can show that united front, even from a financial perspective," said Ronnie, "the better off you'll be as a couple."

SIGN UP: Money 101 is an 8-week learning course to financial freedom, delivered weekly to your inbox.

CHECK OUT: Save hundreds of dollars a month by learning 3 easy skills via Grow with Acorns+CNBC.

Disclosure: NBCUniversal and Comcast Ventures are investors in Acorns.