Blended Families: Not Out of the Ordinary Anymore

Information from the most recent Vital Statistics Report shows that about 75 percent of divorced persons eventually remarry and about 65 percent of remarriages involve children from the prior marriage and form blended families. 

Also, 60 percent of all remarriages eventually end in legal divorce. 

So, blended families are not out of the ordinary anymore. More and more divorces and remarriages are making the blended family more prevalent. With the blended family more common comes the questions of family finances and do you keep your finances separate or blend your finances with your family?

Many blended families that I work with keep their finances separate. But, there are also a number of blended families that merge their finances. When you have to be careful is when allocating money for children's expenses, especially when there are multiple children at various ages and an unequal financial situation.

Many blended families that merge their finances can have issues with college expenses and can be especially difficult when the blended family increases the numer of kids in college at one time.

For blended families I strongly urge a prenuptial agreement especially if there are kids or a business involved. You want to protect yourself and your children financially.

Blended families always question if they should merge their retirement and other accounts together. Retirement accounts are in your name only so you cannot merge the accounts together, but I would look at your accounts all together so that you know what your complete allocation is and that all your investments and accounts are working together. 

I would look at the accounts at least once a year from an allocation standpoint to make sure your money is working together and hard enough for you.