STEPPARENTS AND FINANCES

Preparing a budget and then living within its boundaries is difficult at the best of times, but a major challenge often occurs when two families merge. Both parents may bring biological children into the new family, and this puts both mother and father in a planning situation that involves more people than they are used to. Small wonder that many surveys show that financial disputes are high on the list of stepfamily problems!

In Battle of the Budget, Jeannette Lofas takes an in-depth look at how the new family can prevent many issues that may arise after the blending of two households. She presents a detailed look at the following:

• The Full Report.
  Partners compare their financial obligations in detail.
• Number Crunching.
  The couple figures out what their basic expenses will be. Lofas includes further discussion of a sensitive area; namely, how the other partner spends money on the kids.
• Who Pays for What?
  Some expenses are obviously occurrences that are single or mutual responsibilities. When this list is complete, the couple works out a plan for what is left.
• Pooling Resources.
  In this area, there is consideration of whether the family will have a single bank account, or if each spouse will have a separate account and create a joint one for household expenses.

This also is the time to consider prenuptial agreements. Probably few things are less romantic when a couple is planning a marriage, but Lofas points out in her article that attitudes towards money can be deep-seated and it is best to have complete understanding from the start.

Preliminary discussions will include information about property held individually, as well as that owned jointly with an ex-spouse. If an ex-spouse received a house in the divorce agreement, the other partner should no longer have his or her name on the mortgage.

As children are involved in family finances, the early plans should include some consideration of wills for both parents. One parent could be left to take care of all the children, and provision for their welfare is vitally important. The will also allows parents to specify decisions about care of the children. Anything set up at first can always be adjusted later if conditions change.

For an in-depth look at financial considerations, visit Financial Tips for Stepparents.

Families that are just starting out often agree that stepchildren and biological children will be treated the same way, but that usually isn't very realistic. For example, if a child has huge dental bills, and child support payments (if there are any) are nowhere near enough to cover the costs, does the stepparent help out? Does it make a difference if the couple have been married for one week or ten years when the situation develops? What happens if one parent already has saved, or is earning, considerably more than the other?

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