The Age Old Debate: Should Stepfamilies Have Shared or Separate Finances?

Ah the age-old debate: should stepfamilies have combined or joint finances, or combination of the two? Actually, I’m not really sure if this is an age-old debate, but, since becoming a stepmom, I’ve seen a lot of talk in stepfamily circles about what the “best” approach is. It’s also the first topic that I discuss with new coaching clients, because it influences the stepfamily’s entire money management system.

First, a little bit of an explanation. When I say “structuring finances” (yes, it’s a pretty boring term!), I’m talking specifically about bank accounts: who are the account holder(s) and who has access to them.

There are three primary ways that stepfamilies can structure their finances: separate, shared, or separate + shared.

Separate Finances

With separate finances, each partner maintain their own accounts. This, of course, is the structure that every new couple starts out with, stepfamily or not. Each partner could have multiple accounts with various purposes, but they are all individual accounts and each partner maintains full access and control of their own accounts. Each partner is then responsible for paying for certain bills or they split the bills by paying each other back for shared bills on a regular basis. This is essentially the same sort of arrangement that roommates would have.

Why would a married couple choose to have separate finances? Well, there are many reasons why this might be the preferred options for some stepfamilies. There might be a situation where there is some under-lying resentment about one partner’s spending. This structure can help reduce resentment and conflict. In some jurisdictions (not most), maintaining separate finances can have an impact on how child support is calculated. Or, it could be that one or both partners decides they do not want to be financial responsible for their stepchildren.

The downsides of this structure? Well, it can be pretty complicated to always be “settling up” the bills with each other. Some couples get around this by each being responsible for certain bills and there are also some good apps that can help make this a bit easier like Splitwise. Also, maintaining completely separate finances doesn’t foster a sense of teamwork about shared financial goals, like long-term savings goals or investing.

Shared Finances

With shared finances, the couple has one or more shared accounts. I also consider scenarios where each partner has their own personal account where a personal allowance or “guilt free spending” amount is transferred from the shared account to fall under this category (this is always a really good idea and I highly encourage this!).

This structure is simpler overall. There is no constant “settling up” of bills. It can work really well if one person is the natural treasurer of the family, although I would always encourage both partners to stay very involved in the household finances. I believe it encourages more joint accountability, joint effort, and teamwork, particularly around longer term saving and investing.

However, there could be some downsides to this structure for stepfamilies. Sometimes, resentment and conflict can build with this structure. In some cases, there may be a differences in the way that each partner wants to spend money, particular around the children. This could be about any number of things - like clothing, fast food, schooling, or activities. Or, there could be underlying resentment about money that is going to an ex partner’s household. In a poll I ran in my Facebook Group, Thriving Together: Money Management for Stepfamilies, “covering costs that belong to the other home” has the second most votes in a poll about members’ biggest frustrations when it comes to money.

Separate + Shared

Another option, and one that I think is pretty common for stepfamilies, is to have a structure with some combination of separate and shared accounts. For example, each partner maintains their own personal bank accounts where their income is deposited but they also have a shared expenses like rent, utilities, and groceries. They would each contribute an agreed upon amount to the shared account on a regular basis. They could even have shared savings goals for this like furniture, travel, or a down payment for new home that is saved in the shared bank account.

This structure can help alleviate some of the issues that may crop up with both separate and shared finances but it is not perfect and can also be a little complicated. The couple will need to decide on an equitable way to split the contribution to the shared account and there is less of a sense of joint accountability, joint efforts, and teamwork, than having fully shared finances.

What Works Best?

In the end (and my answer will surely surprise no one!), there is no “right way” to structure finances in a stepfamily. Each family is unique and will have their own set of circumstances and challenges. What is important is that both partners communicate openly and honestly about their finances and work together to find a structure that works best for them. Whether they choose separate, shared, or some combination of the two, what matters most is that they are able to create a sense of teamwork and joint accountability when it comes to their finances, which can ultimately strengthen their relationships and their family as a whole.

I’ve written a free guide that goes into greater detail on how stepfamilies can structure their finances. It’s a great resource to use as a conversation starter with your partner! The guide goes into the pros and cons of each structure, talks about which structure is ideal for different stepfamily situations (for example, which structure is best for stepfamilies with “ours” children?), and has real quotes from stepfamilies explaining why they have chosen a certain structure.

You can download the guide here.

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