Columnist image
Pattie Lovett-Reid

Chief Financial Commentator, CTV


The instances of blended families are becoming more common in Canada. The newly-released 2016 Canada census data found the number of multigenerational families have grown in the last 15 years – rising 37.5 per cent. In addition, 12.3 per cent of families in Canada are stepfamilies.

Finances can become challenging when adding – or – removing a new partner, stepchild or extended family member into a household. In fact, a recent TD survey found that 66 per cent of Canadians living in a blended family say they face financial challenges because of their household situation, and 47 per cent find juggling these challenges stressful.

Top stressors include who pays for ongoing expenses, having different views on managing the household budget and determining household saving priorities.

TD offers up house rules for blended families:

1. Talk first. While there are obvious discussions to have, like whether or not to join bank accounts, other considerations such as life insurance should also play a role in your full financial plan in order to protect your financial obligations.

2. Build a budget together. It’s important to build a budget together to ensure everyone is on the same page about allocating money. Remember that each person comes into the household with different financial values – someone might be a spender, while another feels it’s important to save every penny. Developing a budget together will make surprises less likely.

3. Set expectations. One person is usually better at the day-to-day management of ongoing household expenses. It's okay to designate one person as the lead or bill payer, but others should be involved to know what’s going where. Since it’s rare each family member earns the same income, it’s best to pre-determine how much each person will contribute to day-to-day expenses.

4. Create some space. You may decide to have separate budgets for each person to spend on discretionary items of their choosing. Perhaps it’s a line item in the family budget called “fun money.” These are the funds that can be used any way the person chooses, and gives spenders and savers a bit more freedom and less stress about having to report back on all purchases – just as long as each person remains accountable for staying within their budget.

5. Touch base often. It may seem obvious, but it’s important to communicate frequently. Whether it’s discussing budgets, financial goals or even household rules, having ongoing conversations will lay the groundwork for a well-functioning home.