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The Great-West Life Assurance Company, London Life Insurance Company and The Canada Life Assurance Company have become one company – The Canada Life Assurance Company. Discover the new Canada Life

The Great-West Life Assurance Company, London Life Insurance Company and The Canada Life Assurance Company have become one company – The Canada Life Assurance Company. Discover the new Canada Life

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Freedom 55 Financial is a division of The Canada Life Assurance Company and the information you requested can be found here.

Managing finances in a blended family

Key takeaways

  • It’s not uncommon for blended families to face financial challenges.
  • There are strategies to help blended families manage their finances effectively.

What are blended families?

A blended family is a family where 1 or both spouses bring children from a previous relationship.

Statistics CanadaOpens a new website in a new window says that in Canada, 12% of couples with children were stepfamilies.

Common financial issues for blended families

When 2 families merge their finances, it’s not uncommon for them to face challenges.

Keeping financial details from your spouse

Not being completely truthful about your personal debt, income and assets, or your spending and saving habits can lead to mistrust, confusion and conflict in your relationship.

Estate planning

Wills, powers of attorney and trusts should be updated so new spouses or stepchildren aren’t excluded from inheritances.

Differing financial priorities

How do your financial goals and investment risk tolerance as a single compare with those of your spouse? Will they conflict or compliment your goals as a couple? How will joint accounts work in your new relationship?

Spousal support or child support payments

These payments can be a big expense and a challenge for some blended families.

How to manage finances in a blended family

While there is no single approach that will work for every situation, here are some tips to keep your blended family’s finances on track.

Open, transparent financial discussion

Before you blend your families, talk with your partner in-depth about money. What are you bringing into the relationship? What are your expectations for how finances will be managed? Will you combine your finances or keep them separate?

Set new financial goals

Determine what you’ll save for including retirement, vacations, vehicles, your home, your children’s education and more.

Create a new budget for your blended family

Once you’ve set up your saving goals, look at your income and expenses and create a budget that will help keep your finances on track. Discuss who’ll be responsible for making sure you both stick to the budget. You may want to work with an advisor for this.

Review estate plans and insurance

Inheritances in blended families can get complicated. As part of your estate planning, make sure you update your wills and trust documents. You may also need to change your powers of attorney.

Check your life insurance coverage to determine if it still meets your needs and update accordingly. You may also need to update your beneficiaries.

What's next?

Now that you know more about managing finances in a blended family, you may choose to meet with an advisor, or if your workplace benefits are with Canada Life, contact a health and wealth consultant to:

  • Create a new budget.
  • Develop new financial goals and investment plan.
  • Review life insurance needs and update beneficiaries.

The information provided is general in nature and should not be relied upon as a substitute for advice in any specific situation. For specific situations, advice should be obtained from the appropriate legal, accounting, tax or other professional advisors. 

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