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What Is the Financial Responsibility of a Step Parent?

November 19, 2020 | Leave a Comment

Many second marriages now come with the bonus of additional children—step children. As a step parent, you’re expected to provide support and understanding for your “bonus children.” But what other responsibilities do you have? Namely, what are the financial responsibilities?

Financial Responsibility of a Step Parent?

Your financial responsibility is largely determined by your step child’s situation. Did his other parent die? Are his parents divorced, but the other spouse is paying child support? Was he abandoned by his other parent and receives no visits or monetary help from that parent? Do you have your own kids that you bring to this marriage? If so, what is your financial situation with your ex?

All of these variables come into play when you decide what your financial responsibility is as a step parent.

Do You Want to Adopt?

One of the first questions before you tie the knot is to determine if you want to adopt your step children. Of course, this isn’t an option for everyone, especially if the step children’s other parent plays a role in their lives. However, if your step children have an absent parent or their parent has died, you may want to adopt them, especially if they are open to the idea.

There are many advantages to adopting step children. Most importantly, you will then be able to have a legal say in their lives. Likewise, if your new spouse becomes incapacitated, you are recognized by the law as your step children’s parent.

Talk to a Financial Planner

Photo by Amy Hirschi on Unsplash

After you’ve made that crucial decision, the next is to consider talking to a financial planner. When merging a household, there are many financial decisions to make.

When it comes to taxes, will you file jointly with your new spouse? If so, will you be able to claim the children on your tax return, or will their other parent?

When it comes to money management, will you merge finances or keep them separate? If you decide to keep them separate, what will be your financial obligation to your step children?

Analyze Your Life Insurance Beneficiaries

Finally, analyze your life insurance beneficiaries. You, your spouse, and your step children are now a family, and as such, you want to make sure that they will be able to function financially should the unexpected happen.

Unfortunately, some people forget to change their beneficiaries, so as soon as you’re married, make sure to change the beneficiaries to your new family. Also evaluate whether you have enough life insurance after your new marriage. You may find you need to secure more.

Final Thoughts

Each relationship is unique. While there are no explicit rules about a step parent’s financial responsibility to her step children like there are with biological parents and children, you still want to make sure your new family is taken care of financially. You can do this by considering whether to adopt, consulting with a financial planner, and updating your life insurance.

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Sounds Like You Discuss Family Finances With Your Kids?

April 22, 2015 | Leave a Comment

I had a conversation with a woman I know recently about money and kids. She made a comment about hiding her income tax papers from her kids so they wouldn’t come across any details of her and her husband’s income. ‘’I don’t want them seeing our gross income and suddenly thinking we’re rich and they can have anything they want’’- she explained. She and her husband make decent income and she is doing her best to hide this fact from her kids. She is of the opinion that children shouldn’t be involved at all with their money.

She and I differ. I think kids should very much be in the know when it comes to family finances. They need to know and understand how money works and where else can they learn (multiple times), with the security that is home? Though I have learned quite a bit about personal finances, it was all self-taught, as an adult. In the situation of this couple, she has a learning opportunity with her kids to educate them. She can, and should, teach them how far money really goes.

I read something once that said the easiest way to teach kids about taxes is to eat 30% of their icecream. She can start with this point. Show her kids the number on paper and then show how much is taken away in taxes. Now there isn’t as much money, is there? Kids think $100 is a lot of money when in reality you’re only taking $70 home for every $100 earned and of that $70 it gets split between food, housing, savings, and family activities it really doesn’t go as far as a child may think and they need to see this, not be sheltered from all finances.

Saving is so important. Both Long term and short term savings goals are not only vital to financial success but help prevent debt- one of the most important financial lessons you can teach your kids. Even though it may be your retirement goals, kids need to see how much work it is to reach this goal. Maybe you’re saving for their post secondary, show them. Let them know how much of your money you put aside every year for their future goals.

Financial education is not something we can assume they will learn outside of the home. Unfortunately they don’t learn enough about it in school, despite it being one of the most important skills a child will ever learn. Kids will appreciate the trust you give them in discussing the family finances. There are many ways you can go about actually having the conversations and you can release as many or as few details as you want. I’m of the opinion that it’s a family unit and though there may only be one or two income earners the money if for the family, the more transparency they better.

Do you share financial details with your children? If so, how much detail?

Entertaining Kids During Christmas Break

December 4, 2012 | Leave a Comment

With kids being out of school for a few weeks during the Christmas break, it’s easy to run out of ideas on how to entertain them. Growing up, my mom would send me to the mall with friends, handing me $40.00 to basically entertain myself for the day. While a nice treat once in a while, for most families, especially during the holiday season, this would quickly add up to be a big budget buster. Here are a few ideas to entertain the kids (young and old) while on their Christmas break:

Host a Gingerbread House Building Party

This is loads of fun for kids of all ages. Have your child invite their friends over, either with a gingerbread house kit in hand, or you can provide the house for them (using an easy recipe and template). Have candy provided in dishes (on your well wrapped table, it will be messy!) and let them have fun creating. Don’t want to do a whole house? Try decorating gingerbread or sugar cookies instead.

Have them Volunteer

While volunteering with your children year round is encouraged, Christmas is usually a time when extra help is needed. Soup kitchens and food banks in particular are often looking for extra help during the season. If your child is under the age of 16, you may either need to grant permission or be present. Check to see if your local mall needs gift wrappers. Many malls offer gift wrapping services, often provided by volunteers, with funds raised going to local charities. Although this should never be the only reason why one does it, volunteer work looks great on university and college applications too.

Host a Christmas Themed Pajama Movie Party/Sleepover

Have a few of your kids friends over for a fun night of watching Christmas movies in their PJ’s (sleepover or not, you have to be comfy!). Provide a few snacks or have them help you make a homemade pizza and you’ve got yourself a budget-friendly party.

Go Outside and Play

Especially in today’s technology driven world, we forget about the simplicity of encouraging outdoor play without an abundance of toys. Encourage them to explore; pick up a stick and use their imagination! Make sure they’re well bundled if you’re fortunate enough to live in a cold winter environment and let them enjoy the fresh air.
Have them Help You Prep Meals for the Holidays. Most kids like to explore in the kitchen. It’s a great opportunity to have the learn some kitchen skills from you and your family.Yes, it will take longer than if you did it yourself and yes, your kitchen will likely be much messier but the skills that you’ll be able to teach are much more important than some spilled flour.

Check to See if Your Local Theater Offers Christmas Break Discounts

Most movie theater chains will offer discounted tickets during the local school break as a way of encouraging the movie-going experience so check it out!

Crafts

Have your kids make everything from Christmas cards or gift tags to tree ornaments. The possibilities are endless and most require very few supplies. Who wouldn’t love a homemade card from your young one?

Encourage the Inner Entrepreneur

If you have older kids, encourage them to use their time off to make some money during their break. Ideas include: shoveling driveways, offering to get groceries (or run errands) for people who need extra help, or dog walking for people who may be away or just too busy to do it themselves.

Christmas can be stressful enough, you shouldn’t have to worry about what your kids are going to be doing while off from school. With a little creative planning, you can quickly fill their time without breaking the bank!

What holiday activities have you done with your kids?