Money and relationships
I am totally fascinated by the question of how couples make joint decisions about money, especially when one earns more than the other.
Today somone pointed me to the website of Equality in Marriage. It’s got a lot of nice links and advice on how to talk about money, before, during and after marriage. This organization was founded by Lorna Wendt, who became famous for fighting for half of the assets from her marriage with former GE CEO Gary Wendt even though just the 10 percent he offered her would have made her a very wealthy woman. She argued that they were equal partners in the economic unit that was their marriage, and that he couldn’t have become the success he was without her support.
(I remember reading about her in The Price of Motherhood, and asking my husband if he wanted a post-nuptual agreement before he quit his job to be an at-home parent.)
When my husband and I were both working for pay, we had three sets of bank accounts — his, hers, and ours. We figured out how much we needed to cover our regular bills and save a bit, and divided that amount roughly in proportion to our after-tax incomes. The remainder was ours to spend as we pleased. Like our decision to both hyphenate our last names, it was complicated, but equitable.We haven’t changed our formal system, but all the money going into the "ours" account comes out of my paycheck, and the amounts of money left in the "his" and "hers" accounts are smaller and smaller. I don’t feel like I get more of a vote on how we spend our money because it’s my name on the paycheck, but I do have slightly more money that’s mine. I pay more attention to how we’re doing at staying within our budget, so am more likely to be the one to say "whoa," but that was true even when my husband earned more than I did. (Neither of us considers shopping a leisure activity, so it’s almost never a big issue.)
The conventional wisdom is that only breadwinning is valued in our society, that caregiving is overlooked. And yet, one of the recurring complaints from the mothers on the email list for working wives of SAHDs is how little credit we get for breadwinning. At best, we are seen as good mothers in spite of our employment, not because of it.
November 18th, 2004 at 2:53 am
We started our relationship (when I earned twice as much as him) with three bank accounts as you describe, but soon collapsed into one joint account because it was easier. We still completely combine our finances, through stages of equal pay, him earning 50% more than me, and now him being the SAHD.
It works for us, and we never have any conflict about it, probably because we’ve always had more than enough money.
But I’m mainly commenting because I love your blog, and wanted to tell you. I’m a working mum with a stay at home dad, and my two boys are similar ages to yours, and although I’m not a policy wonk, many of my friends are!
How do I get on that email list for working wives of SAHDs?
November 18th, 2004 at 12:40 pm
How we did and do it is, we make a budget. Every time our income changes, or once a year if bills change, we redo the budget. Everything we earn is added together, then we subtract bills and groceries and gas and such, then we divide what’s left in half. There are three accounts: his, hers, and savings. Whatever we’ve decided to save goes into savings. Then the bill money plus leftover discretionary income goes into the account of whoever pays the bills (usually not the person with the most demanding job). The perk of paying the bills is that on low-bill months, you have a little extra; on high-bill months, a little less–so when there’s extra is when you go buy kids’ clothes or whatever.
So basically we don’t take into account who earns more at all. This is partly b/c I feel like the wage gap makes that part of it unfair. Strangely, too, now that I’m the earner, I find that I don’t ever spend money, since I don’t ever do anything but work and come home, and I really prefer to be freed of the errand-running crap. So that’s how it works for us.
November 19th, 2004 at 6:07 pm
First: You hyphenated both your names? *swoon* I ended up hyphenating mine, while my husband didn’t change a thing, but that was back in ’88. (Heck, I proposed not changing my name, and he gave me that “you just ran over my dog” look, and really, truly asked, “But, don’t you love me?” Sheesh, I’ll make my last name fifteen characters long for you — isn’t that love? 😉 )
We’ve always had one bank account, taking turns being responsible for it. My husband started staying home with our daughter when he was laid off in ’97, and he’s been the Chancellor of the Exchequer since then. I get a periodic allowance, and I put in informal requests for larger items, such as computer upgrades. (Oddly enough, that was the same way my parents did it — Dad would deposit his check, but Mom was responsible for paying the bills, and Dad got an allowance.)
Sometimes I get a bit cranky because I miss *spending money*. But then I tell myself, we’re on this budget so we can afford to have a stay at home parent, and I don’t really need another video game anyway. But, somedays it seems my husband gets more *stuff* out of the deal than I do — he’s built up a lovely set of mechanic’s tools over the last few years, and I haven’t really had a corresponding benefit. (Though I’m going to try to talk him into letting me get a new development environment, which would be my version of the SnapOn rolling case full of shiny chrome things.) And, it’s a pain in the ass to buy him a present, as he will shortly know exactly how much money I’ve spent on him. 😀
November 22nd, 2004 at 8:55 pm
We tried to do a family-wage postnup, but postnups aren’t recognized in IA, and so far we haven’t found two lawyers willing to experiment. And I must agree that it’s a tricky thing, legally. The argument that a postnup must be presumed suspect because of the possibility of coercion sounds reasonable to me. If it weren’t for the divorce part, we wouldn’t mind being a test case, though.
We also do his/hers/ours accounts and property. All earned income goes into ours, from which equal allowances and equalizing IRA contributions get paid out. I take care of all the money once it’s earned, mainly because I’ve got more financial experience and the stuff still scares my husband, though not nearly as much as it did when we got married. (His family tends to do the “shut eyes tight and hope” financial planning.) So after I do the money stuff each month, we sit down for money night, and I go over the current savings/investments/debt picture and near-future planning with him. We also go over current expenditures so that he can see where they are or aren’t in line with our budget.
I don’t know what he does with his own money, and I don’t care. His bidness.
November 24th, 2004 at 3:01 pm
I also ask – how do you get on this email list of spouses of SAHD’s? (Mine works at home, but for a fraction of my salary).