Our Newlywed Money Dilemma
We just got married. How should we manage our finances?
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The other night my husband and I were reading side by side in bed, on the fresh patterned sheets purchased for us as a wedding present. Mike put down the paperback he was reading and leaned over to ask: "Hey, can you write me a check for half the rent? It's almost the end of the month."
"Of course," I said, as I've been saying for four years now. Since we moved in together, we've split the rent and, in a slightly haphazard way, the rest of our shared expenses as well. Before we got married, this felt obvious. We earn roughly the same amount, and we are each lucky enough to have no debt.
After we got married in June, though, I felt the urge to merge financially. We'd never discussed a money meld before, and I hadn't really thought it through; I just figured that was what grown-up married people did. Starting with my parents.
When my mom married my dad in 1972, neither of them had an independent income. They were medical students in their early 20s who occasionally shared an enormous bag of Cheez Doodles for dinner. By the time they started earning money, they had already been married for two years, and it never occurred to them to keep anything separate.
By contrast, Mike and I had both been working for years—and building up our own bank accounts—by the time we got married at the end of our 20s. At first my impulse was to do the adult thing and merge all our funds to become Common Potters, as I've nicknamed couples like my parents. But once I thought about it for more than 10 minutes, it occurred to me that the definition of "grown-up married person" had become a lot more flexible since the Watergate era. My parents' model felt like an imperfect fit. Their traditional reasons for putting all their money in a common pot didn't apply to me. Unlike my mother, I was used to earning and spending as I pleased. I realized that I feared a loss of independence if we merged everything.
My reluctance to combine all of our accounts stemmed, in part, from my grandmother's experience. When she was born in 1913, a man's wages were considered his own, and any money he gave to his wife—even if it was for groceries—was a "gift." When my grandmother came to the United States in the 1930s, she had a deeply traditional marriage in which my grandfather was the sole earner, and she never felt free to make her own financial decisions. She didn't like that. "A woman should have her own money," she would tell me in her gravelly, Austrian-accented voice. It's advice that has stayed with me.
Mike also wants to keep some of his money as his own. "I don't want to have to explain every little purchase," he says. At the same time, our current strategy, in which we keep everything strictly separate (I call this being Independent Operators), isn't the most efficient way to save for the big-ticket items—a house, eventual babies. There's a third option: adopting a Sometime Sharer system of joint and separate accounts; it seemed appealing but complicated.
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I wanted to find out what other couples were doing, and how they decided to become Common Potters, Independent Operators, or Sometime Sharers. I also wondered whether social changes—the staggering debt of recent college graduates, the loss of pensions and 401(k) matching programs, the dominance of women in higher education, the declining rate of marriage, and the increasing rate of cohabitation—were changing couples' financial relations. And hey, I'm a journalist, which means I get to report out the answers. I wanted to ask strangers the kinds of invasive questions about their relationships—how much do you earn? What money-related fights do you have?—that are really hard to discuss even among close friends. The pairs I profile in the course of this series (sometimes anonymously, to encourage candor) provide a rare, private view of how life partners hash out their financial lives. I also put up a 40-question survey in the fall asking married and cohabitating couples to weigh in on how they manage their money, so I'd have some numbers to crunch.
The survey hit a nerve: 5,858 people took it. My respondents aren't a nationally representative sample, since they just volunteered. Instead, they're a mostly young and highly educated bunch. Their average age was 33, and a full 48 percent of them have graduate degrees; 72 percent said they were married or in a civil union, and the remaining 27 percent said they were not. (One percent of respondents didn't provide their marriage status.)
Past research has shown that cohabitating couples mostly keep their money separate. The last time the General Social Survey asked a question about family budgeting in 2002, it found that more couples use a common pot than any other system of management. My results jibe with the GSS: 48 percent of the married couples in my survey said they pool all their finances, compared with 9 percent of cohabitating couples. Unsurprisingly, married people with children were even more likely to be Common Potters—nearly 61 percent—while those with a failed first marriage were less likely, at 39 percent. Gay and lesbian couples, interestingly, followed the same patterns as straight couples: The same-sex couples who are married or joined by a civil union were more likely to be Common Potters than the cohabitating gay couples.
I assumed that younger couples would be more likely to keep their finances separate—they're less likely to be married, and they're more accustomed to having their own money, since on average they're not getting married until their late 20s. As it turned out, I was off the mark. The average age of a Common Potter was 34.5, while the average age of an Independent Operator was nearly 32, and the average age of those using the Sometime Sharer method was just over 33. Not much difference there.
These statistics gave me a macro picture. But Mike and I also wanted to learn more about the micro: how couples were creating budgets and what sorts of tools they used. Here's where I'll confess that I've never followed a proper plan for spending and saving. I'm not proud to say it, but my budgeting currently consists of eyeballing my checking account a couple of times a week, when I take out cash from an ATM, and making an imprecise calculation about whether I can afford a new pair of boots.
Mike's done more meticulous accounting than I have, but we've never tried to track our household expenses. No matter which of the three systems we choose, Common Potter, Independent Operator, or Sometime Sharer, we've agreed it's time to make a household budget.
I learned from my reporting that this can be the most contentious part of financial coupledom. Consider the power dynamics of a seemingly neutral item like a woman's haircut. One couple I spoke to, Deb, 33, and Brett, 34, are a Sometime Sharer couple who put their paychecks into a joint account, and then automatically divert an "allowance" for each spouse into separate checking accounts. Deb's salon visits are paid for out of the couple's joint account because even though her haircuts cost more than his, she and her husband consider them a work expenditure: She needs to look professional for her job as a marketing specialist, and her husband, a forklift operator, understands this.
Contrast that with Beth, a 40-year-old attorney, and her husband Alan, 39, who works for a cable company as a fiber damage investigator. (I've changed this couple's names at their request.) They have a Common Pot and Alan rags on Beth for spending too much at the salon. Beth, meanwhile, sees her hair as a professional obligation and is enraged that it's not earmarked in their family budget. You could say these two couples are just talking about a damn haircut. Or you could say that their divergent approaches reveal something far deeper about the way Brett and Alan feel about their wives' careers.
In the coming installments of this series, I'll dig into how couples like Deb and Brett and Beth and Alan chose their particular financial systems and figured out their budgeting, and how their choices fit into societal patterns. I'll talk about the apps, Web sites, and other technological tools couples are using to manage their budgets. As for Mike and me, by the end of the series, we'll decide how much money to merge and how to manage it.
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