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Two days after Christmas, my husband, Mike, and I were stuck at the airport in Los Angeles. Thumbing through a women's magazine, I found a quiz that was meant for engaged couples: It included all the things you're supposed to have figured out by the time you get married. At least three of the questions were about finances—budgeting and savings strategies. Mike and I had discussed precisely none of this before we got married. We flunked.
Oh, well. One of the main lessons I've learned from reporting on how couples deal with money is that this aspect of their relationship often evolves along with everything else. The progression often goes something like this: When they start living together, couples keep all their accounts separate, as Mike and I have. As the years pass and concrete commitments arrive—marriages, mortgages, babies—partners merge more and more of their resources. The data from my survey show this trajectory: About 60 percent of couples who had been together for less than a year identified as Independent Operators—they kept their money completely separate. For every subsequent year of togetherness, that rate dropped by 4 percent, until the eight-year mark. At that point and onward, no more than one in five couples stuck with strict financial separation, and after couples had been together for two decades, the rate dropped to nearly one in 10. By the time couples near retirement, almost no one remained in neatly separate mode. That makes sense: Are you really going to make your 75-year-old life partner pay you back for the money you sink into his angioplasty?
Mike and I have spent four years in stage one, as Independent Operators—and we're ready to move on. It's time to practice for making nursery school payments by merging some money now. In spite of my discoveries about the benefits of the Common Pot method, though, we are still wary of mergingeverything we each have. At the outset of this project, I didn't want to do that because of my grandmother's proto-feminist counsel; she always told me to hang on to my own money because money is power. But I realize now that for me, this decision isn't about that. Instead, both Mike and I are concerned about holding on to a different kind of autonomy. Here's one of the first quotes I read from a Common Potter who answered my survey: "My wife and I are one. There is unity in our marriage and this can only be the case when that unity is emotional, physical, spiritual, intellectual, and financial." To me, this sounds like a cult of marriage that subsumes the self. Mike and I would like to remain separate people, thanks very much.
Initially, we were put off by the Sometime Sharer method of having some joint and some separate accounts, because deciding which expenses to put in each basket seemed like a headache. But we've decided that it's worth the fuss. As much as neither of us loves discussing money, Autonomy With Benefits, as I've come to think of it, outweighs the potential strain and annoyance.
In this, we're more typical than I thought at the outset of my research. For decades, marriage rates have declined while cohabitating rates have risen; there are now 16 times more couples living together than there were in 1960. Yet moneywise, things have not changed much. The bottom line is that most couples who stay together for the medium to long term pool at least some money, just as they have for 40 years. I'm missing one nuance: I can't tell whether people are more likely now than they were in previous eras to be Sometime Sharers than Common Potters because I don't have the proper comparison data. But my hunch is yes. The Sometime Sharer method would be much harder to manage without modern banking technology, so it's hard to imagine many couples using it back in the day.
Let's say current trends continue, and even more couples cohabitate. Will the pattern finally change, as they increasingly tend to keep their money separate? Data from Norway and Denmark, countries with much higher rates of cohabitation than the United States, suggest otherwise.
Denmark has a similar rate of marriage compared with the United States, but a much higher rate of cohabitation. Yet a 2007 study of about 1,700 Danish couples found that they were less likely to keep their money entirely separate than American couples: Fewer than 6 percent of Danish couples were Independent Operators compared with more than 20 percent of the couples who took my survey. The authors did not distinguish between married and cohabitating couples, but it probably doesn't much matter, because as the authors of the study note, Danish couples who live together behave a lot like married ones.
Norway provides a greater potential contrast with the United States: The country has a higher rate of cohabitation but a much lower rate of marriage. But here again, a study of cohabitating and married Norwegians from the European Sociological Review showed nearly identical results to my survey: For each year a union has lasted, regardless of whether a couple is married, the odds of pooling income increase about 4 percent.
The lesson, then, is that in other countries as well as the United States, the longer couples stay together, the more likely they are to pool some money, and this is still true in places where people cohabitate more often than they do here. It is also good news. Research shows that when couples have children together, it can be a bad deal for women to keep their money totally separate from their partner's. What looks like increased independence bears a cost. "Children are seen as a woman's responsibility by many couples," says British sociologist Jan Pahl, the author of a study called "Individualisation in Couple Finances: Who Pays for the Children?" The answer to her question, Pahl finds, is that often women do, particularly when they make less than their partners. Regardless of how many accounts a couple shared, the women surveyed in a national study that Pahl analyzed were the ones forking over money for 85 percent of their children's clothes and 78 percent of their child care and school expenses. The men got to spend much more money on themselves.
For Mike and me, kids are a winking pinpoint on the horizon. When they come along, I suspect we will have a discussion about changing our strategy—and that we'll end up pooling even more than we will now.
The How-To Part: What Mike and I Decided
For the month of January, Mike and I have been keeping track of our individual spending. He's been tallying his expenses on an Excel sheet. I have an account at the personal-finance Web site Mint.com. In early February, we plan to sit down and look at our expenses together. We'll have a reckoning about what constitutes a joint expense and come up with a figure that should cover these expenses. Then we'll each contribute 50 percent of that figure. For now, we will put the remainder of our salaries into our existing individual accounts and keep our savings separate. I'll publish a follow-up next month with all the nitty-gritty.
I've already said to Mike that I think we should err on the side of putting too much money into the account. I'm thinking here of the Sometime Sharer couple I interviewed, J.P. and Brendan, who underestimated their expenses, overdrew their joint account, and fought about it. A recent New York Times article convinced me that budgets are like diets—they're impossible to stick with if they're too restrictive. I know that if Mike and I don't give ourselves a cushion in our shared account for Friday dinners out and taxis home when it's too cold and late for the subway, we're going to end up growling at each other over a stack of overdraft fees.
When I embarked on this project, I felt anxious about our decision—no matter what Mike and I chose, it seemed as if there would be some marriage or financial expert or women's magazine telling us that we were doing it wrong. Suze Orman and Dr. Phil would read this and demand a TV intervention. Talking to real couples gave us the pivotal details Mike and I needed to feel certain that we were making a thought-through decision. My readers provided the all-important long view.
And so the biggest lesson I take from this project is that we should all talk to each other more about our money strategies—the nuts and bolts of who pays for what, when. It's a cliché that talking about money is taboo, but I hope that shibboleth is evaporating. Every time I mentioned that I was working on this series at a party, I'd come back with a head full of stories about how a guy hid receipts from his wife or a woman refused to pay for her husband's cigarettes. If you're willing to ask, you won't just hear stories about financial bad behavior—you'll also learn how other couples negotiated their particular circumstances, and some of it will apply to your relationship.
To that end, I want to hear from the readers: What's the one piece of advice you would give a newly married couple about finances? Post your responses in the comments; I'll wade through them and create a poll so we can decide together what is the most important bit of wisdom to impart. I've been married for only six months, but here's mine: Never talk about money on an empty stomach.