Far too many couples are not married financially. Many are married legally, spiritually, emotionally, romantically, sexually but not financially. This is a recipe for disaster. It is conflicting when couples can be sexually intimate but not financially intimate. It makes you wonder which one is more intimate – sex or money? For many people, it seems as though having money is more intimate than having sex.
Here’s how many couples do it: They split bills. The husband pays the mortgage or rent, and utilities. The wife pays school fees, food and health insurance, etc. There is little negotiation and couple harmony with this method. Although this method is popular among many marriages, it is still causing more pain and dysfunction and very little happiness. Psychologist David Olson, in his book with Amy K. Olson, “Empowering Couples: Building on Your Strengths”, states, “Research shows that couples in which partners feel they have equal control over how money is spent are more satisfied with their relationships than couples in which one partner tends to control money matters.”
Many financial specialists have written about this topic and they all come to the same conclusions – splitting bills is not the best thing to do. Hanna Horvath, a certified financial planner, wrote in her article, “They may share love, but many couples don’t share money”, “Some couples share everything, from homes, to clothes, to pets. But there’s one thing many don’t mingle: finances.
“In fact, one in five people keep and manage their money separately from their partners, according to the first annual ‘Policygenius Couples and Money’ survey. An even greater percentage (24%) don’t share any major financial accounts, including a checking, savings, credit card or mortgage account, while almost 30% of couples don’t even know each other’s salaries …
“Our survey supports this trend: 54.3% of couples who live together without kids manage money separately, while only 17.4% of couples who are married without kids do.”
Why do couples keep their money apart? Why do they believe that splitting the bills is the right thing to do? Here are some of the reasons couples do this:
• It is the family culture. Children observe mom’s and/or dad’s behavior. Children are taught that money is personal and private. Men are to be providers/breadwinners of the homes. Women are to keep their money for themselves.
• It is the national culture. It is based on a patriarchal view of governance. The man is to be in charge. It is not about gender equality.
• A false concept of independence or the refusal to become truly interdependent with a romantic partner. There is little or no understanding about being partners, or companions in marriage.
Here are a few dynamics that make having truly a joint couple financial plan very difficult:
• The couple moves in together too early without understanding how they will operate financially.
• Before the current relationship, a partner had a child(ren) for a previous partner(s) and does not discuss the finances with current partner.
• A husband or male partner has a baby for another partner during the marriage and decides to financially support the child without discussing with his partner. Although these dynamics are difficult, with the right approach, a couple can become unified and harmonious in these situations.
In the article, “Top 6 Marriage-Killing Money Issues,” financial expert James McWhinney gives these six behaviors as the top reasons for money problems in marriage:
• What’s Mine, Yours, Ours: Bills are divided and salaries are kept secret.
• Debt: An individual may have debt but refuses to disclose or discuss together with partner.
• Personality: How one uses money and what is top priority in spending.
• Power Plays: Either the man has to have the most money or who has the most money is the most powerful.
• Children: Research indicates that having children can cause the greatest challenges between couples, especially matters of finances.
• Extended family: In-laws, parents and grandparents can really cause financial problems in marriage. They can often make unreasonable demands of a spouse, insisting their needs are more important.
To further explain a few of these points, here is a quote from James McWhinney, “When the bills have been covered, each spouse can spend what they have left as they see fit. It sounds like a reasonable plan but the process often builds resentment over the individual purchases made. It also divides spending power, eliminating much of the financial value of marriage, as well as the ability to plan for long-term goals such as buying a home or securing retirement … Bill splitting also pushes down the road any planning and consensus-building about how financial burdens will be handled if one spouse loses a job; decides to cut back on hours or takes a pay cut to try out a new career; leaves the workforce to raise children, goes back to school, or cares for a parent; or if there’s any other situation in which one partner may have to financially support the other.”
What is the better way for financial planning for couples? I call it the harmonious financial couple plan. Here are key financial principles:
• There are absolutely no secrets. It is total self-disclosure. This includes salary, salary increases, investments, dividends, bonds, bonuses, savings, assets, liabilities.
• All financial matters are a joint responsibility. That means every asset and liability are under the governance of both partners. This includes assets and liabilities incurred before the relationship. This means a prenuptial understanding is imperative. It also includes property, outside children, funds in a Swiss bank, savings for grandma.
• The couple should plan together. Create a couple/family budget that includes all the income from both partners.
• For couples with significant assets before marriage, have a prenuptial agreement or marital contract. Have an understanding of all assets and liabilities and how the couple can work together with them. This will include the children for another partner(s) and apartments owned and on rent, large personal savings, investments, etc. I encourage all couples to become financially one in marriage.