by Christina DiMartino
How you and your spouse share and spend your money is a balancing act, and one that can either help to bond or cause tension in your marriage. Mutually deciding who handles what financial responsibilities, how to budget, and how to spend your combined money deserves serious consideration.
Christine F. Olinsky, assistant professor of Family and Consumer Sciences, Ohio State University, says that dividing up the responsibility for the decisions and the paperwork that make up the money side of a marriage isn’t exactly easy even for one-income couples. In a two-income marriage, it’s even more difficult. Second marriages can have special money management problems of their own, such as budgeting for child support, alimony, or visits by children from earlier marriages.
“Successfully meshing two styles of handling money doesn’t magically happen just because two people love each other,” says Olinsky. “It’s something you have to keep working on as the years go by."
“Every day there are dozens of little decisions to be made about money, such as whether or not to pay cash, write a check, use a credit card, or pay a bill, not to mention the bigger decisions involving savings and investments, tax planning, ownership rights, insurance coverage, and other matters with long-term consequences.”
Joint or separate?
Jean Chatzky, award-winning journalist, author and motivational speaker, says it’s not reasonable to assume that just because the two you tie the knot you all of a sudden become the same person. What you have to do is understand how you and your spouse are different, and how those differences are going to worry or stress your partner. You have to keep lines of communication open so that you both understand what is happening with the family pie.
Try both separate and joint accounts
Chatzky says there is a school of thought that says the more you merge your money, the more you trust each other and the marriage.
“I am not completely of that school, quite possibly because I’ve been divorced,” she says. “I am a big fan of both joint and separate accounts.
“The way this works best is if you come up with a household budget that the joint account will cover. It must include the amount you want to save for your joint goals, such as vacation, house, retirement and emergencies. Then figure out what equal percentage of both salaries will cover it, transfer that much in from the separate accounts, and leave the rest.
“And the bills covered by the joint accounts shouldn’t always be paid by the same person. One will gravitate toward these tasks, but make sure you switch it up at least once a year.”
Advantages and problems
The goal of the National Network for Child Care (NNCC) is to share knowledge about children and childcare from the vast resources of the land-grant universities. In her report for NNCC, Virginia K. Molgaard, family life specialist for Iowa State University Extension, says that although there are only two basic types of accounts—single and joint—there are many ways to put them together. Three models have been developed that depict the different ways dual-income families combine their earnings.
1. Equal share couples put an equal amount of their salaries into joint checking and saving accounts to cover the basic household expenses. The remainder can be saved or spent as each sees fit.
Advantages: Each spouse contributes to daily and long-term expenses. Each has some money to call his or her own.
Problems: When one spouse earns appreciably more than the other, this method can lead to resentment by the spouse who has less individual income.
2. Proportional share couples each contribute a percentage of their income to cover household expenses and joint savings. The remainder is his and hers to do with as each pleases.
Advantages: Both spouses are contributing to household expenses, while retaining some independence of funds.
Problems: A difference in the amount of income each person earns could cause resentment,
since the person with the higher income may have more “play” money.
3. Pooler couples combine all their income to use for both household and personal expenses, usually held in joint accounts. These couples retain an independent “allowance” of a set amount, helping them retain the feeling that all income is shared while letting each spouse make some purchases that are not accountable to the other.
Advantages: The work of each spouse is valued equally, regardless of income earned. This also simplifies household record-keeping.
Problems: The spouse with the lesser income may not feel he or she has as much to say in how the joint income is spent.
As your adventure in parenting children continues through the years, your family's style of managing money may need to change, with one of these models or a variation on a model working better during some times than others.
Here are some helpful books to get you and your spouse on track with money management in your marriage.
Christina DiMartino has been a freelance and assignment writer since 1985. She is a researcher, interviewer, writer, editor, and manuscript collaborator with a repertoire of clients from around the world.