An e-mailer asked a question that opened up a very interesting discussion for my wife and me. It was “I know you are married, but is the Net Worth for you only or for both?” My initial internal response was “Duh, of course it was for both of us. We are married, how could it be any other way?” But in reading NYC Money’s post about splitting the money in marriage, my eyes were opened. Check out this comment (not by NYC):
My wife and I also maintain seperate accounts. In fact, when she needs money she applies for a loan with me. I then charge her the appropriate interest rate and make sure she pays on time (late charges make a nice side income)… I see marriage as a business venture with my wife being the most important client. It?s cold but why mix love and money?
Of course, this is probably a bit to the extreme. This is how NYC Money does it (she is also under 30 and recently married) – they keep separate accounts overall, but know how much the other has. If there is a big purchase, they both send in a check for half. Many other people actually seem to do this. Is this the new thing to do? Here’s how Jose of Money and Investing does it:
We keep separate accounts, except for the running expenses like utility bills, vacations, and food. Large purchases like houses and cars are done independently. Each one should own whatever they have worked towards. We do not mix love and money.
Recurring theme about love and money. I must say, the idea of this is completely alien to me. Why wouldn’t love and money be linked if you’re spending your entire lives together? I know that one of my close married friends pays the whole mortgage and considers the condo they live in ‘His’ (not sure how they split other stuff). When I told my wife about it, she was equally incredulous. What happens if one spouse goes broke? Do you keep the love but make them eat ramen?
Here’s how we do it: One pot. Although I have various individual bank accounts (primarily for rate-chasing and bonus-seeking), we consider all our money as one. It doesn’t matter who pays for rent or dinner or shoes, since it’s all from the same source. We have no plans to change this… ever. Of course, great communication is the key to this, and well as relationships in general.
Of course, there are lots of reasons to separate assets. Maybe you’ve both been living independently so long that it’s really hard to give up complete control of your money. If you want to buy that new gadget with your own hard-earned money, why the heck can’t you?
Also, there is the ‘Money is Power’ argument. A man that makes a lot less than a woman may feel emasculated or lose self-esteem. A woman may feel the same. Personally, I’m like – the richer the better! =) Historically, I have made more money than my wife. Now, she makes more than me. In the future, who knows? We intend on being a one-income household when we have kids. That is, either we both work half-time, or one of us works full-time while the other one stays at home with the kids. If she ends up making twice as much as me, guess who’s changing diapers? Trip of Musing Money hasn’t earned income for five years now, and they seem to be doing well.
But hey – Different strokes for different folks, right? People can handle their money however they want, and I am not judging. There is no right or wrong if both people are truly okay with it. But what I do want to know from you couples out there is How do you do it and Why? Why do you keep everything together, some together and some separate, or completely separate? Tradition? Power? 50% divorce rate? Lack of trust? Individuality? Fear? Pragmatism? Enlighten me!
I just ask that you be honest! This is the internet, you can be completely anonymous.