New Money Rules for Couples
Postnups, financial three-ways, paying your spouse for doing laundry…. More and more couples are devising their own, sometimes wacky money systems. How does yours compare?
By Virginia Sole-Smith
Nothing makes me feel more overtly "married" than when I open up my wallet to pay at Home Depot and pull out the shiny blue debit card labeled, in big block type, SHARED. My husband, Dan, broke out the label maker two months after we got married to distinguish the cards linked to our joint account from the identical blue debit cards we use for our separate personal checking accounts. (And in the rush of newlywed excitement, it didn't occur to him to use a more discreet font size.)
We've decided not to pool all of our money the way our parents did. Instead, we subscribe to what Manisha Thakor, founder of the Women's Financial Literacy Initiative, dubs "The Financial Three-Way: Yours, Mine, and Ours." For Dan and me, the logistics work like this: We deposit our paychecks into a shared checking account for joint expenses like the mortgage, groceries, and date nights — then transfer an identical amount of money into each of our individual accounts to use however we please. (Mine goes to pedicures, dinners with my girlfriends, and last month, a speeding ticket. Oops.) The system works because we earn roughly the same amount, but when my income dipped last year, I took a little less "fun money" to keep things feeling fair.
This plan would've been hard to pull off in a world before online banking (or label makers), but technology isn't the only reason couples are reinventing the traditional "one pot" approach to marital finances. As people marry later — the average age has drifted from 20 in 1950 to 26 in 2010, for women — we tend to arrive in marriage-land with separate financial identities that can be tricky to merge. And since 44 percent of people now move in together before marriage, many maintain their status as financial roommates even after getting hitched. In fact, one fifth of women in a recent REDBOOK poll said they keep their money totally separate from their partners, and nearly half have some cash stashed in an account only they can touch.
Some pairs, especially those in second marriages, keep money separate out of necessity. "People may have lingering debt and they don't want their new spouse to be responsible for that," says Linda Lea Viken, president of the American Academy of Matrimonial Lawyers. She's seen an uptick in recent years of couples who want postnuptial agreements (just like prenups, only after you're already married). "A spouse may get defensive and think, We're together, everything's great, why are you rocking the boat?" Viken says. "But even if you don't put it all in writing, it's important to hash out your money issues now so you're both clear on what's shared and what's not, long before the worst-case scenario happens."
Yet even top financial experts can't agree on how to hammer out the details. Money maven Suze Orman would approve of my three-way approach: She advises newlyweds to open a shared bank account and credit card to manage the household stuff, but also to have separate accounts so each partner maintains a degree of financial independence. But Washington Post personal financial columnist Michelle Singletary has advocated for the "one pot" plan, calling separate finances the "selfish way to go in marriage."
Clearly, the real experts are you and your partner, and it's critical to find an arrangement that suits your exact situation, as pairs who bicker over bills once a week or more are 30 percent more likely to get divorced than those who squabble about it less, according to research from Utah State University.
Need a new system of your own? One of these couples' wildly different setups may work for you.