Money in Marriage

Finance
Money in Marriage

Boy, did I choose a touchy/controversial subject to write about. But since this is my blog and I express my views I thought why not. Hopefully someone can take something away from this that can help in their relationships as it has worked well for us. Just to reiterate it is purely my views on this subject and I have no research to quantify the success of this approach.

But as it is I was in a lucky position on this one. My wife and I will be married 10 years by the end of this year. We met while we were studying and dated (is that even the right description) for almost 5 years before we got married. So, we knew each other and our money habits quite well. The other lucky thing is we entered marriage with basically nothing. This is a good thing as we had some assets and savings, but more importantly we had not debt (luckily no student debt). The first debt we incurred was the purchase of our first home a 2-bedroom apartment. There was also a small loan for the transfer costs, but we repaid it in 3 months as the interest rate was crazy.

Our Approach

Just looking at my friends and the ways they treat money in their marriages there are various approaches. I have friends that strictly work on a; my earning are mine and yours are yours. Then I have friends who had a prenup, as one entered the marriage with a lot of historic family wealth which changes the way going forward. I have friends where one spouse gets an allowance from the higher earning spouse. Then there are friends who only got married recently and trying to figure all of this out as both spouses has worked for more than 10 years. Naturally as anyone with a bit of self-pride I believe our approach is superior. It has worked well for us so far and have made most financial decisions quite easy.

Our approach is everything is ours. Very simple as it allows us to trust each other fully when it comes to finances. Trust is the foundation of a successful relationship. Yes, there are things each of us are stronger in, for example me handling investments as I enjoy it and are passionate about it, while my wife does the bookkeeping. But holistically everything we have is ours and if one of us wants to buy something we do it. For big decisions we discuss it and make decisions collectively.

Why this Approach?

This is counter intuitive and not the way human brains are wired. But here are some reasons arguing for this approach and why it has worked for us in our experience:

  • Your original marriage was built outside of money (in most cases) in order to be a team, not to increase accumulation of wealth. You were attracted and had butterflies in your stomach to see your spouse again for other reasons (let’s leave the details here). It should therefore be bigger than money. It comes back to the mindset of not everything you earn is yours, it is not an issue to trust your partner with your finances if you take this view. If you do not have any trust it is something different which should be addressed. I believe that you should take the view that you already have everything even when you strip out the money.
  • Marriage cannot be transactional. If you always owe your spouse something you can never be on the same level as them. It is like having a romantic relationship with a bank who you have a large loan with. This gives one person more authority than the other which is unhealthy and shows in other things as well.
  • This might be a weak reason compared to the marriage encompasses everything but it does make life easier. If everything is ours then it is easy once kids come along and their bills need to be paid. It made it easy when my wife took a pay cut to go work half day. It is also far easier to track and budget expenses. If you do not have to remember all the pluses and minuses on the family financial statements because you do not mind it makes marriage more care free.

Other Tips

As I have almost 10-year experience in this daunting field called marriage I will list a couple of things I learned along the way. Hoping it can assist people reading who are probably quite like-minded and financially savvy.

  • Buy into the plan. I am sometimes a frugal bean eating person at the expense of myself. My wife on the other hand has great financial acumen and buying habits and therefore keeps me a bit more on the middle ground in order to run a working household. Although we are a bit apart when it comes to spending habits we buy into the same plan and long-term vision for our finances. It is important to discuss this up front and regularly.
  • As a follow up on the above, give each other breathing room (I do however suck at this). If you already have a decent savings rate give each other some space on purchases. Rome was not built in a day and your financial goals will also not be achieved in a month.
  • Have a budget, this point is already laboured but important. It provides visibility of your financial situation, there are some really good blogs on budgeting which provides some great resources.
  • Plan ahead. If you are not married yet discuss your approach to your current finances and how it will be once married. Better to have that conversation now, before you put a ring on it.

What is your approach to money in your marriage/relationship?

Always grow your wealth for tomorrow while being content with your wealth today.

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