Money and Marriage

Dear Engaged Couples—Anxiety in marriage often comes from money woes.  Historically money is the issue that couples fight about most.  I’m not sure the rise of dual income marriages (and most are, today, even in families with small children) makes any difference .  If anything it may make finances more of an issue, since finances become more complicated.  “How do we slice the pie, when we don’t even know how many pies we are talking about?”In what appears below I am borrowing heavily from an online unpublished thesis by Wanda S. Mowry, University of Nebraska.

Before you marry, you and your beloved should have a sit-down talk about whether you are going to have one joint account,or  a joint account and two separate accounts(basically three accounts).  Here are the options—if you think of others, I would love to hear about them.

One Joint Account for your married life?

One Joint Account:  On the face of it, the one joint account may seem simpler to deal with than the other two scenarios listed below.  There is less paper work, not so many checkbooks floating about the house,  and there is the warm and cozy feeling that yours and your spouses lives really ARE shared.   Downside, is,if the marriage goes south, one or the other could take all the money and run (not something you want to think about now, I know) and if one of you dies ( a sad prospect, too, when you aren’t even married yet)  the other will not be able to get immediate access to any funds.  The other problem with this way of handling your money is that resentment can escalate. Either the higher paid spouse may resent carrying most of your combined living expenses, or the lower paid spouse may feel like he/she does not have rights to the pooled assets:  “Gee, I really need a haircut, but I don’t want to dip into our checking account, without asking permission.”  It is suggested, that in this scenario, that each half of the couple should receive an allowance, in other words, play money.

 

 

One Joint Account, two separate , equal share accounts:  To my mind this works best if each of you have salaries that are close to the same amount.  You each agree to put, say, $900 a month into the joint account and then the rest stays in your separate accounts.  If one of you gets a significant raise, however, resentment can result.  “I’m getting a new car with my raise.  Sorry you still have to drive that 1990’s dinged up gas guzzler.”  Also, this is the kind of arrangements that roommates make, so you might ask yourselves if you are really honoring your commitments to each other.

One Joint Account based on proportionality, two separate accounts. In this scenario, the separate accounts you maintained before you married stay the same, but you each contribute to a third joint account based on your income.  If one of you makes $60,000 and the other $30,000, then it stands to reason that the one who makes $60,000 will contribute twice as much as the other spouse to the joint account. So, if your joint living expenses per month cost $1800.00, one puts $1200 in the joint account and the other $600.00. 

That’s enough to get you thinking and planning, I hope.  Bottom line is, marriage is a life-long commitment and extends way beyond the wedding and the vows.  Daunting?  I’ll say.  but you love each other, right?  Good for you!

Have that sit-down conversation SOON! Happy Wedding Planning!

Your Wedding Preacher for Hire

    Also check out:  http://www.dailyfinance.com/2010/04/21/smart-money-advice-for-couples-who-cant-manage-their-money/