I realize that this is pedantic, but it drives me nuts when people mention that 401ks are interest bearing. Please, unless you've specifically chosen only very safe, interest bearing accounts for your 401k (like a guaranteed income or money market account), your 401k will not pay you interest. Most accounts do not invest in just those vehicles. 401k accounts mainly make money by the underlying value of assets rising, receiving dividends, or by selling assets that have risen in value in some form of rebalancing. It's important that you're accurate when writing an article about finance.
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This may not work for you, but my wife and I have been together for 13 years, married for over 11. Fights over money have been minimal, mainly because I have always worked, she was in college when we met and we also have had children, all together she has held down full time employment for about 4 of the 13 years we have been a couple. We treat all of our money as OUR money. We share a bank account and do not bicker over who contributed what. I am the one who is better at budgeting and paying bills, so I do spend some of my free time every few days playing accountant. We have had our ups and downs, there have been times I spent/borrowed money I would not have because my wife wanted something. She is worth every dime to me, and she is a hard worker who has contributed to our life with her income and her devotion to our family. If money is a big issue it is generally a sign of something else. I know this sounds crazy to some of you, but if the idea of valuing your lover enough to share and trust each other with money, then it is not worth being with that person. Money habits shine a light on who you are, I would not want any of my kids to grow up and be with a selfish/irresponsible person.
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I & my wife have never had a budget. Reason: we are both out of the same frugal mold, buying nothing unless it is needed. I trust her; she trusts me. The first years of married life we lived hand to mouth with very little; I even qualified for food stamps because we were dirt poor. We eventually paid off our debts. We use a credit but pay it off 100% each month. We've been debt free for several decades and have managed to save and accumulate a net worth of > $8M.
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One of the best pieces of advice, and I'm not sure where i got it from, was to have an indepth financial summit with my boyfriend before we moved in together and long before we got married. At that summit we each brought a printout of our credit report, W-2 stub and records for all our assets and debts. We each had a full and open understanding of each other's financial history and present status and we talked about a plan for sharing/dividing expenses as we moved in together and we talked about our habits and goals in an open and honest manner. It wasn't very romantic, but I knew I was getting in a serous relationship with a man who, while not great at the day to day aspect of paying bills, shared my goals for financial stability and would work with me and not against me.
After we got married we paid off all our unsecured debt in the first year of our marriage and we did so by having a plan and meeting regularly, each month, we had a spending plan, a debt killing plan and an allowance system. After that, our monthly meetings became less frequent, but we still talk about a yearly plan each year and we talk frequently throughout the year to effectuate that plan. We went from having a small net worth when got married to having a $2.6 million dollar net worth 10 years later. We did so by avoiding credit card use, prioritizing savings (401k, IRA, regular savings) before any other expense, paying off our house and not upsizing when our friends did.
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@Sammy - Wow! This is amazing! Congratulations. I totally agree with you. It is important to know your partner's financial health before moving in together. As you said, you knew your partner "would work with me and not against me." I think it is so important to be on the same financial page before becoming seriously involved. Good for both of you for doing the hard work.
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I couldn't agree more, Sammy, and I appreciate your comments about starting this conversation early in the relationship before getting serious; even if those conversations aren't glamorous or comfortable. In fact, they shouldn't be at first, but with transparency and openness, my guess is they would get easier with time, as you either come together to share goals and challenge each other to meet them...or you recognize early that perhaps this is a symptom of a larger issue. It's difficult to speak openly something we've always been taught to keep hush hush - but as an adult, I've found these conversations to be quite liberating, and eye-opening - for better and for worse. I just can't imagine NOT having these discussions prior to one of the most important financial agreements of your life.
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No mention of how couples blend or don't blend their money. My husband and I have joint everything and are beneficiaries of each other's work assets. Joint accounts make the conversation (in our case anyway) a little easier because everything is visible. There's no way to hide a purchase, receipt or any nefarious activity. It helps that we talk about major purchases and can calm mostly me when things seem out of control. If the money is joint, there's a shared commitment to spending, saving etc.
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Most of our money is in an ours account and we are both beneficiaries on each other's retirement and other accounts. But we each do have an account for day to day spending that is not joint. We have found this works well for us. I keep close tabs on our joint account since I am paying the bills. The amount in our his and hers accounts is small.
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"Money is an intimate subject, and we’re coached from an early age to be secretive about it. Revealing your finances also means losing some autonomy. But while sharing this information may make you vulnerable and accountable, you’ll also gain a new openness in your relationship."
So married couples routinely hide their finances from each other? Such relationships are not already "open"?
My wife and I started dating in high school, and got married after we finished college together. I was worth $0, and so was she. Money was, and never has been, an "intimate subject." How else would we know what our food budget was, or when we had enough money for that first car, or enough savings to start house-hunting? Or, years later, determine how much we could pay for our children's college education?
We have only joint bank accounts, and 1 checkbook. We discuss in advance any non-routine purchases (well, except birthday/anniversary presents), because that's how we started out, and it still works well. People who feel the need to hide things from their life-long partners have much bigger marital issues than finances.
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It can be hard to move from coveting individual desires and attendant anxieties about being preempted by the other, not so much toward compromise--with its implicit suggestion of renouncing individual wants--but toward building the new entity, the couple, with all its emergent needs and desires.
Please don't even think about getting married. Money is as intimate as sex, maybe more so. If you do not trust that person enough to share all, please either walk away or start realizing you need to walk more toward them.
Don't marry anyone until you have serious talks about the big three: Kids, sex, and money.
11
dear wife and I are money opposites. that distasteful feeling I got observing her spending habits I realized over time was my own own problem. we place value in different degrees on different things. over time I've leaned into her way of thinking..against my own grade. in doing so I've come to appreciate her point of view. I think she's recognized this effort and rewarded it with an appreciation for mine. we've adopted practices that honor both money personalities and have been better off for it. I found myself in a Tesla store the other day. Of course I didn't buy, but I didn't get queasy either.
10
You don't even bring up financial inequality, the biggest problem in relationships.
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Marriage is a partnership. There is no financial inequality. Whatever money we make is OUR money, not hers or mine.
1
Before we got married, we split the joint bills via a rough pro-rata. I paid 2/3 and he paid 1/3 since I made more than he did. Once we got married the issue of dividing bills went away. We have set up our finances so we both max out our 401k at work and our IRAs as well, that means that a big chunk of my husband's pay check goes right into his retirement savings and the bills are paid with my earnings but it works out that jointly we have significant retirement savings and that benefits both of us.
I agree but I think the answer to Mr. Hamilton's comment is also relative to age. When a couple meets later in life, there's likely to be more of a "my money and your money" attitude. Actually, my hubby and I are like that as we had made our "fortunes" by ourselves before we met. Because we shared this same attitude about money, we felt that it also made sense to have "your bills and my bills". We just came up with a split we were comfortable with. We don't even have money talks or arguments, going on 15 years together. There's no "one-size fits all" solution. The best solution is the one you don't argue about.
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