Few people talk about money during courtship — it’s not romantic. Even after marriage, money remains an awkward topic. In good times, it is a neglected subject. In troubled times, money can be a point of stress.
While money itself is not often cited in divorce proceedings, it has an uncanny ability to amplify the issues plaguing a difficult relationship.
Explicit and detailed pre-wedding money discussions are uncommon, but silent and implicit discussions in the form of family negotiations, wedding receptions and other elaborate ceremonies can be deafening and have a lasting impact.
The financial stress of a couple’s efforts to recover from costs of the marriage ceremonies can cloud financial arrangements throughout their marriage.
As the newlyweds recover from a lavish wedding or just learn to survive on their own incomes, they confront many questions, such as: Who pays the rent and the EWSA bills? Whose relatives can they support financially? How much can each spend on social drinks with friends? Who should pay for accommodation?
How should they manage differences in salaries? How should domestic responsibilities be shared? How much should they set aside for aging parents? Which schools can they afford for their children? Who gets first dibs in further education expenses they pay for jointly?
If you discussed these and similar questions before you married, you have the Wisdom of Solomon and the courage of David before Goliath. It is a difficult discussion to have because each person wants, especially then, to be seen as generous.
If you still believe all money-related decisions are the sole responsibility of one spouse (traditionally the man), it’s time to wake up. But if dealing with money is still a work-in-progress, as it is for most couples, consider reducing the stress it can cause in your relationship by explicitly discussing the following:
Financial baggage: No two families relate to money in exactly the same way. In one family, money matters were discussed over dinner; in another, money was the sole prerogative of one parent. One might have experienced overt arguments over money; the other absolute silence.
You need to acknowledge your own financial baggage. You can’t change the past, but you can change negative learned behaviuors (e.g., secrecy) and build on positive influences (e.g., a healthy savings culture). Let your partner know what influences your decision-making process.
Full disclosure: Before and during your marriage, commit to fully disclosing ALL your personal assets and liabilities. Tuition fees for a child born out of wedlock are not an off-balance sheet item. Swap bank statements.
Full disclosure includes social insurance contracts. If your eldest siblings paid for your education in full and there is a family expectation that you will do the same for your younger sibling, include it in your disclosure discussions.
Differences in income: Perhaps the most important potential source of stress arises when partners have significant differences in income, with the actual and perceived privileges, rights and obligations this bestows on the higher-earning spouse.
This difference impacts decision-making for major expenses, sharing essential and discretionary costs and the style of social engagements and commitments. Some couples decide that the lesser income should be used for their joint discretionary pleasure or the sole use of the partner earning less.
Others commit that money to a single family expense; yet others share all expenses 50:50 regardless of income. It is more efficient to focus on total household income and treat it all as joint money. Focus on the total income and prepare a single family budget — irrespective of the source of funds.
Joint accounts: There are as many divergent views on joint accounts as there are marriages. Personally, I think that as long as a marriage has a single balance sheet and income statement, the number of accounts is only an administrative convenience.
If a joint account makes it easier to track expenses or qualify for a mortgage, then so be it. For this reason some families choose to pool some or all of their incomes into one account. At a minimum, however, maintaining individual accounts is still important.
Discretionary funds: Irrespective of anything else, each partner needs access to an agreed amount of discretionary funds. In the same way companies operate petty cash accounts, individuals need funds they can utilise as they please — for birthday gifts, random acts of kindness, personal hobbies and other activities that we all need to maintain our individual characters (which attracted our partners in the first place).
Of course, the appropriate amount of discretionary funds is unique to each family, but it should not exceed the percentage of total income set aside for investments and savings. How these funds are used is a different issue.
To what extent should irregular income from business ventures be included in the household finances? If one spouse is doing a side business out of his/her ‘discretionary funds’, where should the proceeds go?
How to handle money within marriage is a topic with no universal rules. Each financial contract between two individuals is unique. Pick the suggestions that work for you and discard the rest.
There is only one marriage that matters and that is yours! Don’t concern yourself with the Bandas next door who just bought their third car; the Chabotas up the road who are going to London on vacation; or the Simasikus across the road who are expanding their house for the third time. Find a formula that works for your marriage and stick with it.
Ps… this article contains general advice about financial discussions in marriages, and is provided without any representations or warranties express or implied; it is not intended to resolve any marital disputes, financial or otherwise.
You must not rely on the content of this article as an alternative to professional marital advice from your pastor or other professional marriage counsellor.