Money matters

I've been reading with interest this Slate series by Jessica Grose about how couples manage their finances. She describes three different types of couples, whom she dubs "Common Potters" (completely merged finances), "Sometimes Sharers" (some joint money, some separate), and "Independent Operators" (completely separate).

JW and I are dedicated Common Potters. We got married young enough that neither of us had any significant assets individually, but even if we did I'm pretty sure we would have merged finances without a second thought. The way we see it, once you're married, there's no more "mine" and "yours". Everything is ours, and every financial decision we make affects our entire family whether it's buying a new house together or one of us spending $3 on a cup of coffee instead of putting it into savings. This means that neither of us cares about disparities in our incomes -- since everything is family money, every bit helps no matter who's earning it. The shared approach works well for us because we have similar, fairly conservative, spending habits, and can trust each other to spend and save appropriately. Right now we have plenty of money. We've had times when we've barely scraped by. But we each adjust our discretionary spending accordingly and make saving a priority. We're also each more likely to scrutinize our own spending habits than each other's, and cut back if we feel it's needed. As a result, we don't spend lots of time talking about money. We check in with each other occasionally about our long-term goals and strategy, and each month when our main credit card bill arrives we briefly discuss our spending for the month and whether we should be doing anything different.

I can understand why others choose different approaches, particularly if they have different spending habits, conflicting priorities, or some history that makes them want to maintain more independence. What surprised me when reading Grose's series was how complicated the other methods seem to be. I always thought that the alternative to shared finances would be to either have a joint account for joint purchases and individual accounts with some agreed-upon amount of money deposited each month, or to have separate accounts and agree on some fair method of splitting shared costs. As it turns out, there are myriad ways of arranging your finances as a couple.

The most surprising part, for me, was the complexity of deciding which are shared costs and which are individual costs. I always thought it would be obvious that things like housing and utilities would be shared, and everything else would be pretty much separate. According to the series, though, couples with separate or semi-separate finances go through regular negotiations about whether things like haircuts and maternity clothes should come out of the shared budget or the individual budgets. It would drive me crazy to constantly be negotiating about our finances in that level of detail. I feel like I'd have less independence, when the point is to have more. (Of course, you could make it simpler by skipping the negotiating and deciding in advance that by default, most expenses will be individual and only certain predefined expenses will be shared, or most expenses will be shared and only truly discretionary expenses will be individual.)

I also, for some reason, assumed that in a "Sometimes Sharer" situation, each person would get an equal amount for their "allowance", but it seems most people contribute a fixed percentage of their income to the shared pot and keep the rest for their individual account. It seems weird to me to build an income disparity into your relationship. But I can see how it would work for couples who want to maintain their financial independence, especially if they're older and more established in their spending and saving habits.

There were some unsurprising conclusions in the series -- for instance, the longer couples have been together, the more likely they are to share some finances (the author points out that few senior citizens would insist that their life partner repay them for money contributed to the partner's angioplasty bill), and couples with kids are more likely to both share some finances and to be more successful long-term if they share finances.