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Are You Aware of Your Joint Financial Destiny?

I’ve mentioned before that I’m smack in the middle of the wedding [1] years. I went to my first friend wedding in 2008 and have been to 3 or 4 weddings a year since 2010, with more on the way. Most of the time, my financial focus when it comes to these unions is about just how much it can cost to attend, be in, or throw [2] a wedding. 

While I’ve shared my advice on marital finances a time [3] or two [4], I’ve never really expanded on my personal thoughts on joint money management.

source: stevendepolo [5]

It’s a well-documented fact [6] that married or otherwise long-term-committed couples have three options for handling money: keep it all together, keep it all separate, or mix some but not all. Less documented is what happens (or should happen) with any joint funds after the commitment [7] is made.

My View on Joint Finances

As a proud graduate of an all-girls’ high school, I’ve been known to have an opinion or 50 on what women can and should do. At the very top of my list of life goals is being able to support myself. This isn’t the same as wanting to support myself or having to support myself, just a well-thought-out desire to have both the mental and emotional wherewithal to handle my own wants and needs, combined with the financial capacity to do so, should the need arise.

Despite my strong feelings about being able to support myself, I’m ultimately somewhat of a traditionalist. My parents have one checking and one savings account, and I intend to do the same with my own husband someday (or at least keep the spirit of their arrangement – I’m not above multiple accounts to take advantage of free money [8]!). I’m good with money, so I’ve always kind of assumed I’ll handle most of the day-to-day tasks like bill paying, account reconciling, or free money earning. But I’ve also always assumed that we’ll both have input on the big things, like what we’re saving [9] for or how we’re investing our funds. I intend for him to know and understand where our money is held, and why it is where it is. I assume I’ll handle the money, because I’m both good at and interested in it – but if he wanted to do it, I’d let him. If he was the one signing the checks (or the 2012-equivalent), I’d still expect to know the details like where, why and how much. In short, I believe that shared finances should be approached like any other aspect of a marriage or long-term relationship: as a partnership. As long as we’re meeting our (joint) savings and debt-repayment goals, I don’t see a need to micromanage individual spending. I don’t anticipate having to hide or justify purchases to him, and wouldn’t expect him to do so to me. I know couples fight about money, and I’m not saying we won’t – but I am saying that I expect us to approach our finances rationally, maturely…and together.

What (Apparently) Really Happens

Why am I telling you all of this? Because a recent New York Times article [10] essentially asserts that my (idealistic?) view of shared finances simply doesn’t happen. What’s more, it seems that the default arrangement strips the female in the relationship of all financial autonomy and knowledge – often with her consent. In the author’s unscientific poll of her friends, she found that only one of 44 female friends managed her family’s joint finances. A few kept their finances totally separate from their husbands. But the vast majority pooled at least some money with their husbands and then let the husbands manage the joint funds completely independently. Many kept some separate money to spend as they wished – not because it was freeing, or easier, but because their husbands might disagree with the spending (even if they could ostensibly afford it). What’s more, half admitted to not knowing the terms of their mortgages and a few even admitted to not knowing their total household income.

Needless to say, I was shocked. To me, it’s common sense that each partner should be aware of the financial “biggies” – I would include household income and fixed expenses, total amount of debt, interest rates on big things like houses, cars and student loans [11], and savings account balances in that list. As explained before, I would expect that each partner would be responsible for his or her own purchases, and allowed to make them without explanation (within reason). I’m not discounting arrangements like an allowance for each partner – if the family budget can truly only sustain $25 a month for non-necessities, obviously the couple needs to put a mechanism in place for sticking to that number. But if each partner is allowed to spend $200 a month, or has no spending limits, how one partner chooses to spend that money should not really be up for judgment by the other partner.

Moving Forward: Take Control of Your Financial Destiny

I’m using this article as a call to action – for myself, my friends and YOU. Whether you’re male or female, make the commitment today to make yourself aware of your joint financial situation. If you have made the decision not the merge any funds, that’s ok. But if any part of your financial lives are intermingled (savings, debt, even insurance [12]), make sure you understand what’s going on with all of your joint funds. No partner should take all of the financial control in a relationship. And no partner should give it away just because the other one wants it. I understand that it’s easier for one person to handle the day-to-day. But the big stuff has to be a joint effort. Making it anything else is a disservice to all involved. Things happen. Divorce, sickness, death…even work trips that get extended right before the mortgage is due can wreak havoc if the partner left behind doesn’t know what he or she is doing.

So your homework for tonight is this: sit down with your partner and copies of this article and the original Times article [10]. Discuss your attitudes about money and shared control of shared funds. Come up with a plan to empower both people going forward, and make a commitment to stick to it.

Do you have a sound strategy for making sure you know what’s going on when it comes to your joint finances? Are you shocked to hear that so many women have no idea? Share your thoughts in the comments!

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