Be an island. Then be a peninsula.
Posted by Gail | Filed under Getting Married?, Money & Family
I meet people all the time who want to beat me up because I advocate financial independence within couples. “Com’on Gail, marriage means you have to be a team.” “Yeah, it’s about trust.” “Just because you’ve been divorced three times doesn’t mean we’re all headed that way.”
Y’know what, they’re all right. Every one of them has a point. But nothing they’ve said has changed my mind. I believe with all my heart that to be strong as a couple, you each have to be capable of standing on your own two feet. You have to be an island. Then be a peninsula.
Being on the same team means you’re going to set your goals together and help each other meet those goals. If one of those goals is to have a family, then together you have to decide how you will provide care and money to take care of that family. If one of you decides to stay home, that doesn’t mean the money-maker gets to make all the decisions about how the money gets spent or abdicate home-care responsibilities. But so often, that’s exactly what happens.
It also often happens that the non-working partner ties themselves completely to their mate financially. They share a bank account; there are no individual accounts. They share credit. One may even give up his or her financial identity completely. Hey, I’ve seen it. And it isn’t healthy.
I’m not saying your relationship is sure to bust. I am saying that to be good for each other and strong together, you each need to be taking care of the money – individually and as a team – and you each need to be independent.
You won’t both always want the same thing at the same time. If one person has more power in the family – financial or otherwise – the other’s needs will be swept aside. Not good for long-term contentment.
You must each be clear about what you need, want, expect from your relationship. And it can’t just be clear in one guy’s mind. You have to talk about it, negotiate the gray areas, come to a happy place where you’re each getting some of what you want.
Being an island isn’t so bad y’know. It is scary for some people. That idea of independence makes some people want to duck and hide behind words like love, and trust and honour and team. But independence doesn’t negate any of those things. It enhances them because each and every day you’re choosing to be together, not defaulting to togetherness because you’re trapped.
Once you see yourself as independent you can then talk about how you enrich each other’s lives. You’ll talk about what you’ll do to make sure you have each other’s backs. And you’ll listen to each other because “together” isn’t the default. It’s what you get by acting like a team. Yup, now you’re a peninsula.
June 16, 2011 at 6:59 am
A post with so much truth in it. I have a couple of girlfriends who are on the cusps of giving up their good paying careers to stay at home (permanently) with their first and subsequent babies with no back up financial plan. Add to it the “need” for a larger house and the stress is starting to show on their respective spouses’ faces. “Everything will be alright. We’ll figure it out. It’ll all be worth it.” is what I’m hearing a lot these days.
June 16, 2011 at 8:03 am
This is very true. We’ve been married for over a year, and before that lived together for almost three years, and we always kept everything separate. Many people, our parents included, kept asking why we didn’t have everything in one account, but I think we both had to know we could trust each other with all the money before we put it in one pot. After realizing we are both savers, we both enjoy working with a budget, and we both let the other know what we’re buying beforehand, only then did we join the two accounts into one. I think it works well for us because we do work together as a team and know all the finances, so there are no surprises.
June 16, 2011 at 8:08 am
Both my Hubby and I came from families that divorced and remarried and divorced (and once more for him). We are in love, we will be together forever, we’re saving for our kids’ education and our retirements but we have our own bank accounts.
@ middleaway: your friends are about to learn some hard lessons. I stopped working to stay home with the kids (a mutually agreed upon and financially planned for decision), I also got very sick. Add to that the loss of identity that my career had given me and it was a long road back to balance.
June 16, 2011 at 8:14 am
Financial independence is so important. Each partner needs to have an individual account and establish personal credit. A household account should be joint and both people need to know how to handle the bills and to take part in the budgeting and planning. A marriage/partnership works best if each person is able to be strong and independent and work to the benefit of both, not when one person is in control and the other is not actively involved in decision making but ends up going along with everything because of lack of options.
June 16, 2011 at 8:33 am
I see so many people (well, realistically, women) jump into being stay at home moms with very little forethought and planning and consideration of what that might mean in the long term. So many times I’ve heard the same story – couple decides mom will stay home. 5, 6, 8, 10 years later they divorce, dad vanishes, or hides his income, or drags things out in the courts so it’s years before he starts paying support, or just refuses to pay child support at all (and don’t count on the government retrieving that money for you, that route is often full of delays), and mom is left with the kids, vastly out of date job skills, and an incredibly difficult road ahead.
Also people are so lousy at budgeting. They figure they can just barely scrape by on one income, so one parent stays home, and there’s no plan for emergencies or sometimes even routine expenses like car maintenance. I can think of several friends of mine who stay home who have mentioned how much they rely on their lines of credit to pay their expenses.
June 16, 2011 at 8:40 am
Death, disability and divorce. The three ds. I guarantee at least one of them will happen to all of us. Keeping money separate isn’t just good advice for the last of these ds. Years ago, when women didn’t have their own bank accounts, my grandfather suffered a stroke and couldn’t pay the bills. My grandmother didn’t have any money in her own name. My mother swore she wouldn’t suffer that fate and taught us the same way. Keep at least some of your money separate so WHEN one of those Ds happens to you, you’ll be prepared. Keeping money separate doesn’t mean you think you’ll get divorced, it simply means you know life is unpredictable, that bad things happen to good people and you don’t want money troubles to make a bad situation worse.
June 16, 2011 at 8:53 am
I’m on my second marriage and this time around we have chosen to keep our day to day money separate. My first husband and I had joint everything and it was a source of contention daily(perhaps why we are divorced!)
DH and I never fight about money. We have joint financial goals and make sure we are contributing to achieve them. We have no debt, will be mortgage free in less than 4 years (I’m 37), RESP’s for the kids, a 9 month emergency fund, a “lets have fun” fund and a healthy retirement fund.
He has access to one of my credit cards since I pay for groceries and if he happens to shop that week, he can charge it to my budget.
I enjoy traveling, he not as much so, it is planned in my budget but his budget plans for more golfing and fishing!
We have divided our bills proportionally according to our income and for large home purchases, we plan ahead and divide equally.
I feel secure financially and so does he. Having had both systems, I truly prefer this way. Although, we love each other very much and have been together for 11 years, we also consider our financials a business partnership and we work together towards achieving joint goals.
My 2 cents
June 16, 2011 at 9:19 am
Anyone who doubts the wisdom in being independent and keeping separate accounts for some things should read Ellie’s column in today’s Toronto Star.
To those who have posted above, you sound like a wise bunch who have learned a lot by experience, and by listening to Gail, of course.
June 16, 2011 at 9:31 am
It’s fine to say you should keep your money independent, but the reality is that once you are married (unless you have a marriage contract) if you do divorce it does not matter who’s account the money was held in. It’s all fair game (with a few exceptions).
So maybe it’s best to know how much money your spouse has and where it is being spent because even if you have millions in your account, you really only have half of it on divorce!
June 16, 2011 at 10:06 am
ESBB, It’s very true.
We keep all our money together, but we do each have our own savings accounts and get the same amount of money every month to do what we like with (planned or now spending). My income consists of child benefits and odd jobs while he earns our main income, but we still get the same amount, an amount we both agreed upon.
And we never EVER fight about money.
No kidding, no exaggeration.
We just decided we were going to be adults about it, decide on some goals together…and yes, often this DOES mean we’re both giving things up, but we are both willing and glad to sacrifice for one another. We have budget talks weekly, and we’re not stressed when they happen. It took WORK to get us here, both of us working hard to change behaviours and working to get our lives in balance. It has been worth it.
As far as giving up careers to be at home and it being a shock…well, yes, it probably will be, because as North Americans we’re so stinkin’ wrapped up in things like that…why is everyone’s identity seemingly based solely in their career? Frankly, if people need to stop tying themselves so completely to anything, it’s their careers. You are worth more than what someone will pay you, more than which contracts you land, more than what door has your name on it, more than how much you can sell, more than how much your market will affirm you.
June 16, 2011 at 10:42 am
My mom was adamant that I get a credit card in my own name when I turned 18, because after her first marriage (before I was born) she couldn’t get any credit, because her ex had everything in his name. Now DH and I both have some credit available (not used much, or used and paid in full each month) in each of our names, but we treat it like both of “our” accounts.
I struggle a bit with the separate accounts idea, as we have had our finances totally joined since we moved in together (his idea, because I was a broke student at the time). I honestly don’t know how we’d go about separating it all now, after 12 years of this way. Plus, we’ve got a system that works for us after struggling for the early years to learn each others’ financial foibles, so it’s tough to imagine changing it, though I totally hear (and agree with) the risks others wisely note. I don’t have a good answer I guess-perhaps we’ll see the need to change things as our situation changes (we’re about to have our first born-we’re each taking 6 months off of work subsequently to stay home with our Bean, so we’ll have a year of one income). Hard to say where we’ll be in 12 more years, but as long as we’re reaching our goals together, I wonder how much it really matters how we get there?
June 16, 2011 at 10:48 am
Another thought for all – Insurance for your vehicle, do not get an umbrella policy under your husband’s name. After 15 years of marriage, being 40 years old, I became a “new driver” with insurance premiums at a new driver’s rate.
Just a thought
June 16, 2011 at 11:00 am
I love how these comments are all the worst case scenario! I have a friend of a friend of a friend….Just another way for people to start the debate of stay at home Mom’s versus working Mom’s. Everyone will do what works for them.
If my spouse came home and told me he wanted everything separate, I would have some serious trust issues. I also have things in my own name, and I also do the bills each month. I’m not stupid or weak just because I have my finances tied to my husband. Perhaps the word trust no longer carries the same definition that it once did. I realize that divorce, death, and disability happen, but that doesn’t mean that we live in fear everyday, it just means that we plan for what we would do if those things happen.
I completely agree with Iryssa. We live in a socitey that values career choice above anything else. The financial arguement is used most to support that. While challenging, being smart financially is a choice you have to make together as a team. Whatever that looks like for your family, there will be ways to make it work.
June 16, 2011 at 11:49 am
After 5 years together, some of our money is separate, most of it is joint. We each have a personal credit card, but use the joint one. It’s taken some getting used to, but this system works easier then the totally separate system. The Working mom, Stay at home mom debate really is a personal choice. When I look at the money I’ll be netting after childcare and work expenses, I realize I’ll be taking home less money then I did working odd jobs in university. But – leaving a career I do love seems a bad option too. I love my boys, and I love my job. There just isn’t a one size fits all solution!
June 16, 2011 at 12:26 pm
I can’t really comment on sharing accounts, I have always been single. I think I would have difficulties share my bank account or credit card. Both of which I have built up in terms of a good credit rating. I think if I ever get into a permanent relationship there would be a joint account for household expenses: mortgage, groceries, utilities, home insurance, not car insurance since I will never own a car.
June 16, 2011 at 12:46 pm
I am 23, and my boyfriend of 2 years is 24. We are waiting until we are debt free (for me this will be the beginning of 2013) to move in with each other, we both live at home. It wasn’t until recently that I started taking advantage of the savings I can have with living at home. I am paying my debt down, I am stock piling for the future and I have $50 a week to do with as I please after debt, bills, and savings are paid for.
My boyfriend is very open with me about what he makes, and I with him about my money, he has a much bigger paycheck then I do and we have started talking about what he should do with his money. He’s got a budget and knows when to pay his bills but I don’t think he’s started saving. This is something I cannot do for him nor can I force him to do it.
I am so happy we are open about money and not even living together because it feels like it’s a great step accomplished towards our future. I hope that in the next year and a half we can sit down and talk about what is really important to us: own vs rent, how to handle money when living together, which city to live in. I think it is important that each person has some money whether it be $20 or 100 (which ever works best for you’re budget) a week or month to blow without getting in trouble with the other person. I believe big purchases should be talked about especially if you are living together. I was with my ex for 2 years, he lived with my mom and I for 5months at the end to help him get his finances back on track. and he ended up worse for ware. This made me much more money aware because I did not want to end up there as well. Everyone will find what works for them and their significant other.. but I think what is most important is communication and talking about the money and future goals you both have.
June 16, 2011 at 1:00 pm
I think its about balance really.
Totally separate accounts can be a strain too. My husband and I had completley separate finances for the first 4 years of our marriage, and when baby came along and my job disappeared, it was humiliating for me to ask for the money even to make mortgage payments EVERY month from my spouse. He always said I should “just ask” when it was getting close, but when I did, he’d moan at the cost of it… like I said, it hurt my pride and found it humiliating. After pressure from me, now we have joint accounts for the fixed expenses and essentials, but also “mad money” accounts each in our own names. It prevents any finger pointing or score keeping about selfish purchases (I like coffee out with my sister, he likes tools).
Oh ya. We each have our own credit card in our independent names. They existed before marriage, and we have never seen any reason to cancel, combine or otherwise change that. We are diligent about paying them off every month on time, so all they do is hold our credit rating as active really.
June 16, 2011 at 1:12 pm
I’m not going to debate about stay at home vs career moms, this is just what we have chose to do.
We have decided that I will be going back to work after the baby is a year old. The money coming in will be just a little bit more than the cost of daycare (3 kids under 5) and all the extra expenses. As the children gets older, the daycare fees will be lower, it will get better.
I am doing it mainly to keep my foot in the door. Yes, I do have a career, but to me my career is just a means to an end (income). I don’t love my career, but I don’t hate it. I’m worried that if I’m out of the work field for too long, then it will be impossible for me to get back in.
There are many unexpected things that can happen in life such as the 3ds(Death, disability and divorce) mentioned above or even layoffs/strikes/illness etc. I want to make sure that I can always provide for my family should anything happens to my husband. I don’t want to be left destitute and have to move back in with my parents because I can’t keep a roof over my children head.
As a side note, we keep all our finances joint, however we each have a personal chequing that we each get our biweekly allowance deposited. It is the same amount for each of us, and it’s for our “don’t ask” purchases. We each do have our own credit card, but mainly use my MC for the points. His Visa we use whenever the merchant don’t take MC or for his personal stuff.
June 16, 2011 at 1:13 pm
Gail, I totally agree with you on this.
It is important that you are able to stand on your own as an individual and also know that you can handle the finances by yourself. This takes nothing away from being a couple and working as a team…but if one person is no longer around(for whatever reason), then you should be able to carry on with the confidence that you can be successful at it without the other person’s input.
Just like you must be happy on your own before you can bring & share that happiness with another person. And together as a couple, you create more happiness.
As a couple, you should be communicating with eachother what your goals are, what your dreams are and how you want to spend, save & invest your money. You are obviously not always going to agree on everything, but you find a common ground and a way to make it work.
And if you budget properly, and allocate your money correctly and leave room for “his” and “her” money..then if he wants to go out of town for a sports event with the guys one weekend..and you want to go to an all day spa with the girls another weekend, there should be no problem with it because the money has been allocated and it has been discussed.
At the end of the day..if you don’t know the “ins & outs” about the finances for YOUR family..the only person you can blame is YOURSELF. It’s YOUR family and YOUR money. Take responsibility as a grown adult, sit down with your partner and learn about the finances that are affecting your family.
There is no “I” in team.
June 16, 2011 at 3:12 pm
I’ve always felt I sounded cynical when I talk about power in a relationship, but I do think it’s true that money makes a difference. My dad called the shots, because he was the wage earner, and being the homemaker was not respected, because it did not bring in money. It is nice to hear stories of well-handled money in people’s marriages.
June 16, 2011 at 3:24 pm
I think it is unfortunate that someone turned this into a working mom/stay-at-home mom issue or a dig against people with careers. Everyone should do what is right for them. The message is very important in “Be an island. Then be a peninsula.” The good thing is most people seem to get the message and aren’t being sidetracked.
June 16, 2011 at 6:01 pm
I’m engaged, have lived w/ bf for 3 years, and kept everything separate for that time. Basically what we’re planning to do when we get hitched is to have a joint savings account for mutual goals, joint checking account for household expenses, but each keep 10% of what we bring in each month as our own money to spend without each other’s permission. This way I can buy a new pair of totally unnecessary shoes every once and awhile, and he can buy the latest gadget he’s been eyeing. No argument required! Our credit cards, retirement accounts, and personal savings are staying separate, so in the event we do split up we’ll both be okay financially. The only condition is transparency as far as knowing what each other has.
While it does sound un-romantic to keep things somewhat separate, I feel that the peace of mind (knowing I’m financially safe if something goes terribly wrong) is worth it, and will make our marriage go a lot smoother.
June 16, 2011 at 6:36 pm
Ideal for me, is to be solid as an individual, but to lose yourself in the relationship totally without ever giving divorce a thought.
June 16, 2011 at 6:49 pm
Can I please ask for advice.
My son is gifted (reading by 3.5 year old bla bla). We can’t afford private school. We live next to an ok school.
We CAN afford selling our home, buying and moving next to the best public school in Toronto (actually would cost less) and having to commute more to get to work.
Is this insane?
June 16, 2011 at 7:29 pm
We went with “his”, “hers” and “our” accounts. I thought everything was going great, and that we were working towards the same goals. 12 years later I find out there is another woman in the picture, and that he has racked up an insane amount of debt in his name. I about croaked when it can time to calculate the equalization payment part in the seperation agreement. Due to the debt he had racked up, his net worth had plummeted. This stay at home mom, came very close to having to pay. I blindly trusted, and was not involved enough in the financial goings on. Lesson learned. I would never marry again without a prenup, and my eyes will be wide open all through the marriage financially. No letting my gaurd down a second time.
June 16, 2011 at 7:49 pm
I am an island. I’m working on being a tropical island rather than a mere fantasy one.
June 16, 2011 at 10:07 pm
When entering into a marriage there are many things to consider and financial issues are no exception. I think having individual and joint accounts are equally important so each spouse maintains their identify in the financial aspect. It would seem to be the healthy balance and also that both partners are making the financial decisions.
However, in addition, down the line if there are financial issues such as bankruptcy, there is an island and peninsula status to consider as well. If you are married and considering filing for personal bankruptcy as an individual, both you and your spouse need to knowbankrutpcy canada what impact the bankruptcy filing by one partner will have on the other.
June 17, 2011 at 6:15 am
HI All
Some great discussion’s on this blog from all!
Some things to consider. A lot of discussion has been around the need for joint accounts/vs seperate accounts. In a marriage, joint accounts are best because in the event of death, seperate accounts are frozen until the estate is cleared. This could be quite challenging especially if it’s a complex estate.
Regarding the statements above about keeping retirement accounts, savings accounts etc. seperate. In the event of divorce, the accounts are reconciled and split between the couples unless a pre-nup is in-force.
Just my two cents!
June 17, 2011 at 9:48 am
Great article Gail…Very true. There may be no “I” in “team”, but there’s an “M” and an “E” = ME!
June 17, 2011 at 10:03 am
This is amazing and perfect and I love it. There’s a reason why I call my partner my partner–because that’s really what we are the end of the day. Yes, I love him, and he’s awesome, but that alone doesn’t mean I have to be in a relationship with him! I choose to be because, in addition to loving each other, we are basically teammates in life. we are both capable, independent people who have found that we can get more done together than apart. I often describe it as “he has my back”–he doesn’t make my decisions for me or put undue influence on my life, but I know that he supports me in the choices I make and vice versa.
And I think that escape from codependency, aside from being the right type of relationship for us both personalitywise, also gives us a safety net. We both have our own money, and have planned our financial lives around one of us instead of both. (By that I mean, for example, we live in an apartment that I could pay for all on my own, etc.) That independence means, if something happens to one of us, we’re both still strong and together enough that our lives won’t implode. Recently, my partner was injured in an accident and was out of work for several weeks. If we had been in a co-dependent situation where we could only afford rent and bills and food with both paychecks together, we would have been in trouble. Instead, we didn’t even have to touch our emergency fund–I just picked up the slack while he was recovering. Or, on the darker side, if we broke up or something really terrible happened, we could both still make it just fine financially, etc. because we’ve cultivated these independent lives in addition to our relationship
June 17, 2011 at 7:53 pm
I disagree… up to a point. I thought long and hard about the modern society and this independence. I was the one to lose when carrying somebody through school and supporting them and then being discarded when I had lived my usefulness. Even so, I will do it again because it is the right thing to do. Starting a couple on the basis of a pre-nup agreement, keeping separate accounts are just some things that stand behind the huge divorce rate. I guess I am not absurd to think that financially a couple could reach much faster its family goals when pooling resources. In this search of fairness, a couple becomes more of a business arrangement than what it was meant to be – a soul’s communion. And a business arrangement has to be maintained as long as it is mutually profitable. When one partner goes through a rough patch, the other one feel completely entitled to say “You know, it’s not personal but… gotta go!”.
June 18, 2011 at 1:41 am
One word : WOW! Awesome post. FYI… We made it to the jars… not the non spending outside of it though… you might say this is kind of a dumb exercise, i see it as a first step. And I must admit that since, any type of fight over money has vanished. We always have money for food, fun and other needs… now, I must admit, I have to wrap my head around not going on crazy spending. Though, also, can’t say we are much in debt… could lower the balance more, the rest is monthly settlements until completion (less than a year). So… not really worried, but love the jar for the peace of mind they brought.
June 18, 2011 at 11:05 am
This is a tough one for me right now. We had only been living together a few months when we found out we were expecting. The news of the baby was great! But the reality of me being taken off work within a month of finding out for medical reasons, was not so great. We had just gotten things figured out in terms of paying our individual bills and the household bills and now we have to start from scratch.
My bf doesn’t mind working more to make up the difference in my income and to make sure all the bills are paid. The big issue comes when we are deciding what to do with the money that is above that. He feels entitled to buy more things and spend more money since he is working so hard to earn it. While I would really like to see the debt continue to go down as it was while we were both working, especially now with another little person dependent on us.
He wants me to spend money for myself too. It isn’t that he wants all the money for himself. It’s that I feel getting the debt paid down and getting into a better place financially should really be our goal.
How do you try to convince someone that debt isn’t necessary and that it does hold you back and put you at risk??? Before I would just put my money to debt, but now there is very little my money, actually negative amounts once my bills are paid.. I am due a large cash settlement as the medical problems are a result of a car accident. But there is no guarentee when I will get the settlement. This also adds to his not being concerned about paying down the debt now, as it will all be paid when I get my settlement.
June 18, 2011 at 7:27 pm
Dawn:
He has to want it. You have to guess which information makes the goal a SHARED value.
One possible eye-opener is from Gail’s show: show him the total amount of interests that will be payed based on his system. For some it is enough. I recommend showing him the amount of interest payed if done your way. You should be able to find a calculator on-line for this (Gail’s Own Up to Your Debt Worksheet might do). Ask him if he prefers spending is money on interest or on buying stuff.
June 20, 2011 at 11:27 am
Great post! You have to be Independent, before you can be Interdependent, or else you’ll end up Codependent!
June 21, 2011 at 4:22 pm
« But independence doesn’t negate any of those things. It enhances them because each and every day you’re choosing to be together, not defaulting to togetherness because you’re trapped.» This is why my partner and I decided not to get married. We want to be together every day because we choose to be together, not because it’s too expensive or too much trouble to get divorced. We keep separate accounts, and divvy up the bills between us according to our incomes. Works great for us!