As I have been saying for awhile, I hate money. I would be much much happier going through life without ever thinking about money at all (even if this did not mean a life of luxury). I think I would have really liked living in a barter economy, where I just bring you a chicken when I want a new pair of shoes. Bawk. But what I want to write today is a defense of the nest egg. There's been an ongoing Nosy Bitches conversation about how to manage money within a relationship, and then within a marriage. This is something that He-Mouse and I did really really well, if you gauge things in terms of a steady decrease in fights about money. Here's how it went:

Dating: Sometimes he paid, sometimes I paid. (No fighting, cause of the honeymoon period)

Early moved-in-together: Sometimes he paid, sometimes I paid, and we worried about whether we were paying the same amount. (No fighting, but bottled-up worries)

Mid moved-in-together: Sometimes he paid, sometimes I paid, and we sat down and calculated what each of us had contributed and then somebody wrote somebody a check if it was uneven. (LOTS AND LOTS OF FIGHTING)

Late moved-in-together: We opened an account for shared household expenses and each made a flat monthly contribution. This was WONDERFUL. No more fighting about who had spent what, and if there was extra money, we could go out to a nice dinner together. However, this left a pretty serious problem: I was still a grad student, and he had a real job. If we were going to be all in, in the relationship, we had to think about being all in with our money. (Much less fighting)

Right before we got engaged: We combined all our money with one big exception I will talk about in a minute. We agreed to pay down all of the debt we each had coming into the relationship (which was about the same amount). We decided that because He-Mouse will earn more than me over the course of his life (SEE 2., BELOW) we should both put all of our money in a common pot. However, we allocate a set amount of money ($100 a month at the beginning, a little more now) as Mad Money, which is transferred to a separate account and then we can do whatever we want with it, no questions asked. No explaining, in other words, why I want a particular expensive lotion or why he wants season tickets to a basketball team in a city far far away even if he can't go to the games.* (Fighting down to zero, although still plenty of frustration about not really having ENOUGH money. C'est la vie.)

This financial system is excellent. It works to pay down all the personal debt we brought with us, allocates a small amount of financial independence (which will grow as we get on our feet), allows us to roll with a really shitty market (last February I earned only $650, yikes), and allows us to save up for what's important. AND, it makes the equality of our finances match the equality of our partnership.

HOWEVER: I still believe that there are two times when women should not share their money with their husbands, even when their husbands are wonderful and loyal and trustworthy and loving and fair.

1. When money isn't just money
When my stepdad passed away, I got a small inheritance. It isn't a lot of money, but he meant it for big things--part of a wedding, or part of a house. That money was not supposed to be rolled into a household budget and used for little stuff like groceries or car insurance. I know He-Mouse feels the same way, so we have a standing rule that inherited money does not go into our common pot, not unless we decide to contribute it independently. I may decide to put some of that money into a down payment on our first home, in, like, a billion years when we can afford it.

2. Every woman needs a nest egg
Because of the way we are professionalized in the academy--in everything from salary negotiation to aggressiveness in conference networking--men still do earn more than women in their starting salaries, meaning they will earn more over the course of their lifetimes. Also, because of unpaid maternity leave--and the time lost--women frequently choose to give up substantial portions of their income. He's also older than I am, and has been earning for five years or so before I will have a real job (maybe longer, given this economy). This combination of factors means that as individual earners, He-Mouse will have more in savings and in his TIAA-CREFF by the time he retires than I will, based ONLY on systemic gender inequality in our profession.

Therefore, I believe that there is a specific and very political reason for a woman to have her own small nest egg of money, in her own name, that is clearly separate from the household finances. And I know this isn't something every woman can do, particularly in our twenties and thirties. I do think it should be part of a long-term financial plan in every family. It's about your own individual financial security. I hope that this money will never be touched, and that when He-Mouse and I are tiny and old and wrinkly we can use it for a great vacation, surrounded by grandchildren. But I will know that it's there, just in cases.

* Sheesh.


Beth said...

I find your relationship money progression a really interesting way of looking at money.

I don't want to write a whole post of my own down here but we were more stressed about money before we moved in together because F. couldn't find work.

In our renting-living-together stage, everything was 50-50 even when incomes were not. But we were still both financially independent and things were good.

Then we bought a house (on one income) and the boundaries necessarily dissolved-FAST. Perhaps too fast because we started to fight about daily spending. Why did I buy that $20 book? Did he really need a new chain and sprocket for his dirt bike (in FEBRUARY)?

We're getting better at not getting so on each other but I'm still drawn to ideas of having our own "spending" money without strings. We're in a bit of a state of financial flux right now (changing directions a bit) so I don't see us moving in that direction any time soon.

And the pesky idea of a nest egg? I'm not even going to touch that. It's not something we do in our house (then again, I'm the sole wage earner) but I see the need for that in many cases--perhaps especially for women who leave the workforce permanently or temporarily to raise children.

Rachel said...

Money does suck. But I'm sort of obsessed with thinking about it.

We've been doing the joint equal contribution thing for a while, and while we've discussed transitioning to a joint account with separate allowances, we haven't done it yet. It isn't critical for us now because we both earn the same amount so we're not dealing with inequality in terms of spending money.

So we have joint accounts that we contribute equal amounts to (checking + savings), plus separate accounts that we get our paychecks deposited in (checking + savings).

We're holding off on any changes this year, but we're considering spending next year merging the money more thoroughly and attempting to live off of a single salary to bulk up our savings accounts.

I will ALWAYS have my own personal savings + retirement funds. It makes me feel more secure. I have a female relative who makes the bulk of the income but literally has no idea where the money goes because her husband handles it all. She gets an allowance and that's it. No idea if they have savings or what they have. That terrifies me.

Ellie said...

Keeping inherited money separate is also smart because many states view inherited money as belonging to the spouse it was inherited by, in the event of a divorce, as long as you keep it separate.

We combined our finances as soon as we got married (but we had a joint credit card as soon as we moved in together). It worked really well - we each paid half, we used it for groceries and going out. Neither of us has ever had any credit card debt, so we weren't concerned about one of us ruining the other one's credit.

I believe that married people should combine finances going forward, but shouldn't dump existing assets into one pot until they are say, buying a house. This is especially true of how divorce laws are written, and because it doesn't necessarily hurt anybody to keep their money separate, as long as they are transparent about it. Don't hide debt, don't hide savings. It's not fair.

I think the most important thing for women is to take an active role in the household finances. They should be able to pay every bill and log into every account, whether they do that regularly or not. I've seen what happens when somebody passes away unexpectedly and one partner did not play a role in the finances, and it is scary.

K said...

This was really fascinating! Even though D and I got married last year, we still have entirely separate accounts (savings, checking, investments); sometimes he pays, sometimes I pay — neither of us worries too much about it. This system has worked for us for almost a decade, and we NEVER fight about money, but we've also been extremely lucky — each of us has always made enough to be comfortable, and each of us has been able to save quite a bit (even in grad school!). In the future, as we share more responsibilities (owning a house, having children, etc.), I see us moving towards a system where we have a joint account and contribute a set amount each month.

Also, I generally agree about women having their own nest egg, but I wonder if the reasons change if the woman is in the more lucrative profession. For example, my starting salary is twice as much as D's starting salary, and in the future I expect my salary to be many times more than D's salary (which is substantial, but I happen to be in a ridiculously overpaid field). While I may not make as much as men in my field due to systemic inequalities, unless something catastrophic happens, I will probably make quite a bit more than D over our lifetimes. I do intend to maintain my individual accounts and keep some money separate for a number of reasons, but those reasons are more practical than political.

Maggie said...

This was interesting to read. I guess we're something of an anomaly: money has never been a big issue in our relationship. Neither of us has ever made a lot (though B makes 3x what I do), we're both extremely frugal, and neither of us had much debt when we met (and we have almost zero debt now).

We've run through pretty much every way of dividing bills and pooling resources-- from completely separate to one pot. Right now, we have a joint account for checking/savings, and now that I'm employed (phew, only took 1 year :P), we each have a "mad money" allowance every month. We've decided to bank my entire (small) paycheck and keep living off B's salary.

As I mentioned on Twitter, I like having my OWN money to spend how I like (so I don't need to justify a new pair of boots and B can buy as many video games as he wants). However, I don't plan to stockpile my money separately. I just don't see the need, and I know that might sound naive to some, but I'm okay with that.

Mouse said...

Wow, micies, thanks for all these well-considered comments! I'm so intrigued to know what works for people--and you're all right about what that is for you. I particularly like the women earning more than the men. WOOOT. xo

Sarah said...

My two cents:

I totally agree that big savings (like the inheritance) should stay separate, but not from each other, just from your regular monthly monies.

I also think its good to be able to have a little bit of your own money to spend how you want. Feel like saving it for a new camera? Fine. Want to spend a little each month on clothes? Fine. Everyone gets a little to spend with no questions asked.

However, I also believe that money...is just money. It should not define the amount of worth that you bring to the relationship. If he makes more, that doesn't mean he is contributing to the household more: he's just contributing Differently.

I also believe that when you are married, you should be all in. If you are agreeing to combine your lives and your hearts, you should be combining your money (with above exception of small monthly fun money). By keeping Your money and His money separate, you are in essence saying that there is a portion of you that doesn't trust him and doesn't want to get too interconnected with him. A nest egg is for everyone's future...it is something to build together.

That doesn't mean that you hand him over what you make. I think that both partners need to understand what money there is, where it is at and where it goes (even if just one is in charge of paying the bills, balancing the books, etc).

This is how we have always done it, and it has worked pretty well for 16+ years. We have our share of disagreements (like Mouse: mostly about not having enough to do what we want). But we have never questioned whether the other was "pulling their weight" or holding anything back. We make the big financial decisions together.

Adventures Along The Way said...

Really interesting conversation. We went from totally separate, then we opened a joint checking account shortly after we got married and each put some in there (and put in all money given to us as wedding gifts, etc.). We continued that way (and alternating who pays for what) for about 10 months (which also was the time we were in two cities and doing a lot of back and forth between our two homes.) When that phase ended, we moved to the same town and went "all in" with our money. For us it works really well, and has been a relief to stop trying to keep track and keep things even. But neither of us came into the marriage with any huge assets, so that makes things easier I think.

I like hearing your thoughts about inheritances and nest eggs. Out of curiosity, where does the Nest Egg money come from? From the woman's income? A designated percentage or some every now and then?