One of the most frequently asked questions by my budget review clients is “Should you share money with your spouse?” It can be a tricky topic and one with some heated views, but it is worth discussing. There are a number of points to consider and I will discuss some of these here. Please note I am not an accountant or financial advisor so this information is general only and should not be taken as advice.
First I will share my own personal situation so you have some perspective of where I am coming from. My husband and I share all accounts and money and have done since we were married. We lived separately before we married so for us it made sense that when we moved in together we joined all our accounts up. At the time we were both young and at university so we didn’t have much money anyway but we have always looked at it as “our” money. Currently, I don’t earn an income so all money comes from my husband or family tax benefits into our joint account. I spend whatever we need for everyday expenses, make sure the money for the mortgage is there and then set aside all the budgeted money for bills. You can read a bit more about how I budget here.
In our home I manage the budget, but all money is joint and there is no discussion over “yours” vs “mine”. We do have “play money” each week which is basically personal spending money, but it still comes from the joint account and we are each responsible for monitoring and tracking our own spending. In reality, my husband isn’t a big spender so it is more me that needs to monitor my spending, particularly as I have the kids with me full time and easily spend bits here and there.
For us, sharing all our money makes sense and works well. It has worked for times we both had an income, times we’ve had quite different incomes and times when I have had no income and we don’t find it causes any resentment or stress as it is all “our” money.
When considering if you should share money with your spouse there are a few points worth noting. As a start, consider these questions:
- Do you have children together?
- Do you have other children that you maintain?
- Do you own property together?
- Do you have any loans together?
- Are you married or in a de facto relationship?
- Do you earn similar incomes?
- Do you have similar spending styles?
- Do you have similar attitudes to money?
In my experience, one of the biggest sources of tension in families is money. Particularly when it comes to spending after having children, where one partner earns the majority of income. Ideally, in a family with children, expenses and income are considered as “family” expenses and income and are shared. The problem arises where money has always been split but then one person’s income drops following children. Resentment and arguments can arise where the expectations for splitting expenses remain even though the incomes have changed.
In regards to families with children, I generally find it is easiest to combine finances and share money with your spouse. This is particularly true where one partner earns significantly less that the other who is caring for the children. I would suggest it is best to sit down and work through a budget before kids arrive and work out how you will manage the finances on a reduced income. If you have separate finances, now may be the time to combine at least the bills proportion and allocate a specific amount to each person for each week. This amount shouldn’t be based on income but rather a fair split of spending money, taking into account that one partner may not earn an income but is caring for children.
If you don’t have children and would prefer not to combine incomes it is important to consider if you are planning children what will happen when they arrive. I have seen many families where the mum, who is now not working or on leave while the children are little, still remains responsible for the same proportion of household expenses that she had before the kids arrived. Generally what happens is she eats into her personal savings and is left feeling resentful and unappreciated. Fights then erupt and everyone is left angry.
Having split incomes and expenses works fine when incomes are similar but generally doesn’t work well once children arrive and incomes change. Generally I suggest to families that sharing money with your spouse is essential once you have kids. Some points to keep in mind here are:
- Having separate finances doesn’t necessarily mean your finances will be kept separate should you separate or divorce. Living together usually means you take on the same joint status as if you were married and finances will therefor be split regardless of how you have them structured.
- If you would like to be able to have some spending separate (such as for surprises or gifts) you could consider maintaining separate “play money” accounts but keeping all bills and other expenses together.
- When splitting money, don’t just look at what each person earns but also consider that each person contributes in other ways to the household such as raising children, managing the home, cooking, cleaning or otherwise co-ordinating the family. It may be that one person earns most of the money but that this is only possible as the other person collects children from school, takes care of the running of the home and is there for sick kids etc.
Ultimately every family is different but as a general principle, it has been my experience that families where spouses share money have a lot less arguments and issues with money than those who keep finances separate, particularly after having children.
Do you share money with your spouse? Does it work for you?