As one of the most notorious problems a marriage or relationship may face, money and financial issues often cause strain among millions of couples. A study published by Business Insider found that — during the first and third years of marriage — money matters were the most commonly reported source of marital arguments and that couples with high amounts of debt generally have lower levels of satisfaction in their marriages.
Each couple has its own way of sharing the household income and responsibilities. Some couples have a “you pay this bill, I’ll pay that bill” approach, where they each cover some of the household expenses. Others use a system of proportion where, based on each partner’s income, each pays their share of the bills.
To gain a little more insight on how married couples share finances these days, we asked Scott Winkler, certified public accountant and founder and principal of Winkler Financial Planning, LLC, in Georgia. He says that in his experience, he sees arrangements where “one spouse will manage all of the finances…[in many cases,] the couple will combine and share all of the household income.” Winkler says he only occasionally sees couples using systems where income is separated. However, he adds that separating income, or proportion arrangements are “a bit more common in a second marriage or [in instances where] one person has a situation occur…maybe a bankruptcy.”
Many married couples use “mental accounting,” says Winkler. He explains how couples will mentally allocate a source of income to a specific bill or responsibility. “Some couples decide that one spouse’s income is going to go to savings…”
How do you (or would you) share income with your spouse or significant other? Here are a few statistics on marriage and finances, some of which may surprise you.
1. What’s Mine is Yours
The 2013 Fidelity Investments Couples Retirement Study assessed financial behaviors among 808 couples that were at least 25 years old and had household incomes of at least $75,000 (or they had at least $100,000 in investable assets). The study found that eight out of 10 (81 percent) of couples see themselves as one financial entity and 45 percent of couples agree that financial decisions are made together.
2. What’s Mine is Mine
The age of the relationship appears to be a factor in how couples share finances. Information published by Slate asserts that 57 percent of couples who are together less than one year keep their finances apart, compared to only around 20 percent of couples who had been together for eight years. Around one-third of single adults say they would ask their partner to sign a prenuptial agreement, according to statistics published on USA Today.
3. Seeing Eye to Eye
Statistics published on Money Habitudes indicate that 76 percent of couples feel they share the same philosophies as their partner when it comes to money matters, such as savings habits and spending habits. Younger couples are more likely to disagree or have different financial views. Among couples between the ages of 18 and 24, the figure is reduced to 47 percent who feel they have the same financial ideals.
4. Investment Decisions
According to an LA Times publication, more than two-thirds of married men say they make investment decisions, for the most part, on their own. However, only 13 percent of married women agree their partner is the main decision maker.
In a survey of couples, around four out of 10 (43 percent) say they make investment decisions for retirement together.
5. The Breadwinner
According to a Pew Research study, both spouses work outside of the home in nearly 6 out of 10 (59 percent) two-parent households. That same study found that among newlyweds, the wife is the higher earner in 30 percent of cases, where the husband is the primary earner 67 percent of the time. Three percent of newlyweds earn the same amount. In 2011, households where the mother is the higher earner brought in the highest median household incomes ($79,800) when compared to other types of arrangements.