Couples, whether living together, in a civil or legal union, are they functioning in beautiful bliss or financial fiascos?

Family relationships encompass a variety of life arrangement situations: couples, single parents, grandparents, civil unions, long-distance commuter commitments, cohabitation. The June wedding month, more popular than ever, is close to hand.

Weddings. brides, grooms, attendants, friends, family. Pre- and post-ceremony festivities are a huge business. The amount expended upon a wedding can range from absolutely minimalist elopement (no cost there) to the do-it-yourself modest affairs to massive, incremental no-holds spendrageous spectacles. After all, if you’ve got it, why not spend it.

One can be amused for endless hours with various TV reality shows watching soon-to-be brides (and their friends, relatives and their grooms) shopping for and bickering about dresses, weight, make-up, looks, diets, food, decorations, and so on — the more controversial the better. These shows thrive on besting the commonplace by becoming innovative standouts, creatively churning up the “normal” idea of a wedding. The result. The higher the reality TV view content and ratings, the happier the advertisers — just as long as there are no negative connotations, implied discriminations, and assaults against others and their sensibilities.

Have we all turned into exhibitionists? In the age of Instagram, selfies, Snapchat, Pinterest, and Facebook postings, it is not unusual to witness ordinarily sane respectful people throwing themselves into awkward, potentially embarrassing, circus-like atmosphere that sometimes have terrible consequences.

Yet the old fashioned quality ceremonial wedding still endures because I think most people truly believe it is a very public commitment between two individuals who sincerely love and want to care for each other into perpetuity.

What happens in the afterglow? Then there is back to real life when all things financial become very interesting. Suddenly, a myriad of financial emotions arise: who has control; should we share accounts (or not); should we keep all of our money completely separate; can we make our own purchase decisions, or do we have to consult on every single little item; should there be a forced savings plan; how much should we spend on gifts, holidays; how do we achieve parity, for example, if one partner in the relationship loves multiple pairs of “expensive” shoes and the other partner only wants two pairs, how does that work on the money parity scale; do you weigh that decision and “let” the other partner buy a large flat screen TV or laptop.

How do you handle credit cards? One partner has a high balance paying only the minimum each moth; the other partner pays the total each month — a great disparity between those two philosophies! We are all individuals, our values, our traditions, our financial management are all so different.

How we effectively manage money in the relationship will determine if we succeed in love because, to be honest, money decisions and lack of financial communication are the largest cause of relationship ruptures.

In 2011, Jessica Grose*, a frequent contributor to Slate magazine on women’s issues, family, culture and grizzly bears, decided to gather some real data on “How do you manage your finances as a couple” since she had recently married. She further wrote an extensive five section column on this fascinating topic, then published a mini-book on Amazon.

There were a number of very good reasons: individuals don’t often think about how they are going to manage money as a unit. Ms Grose noted that she assumed that they would be the same as their parents where all the money went into the family money pool. Financial advisors she researched gave different opinions.

Suze Orman stated that each person in a couple should always keep some money independent of the other, while another personal finance columnist, the wonderful Michele Singletary (whom I have written about from time-to-time) said: “Pay the bills together and stop bickering about who should pay what or how much each makes and what they should contribute.”

Independence and autonomy. Ms. Grose was further influenced by her “grandmother’s traditional marriage where, because her grandfather was the sole bread winner, her grandmother never felt free to make her own financial decisions”.

Her grandmother said: “A women should have her own money.” Funny and ironic, so did my mother who said: “It gives you some independence.”

This was the way it was in the “olden” days. The man was the man, the sole wage earner. Few women had careers and those that did were either envied or, believe it or not, looked down on. Those more special type stay-at-home ladies generally received a weekly or monthly allotment from their husbands to run the household. Why they even got to open their own checking account! Some ladies, at that time, did not even know what their husband earned or how the “rest” of the money was spent.

Ms Grose, in order to understand how other couples were managing this all important money issue, composed a 40-question survey on Slate. Some 5,858 people responded with an average age of 33, almost 50 per cent with graduate degrees and about three-quarters were married or in civil unions. Ms Grose defined the terms and separated the results by Common Potters, Independent Operators, or Sometime Sharers.

For Common Potters, all money goes into the same pot.

For Independent Operators, all money is kept strictly separate for each individual in relationship.

Sometime Sharers have a fairly complicated system of some joint and some separate accounts. Generally, this method, under other names, has been recommended by planners for second marriages, extended families and the like.

This is what Ms Grose found based upon the results of the survey.

Setting up a household budget was the most controversial item for couples — because each individual brings their own value of money and how it should be spent to the table. When individuals started out in new relationships, they tended to keep independence. Or, they evolved into Sometime Sharers that became complicated over time. The longer couples stayed in a committed relationship, the more likely they became Common Potters.

So what does it all mean?

Managing money in a relationship entails respect, love, communication, sharing, faith, trust, understanding of wants and needs, the discipline to save, and compromise. And the will to be mature enough to handle the compromises in an equitable fashion.

One individual in Ms. Grose’s book said that “sharing is one of the most tangible bonds of a relationship”. I would add that all of the other attributes are equally important. Relationships are work, but good work and worth keeping. Lasting relationships are the best thing that could ever happen to you in this world.

References: I encourage you to read this highly revealing study of human nature and money.

Jessica Grose: Slate. January 31, 2011. Our Newlywed Money Dilemma

http://www.slate.com/articles/life/home_economics/2011/01/our_newlywed_money_dilemma.html

http://www.slate.com/articles/life/home_economics/2011/01/all_ours.html

http://www.slate.com/articles/life/home_economics/2011/02/separatetogether.html

http://www.slate.com/articles/life/home_economics/2011/02/separatetogether.html

http://www.slate.com/articles/life/home_economics/2011/02/what_we_decided.html

Martha Harris Myron CPA PFS CFP JSM, Masters of Law: International Tax and Financial Services. Appointed to the Professional Tax Advisory Council, American Citizens Abroad, Geneva, Switzerland. The Pondstraddler* Life™ Consultancy provides cross border financial planning for internationally mobile individuals and their businesses residing, working, crossing borders, and straddling ponds in the North Atlantic Quadrangle. Specific focus on residents of Bermuda, the premier international finance centre.

Contact: martha@pondstraddler.com