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4 Phases of Money Merging
By Saver | June 26, 2008
I have a feeling most couples go through a couple phases of finance-mingling as their relationships develop. They are probably slightly different for each couple, and different couples will end up settling on whatever works for them. For Spender and I, there have been at least 3 distinct phases of “Money Merging”, and I’m hoping we’ll eventually settle in on a 4th.
Phase 1: Splitting Expenses
When we started dating, I was a student and Spender was in his first staff position as a photographer. Neither of us had a lot of money. Our only “joint” expenses were going out for dinners or dates. I think Spender probably paid more than half, since he was working and I wasn’t, but I’m sure he didn’t pay for everything. The decision of who would pay was never much of an issue, and usually was driven by which of us had cash or which of us was the one deciding what we’d do that night.
Phase 2: Sharing Expenses
After I graduated, Spender was back in school and I was working, but not making very much money. We each still had our own bills and bank accounts, but we started paying a bit more attention to who was paying for what. We took turns at the grocery store and generally tried to make sure our spending balanced out. We had a lot of “Did you pay for X? I’ll pay for Y” conversations. I call it “Sharing Expenses” because the amount we paid was becoming less based on how much each of us used, and more likely to be split down the middle regardless. This is also when our “Shared” expenses started to be more than dates and going out: Groceries, Gas, Travel and even I think even cable.
Phase 3: Sharing Income
A couple years down the road, (and 2 states later, but that’s another post), we were both working and now living together. We opened a joint bank account, and we each contributed the same percentage of our income to the join account, keeping the rest in our personal accounts. I was earning quite a bit more than Spender, so I was contributing 2-3 times his share to our joint account.
It’s even more extreme now. Spender isn’t making any money. (We came to Europe when I decided to accept a transfer within my company). My paycheck (in Euros, thankfully) is deposited into our European bank account from which we pay all of our living expenses. We’re each using US savings accounts for things like paying our student loans or funding our Roth IRAs.
This is also the stage where conflict started arising for us. “She’s a Saver, He’s a Spender” isn’t just a catchy name for our blog. It’s also the biggest source of arguments in our relationship. Once one partner starts carrying more than her “fair share” of expenses, it gets very complicated. On one hand, we were each contributing our agreed upon share and we were supposed to be free to do what we wanted for the rest. On the other hand, I felt that I was making a certain level of sacrifice and in return Spender owed it to me to be responsible with the rest of his finances, including paying down debt and trying to save. Many arguments included something along the lines of “I’m not mad that you’re paying less rent. I’m mad that you’re paying less rent and also going out and buying an iPhone.”
We’re still working this phase out, but I think we’re getting better. We’ll post more about it as we continue to improve, and I hope we’ll eventually move on to:
Phase 4: Merging Finances Completely
The ultimate goal is to function as a single unit. I think we’ll always have a mechanism for us to be able to spend some money individually, but we would also take a more holistic view.
I’ll know that we’ve arrived to this phase when I am psychologically ready to take on Spender’s student loans. We actually both have a similar level of loans, but mine are at 3.25% and Spender’s are between 6-7%. If we were really operating as a single unit, extra money would go into his loans before mine and possibly before my savings/investment accounts. I’m not there yet - I still prioritize my accounts over his. I’m actually interested to see which happens first: my rational mind convinces itself to do the best thing financially (i.e., pay off high interest loans) or my heart deciding it would rather be half of a partnership than hold on to its current independence. Stay tuned.
Topics: Money Stories, Relationship, Saver's Posts | Related Posts: None
June 26th, 2008 at 4:28 pm
I found your site on Google and read a few of your other entires. Nice Stuff. I’m looking forward to reading more from you.
June 27th, 2008 at 2:01 am
I wish i could get my other half to read this blog - it would probably help us out since we are in a very similar situation… Somewhere in between step 2 and step 3… great post!
June 30th, 2008 at 8:14 am
[...] Saver from She’s a saver, He’s a spender describes the challenges she and her husband are tackling as they slowly merge their finances in 4 Phases of Money Merging. [...]
June 30th, 2008 at 3:14 pm
[...] 4 Phases of Money Merging [...]
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