Couple and Money: Making it Work!
Volume 25-3
It is no secret that money is one of the main causes of tension in a relationship. In this bulletin, we will address three topics. Why is money such an emotionally charged topic in a relationship? What are the various ways of sharing income and expenses? And, lastly, how can we go about to reduce the impact of differences pertaining to such a touchy subject?
Why does money create so much tension between couples?
For many people, money is a particularly emotional topic, as it touches on fundamental and deeply rooted principles, values or needs. Let's take Melanie and Bruno's situation for example. Melanie is an early childhood educator and works part time. She spends almost all the rest of her time taking care of three young children and running the home. Bruno is a private portfolio manager. He is very invested in his work, which gives him a sense of worth and earns him a substantial annual salary. As you can imagine, the difference between Melanie and Bruno's incomes is considerable, ten-fold actually. Therefore, shortly after the birth of their first child, Melanie expected that they would meet with a professional to sign a cohabitation agreement in which it mentions to equally split all their assets (properties, vehicles, pension plans, etc.) in case of a separation. However, Bruno likes to be in control in life and manage his assets the way he pleases. At the beginning, he was very put off by Melanie's suggestion of this type of arrangement. He even assumed that she might be with him for his money, not so much so because she loved him. The proposition hurt and upset him. Melanie, meanwhile, felt that Bruno was not really committed to her, that he did not care about her material security and that he did not recognize her contribution to their family and home. She viewed his reservation as profoundly unfair and indicative of a lack of trust. Further on, we will see how they came to understand each other better and reach an agreement.
Three basic ways of managing income and expenses
There are three basic principles when it comes to dividing income and expenses between two people who decide to share their destiny together: pooling income and assets, splitting expenses in proportion to income, and sharing expenses equally regardless of income. In the first case, couples choose to pool their assets and income. What is yours is mine and vice versa. This implies that the partners must consult each other and agree on their shared and individual expenses. Even if Erika earns more than Sophie, she will have to consult her if she wants to buy a new leather loveseat. Consulting does not mean telling the other person about a future expense or informing him or her after the fact. It means discussing the purchase and reaching a compromise that suits both partners before the purchase is made. This obligation to consult the other person can sometimes, if not often, make people cringe, but those who prefer to pool their income and expenses state feeling a greater sense of fairness, equity, trust and commitment. Proportional sharing means that each partner pays his or her fair share of common expenses based on their income. Catherine earns $70,000 a year, whereas Mark earns $30,000. She must therefore cover 70% of their joint expenses (food, electricity, rent, etc.). As for their personal expenses (clothes, entertainment and pension plans), they are free to do what they want with their money. This approach, like the first, involves some form of consultation for common expenses, but greater freedom in managing personal spending. This approach requires discipline and meticulousness in keeping track of who paid for what in order to then calculate who owes who and how much. When there is a wide gap in incomes, some people could be hurt by the fact that their partner can have a much higher standard of living and much more financial security (more entertainment, a better vehicle, more money for retirement). Last but not least is the equal share method, where each partner contributes 50% to all common financial expenses, regardless of the income gap. This is the "every one for himself or herself" method. Shall the lovebirds have similar incomes, this approach could work out. But, the wider the gap, the more potential for tension. The person earning less may risk going into debt to keep up with the wealthier partner's standard of living. In the long run, that person may feel more and more resentment, feel hurt and therefore become more irritable, more critical or downright more emotionally distant.
What can be done to live better with our money differences?
Whether a couple is having disagreements about money or any other problems, the important thing is to focus the conflict on the difference between the two partners, rather than blame the other person. When we presume that the conflict is solely the fault of the other person and that he or she is wrong, we tend to judge the other person by saying something like: "she's too stingy" or "he's too impulsive in his spending." We also have a tendency to want to change that person by imposing our views on him or her. That approach obviously does not work in the long term because most human beings do not take well to being judged or told what to do. The first step towards reaching a good agreement lies in an openness and interest towards your partner's position in order to have a better understanding of his/her needs, emotions and way of seeing the situation. Taking an interest in your partner does not mean agreeing with him or her, but rather being more accepting of the differences between you. When you make an effort to take an interest in who the other is, you gain more insight into what is behind his or her behaviour. You are then more willing to engage in a discussion in order to find solutions. The best agreements involve not only mutual, sometimes significant, compromises, but also getting an answer to what matters most to each one.
What became of Bruno and Melanie?
After numerous discussions that were not always easy or pleasant, they finally reached a satisfactory arrangement. Bruno, after having understood the importance for Melanie to feel secure and recognized for her contribution, agreed to sign a cohabitation agreement with a professional, which gave her a great deal of reassurance. She felt like she mattered to him and became much closer to her partner. In turn, Bruno realized that even though he had to share his fortune, he would still have plenty of it to do whatever he desires in life. More than ever before, he felt loved by Melanie, and that is what matters most to him at the end of the day.
To access confidential psychological support services, contact the EAP at 1-800-268-7708 or, for the hard of hearing, at 1-800-567-5803.