The challenge of maintaining a healthy financial discipline while having varying views on money affects most couples in the United States. For some, one partner may be inclined to save every penny earned, while their significant other may spend money the second the direct deposit hits their account. Others may feel insecure about how much they make relative to their partner, as in the case of this average American marrying an inheritor who has been handed down a large family estate. One way to mitigate the stresses of finances that has become increasingly popular among couples is keeping separate bank accounts.
Keeping separate bank accounts allows for more flexibility in spending as an individual (and you can more easily purchase that birthday gift for your partner in secret!). Having full control over your own finances can help you have more peace of mind about your partner’s spending habits; be accountable for your own debts without having to absorb your partner’s; and feel like you’re able to contribute, especially for those marrying into money. However, there are complications that may arise from keeping a separate bank account from your partner.
While the financial gap is narrowing, most people in America still earn a different wage than their significant other. This may lead to a feeling of unfairness when paying an even 50/50 split on the mortgage, bills, and groceries. While there are many options for addressing this dilemma, a common one is creating a formula that creates an even contribution amount for each partner, as shown below:
Partner A: Earns $150,000 annually; Partner B: Earns $75,000 annually;
Together: $225,000 annually; Monthly Bills: $5,000 monthly
Step 1: Finding the percentage for each partner
- A: ($150,000 / $225,000) x 100 = 66.67%
- B: ($75,000 / $225,000) x 100 = 33.33%
Step 2: Creating the contribution amount per partner
- A: $5,000 x 66.67% = $3,333.50
- B: $5,000 x 33.33% = $1,666.50
Step 3: Continue to recalculate formula as needed
If you’re not a spreadsheet lover and would prefer to have the formula automatically updated for you, there are apps available to help you and your partner in this journey. If you would like a more human approach to figuring out the best setup for your scenario, clients of The Wealth Conservancy are always welcome to reach out and seek guidance from their advisors. If you’re not a client but are interested in learning more about how The Wealth Conservancy can help with the complex aspects of financial planning, such as marrying into a family that has given your partner an unexpected windfall, please give us a call or submit a consultation request to speak confidentially about your specific circumstances.