Financial independence in a marriage - important or not?

Personal Banking
#1

Lately I’ve been thinking about money and relationships and how they interact.

I’m in a long term, serious relationship and thus far we have kept our finances seperate. We’re at the stage where marriage is on the cards, so we are starting to talk about how our finances should be organised, were we to join them.

My questions are: What are your thoughts on joint accounts, over and above the convenience of day-to-day household spending? Should each person keep money aside for themselves, in an account that the other does not have access to?

I’ve seen examples of this in an old colleague whose mother on passing away had left her a commercial property that provided her another income stream through rent. She was happily married but the rent from that commercial property went directly into a personal account that her husband had no oversight over. She used it now and again to fund clothes purchases or whatnot, but also said that she’d given loans to her adult children from time to time when her husband couldn’t be convinced to give loans from their joint account (things like weddings, starting a business etc. that required a substaintial amount of money)

I’ve also seen friends and acquaintences come out of marriages in financial turmoil with nothing to fund their new start.

Obviously I love my partner and am deeply committed to our relationship, but I’m also a logical person. Plans don’t always work out, life can take turns that you don’t expect, and not all marriages last the distance.  Is it naive to not have a financial plan-B in the event that your joint account becomes compromised? And even if your marriage lasts,how important is it important to maintain some sense of financial independence?

#2

I’m single and have never been married so my opinion comes from that perspective. Every person should have a financial plan B regardless of whether they are married or not. If I ever got married I would retain at least one personal account for myself. Certainly I may share the contents of it with my husband but I’d like to keep a sense of ownership. Regarding financial independence - that’s a no-brainer. If you learn how to be financially independent on your own you will never regret learning that skill. You will always find a use for it even if you remain married for life. People come out of businesses like they do from marriages. They wait until something drastic happens and then blame the other party. Because they had no plan B. That’s right, plans mostly don’t work out, businesses and marriages fail. That is just part of life. Its how you pickup and move on that counts. You’ll have a hard time doing that if you’ve spent your life letting other people give you your sense of independence.

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#3

I’m single, mid-30’s and never married.

People cut their own paths through life and nowhere is this more true then relationships. What works for one couple may not work for another. Therefore “do what thou will” when it comes to relationships and finances - in other words “what works for you”? and “what makes you happy”?

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#4

I don’t see the point in having a plan outside of the one my partner and I have (22, 24 - engaged).
We’re both very level headed people, and in the circumstance that we were to split, we would both handle the situation fairly. As it stands, I have family investments, if we get to the point where they will go towards our life together, and then be split should we break up, the purchases made would be split too.  While they are still in the family name, they are mine and continue to be held as investments.  My partner however is the one earning the income currently (I’m studying), so our lifestyle is curtesy of his hard work. I would not see it as fair, to walk away from our relationship without having repaid the lifestyle he has facilitated while we are together (and I knowingly made this decision when we first moved in together and discussed finances).  I would negotiate my investment funds over and above the rest of the asset division, to make that work in the event of our separation.
At the end of the day, if you and your partner are perfectly moral people, you shouldn’t need a plan b.  If there is the chance that your partner would rip you off, why would you put yourself in the position where this is even a question?
In saying that, we came together when we were both broke university students. Anything we have, we have obtained together (the only exception being the family investments that I have, that they are more than welcome to if we agree on the expenditure).

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#5

Yeah I think it’s less about the potential to be ripped by your partner - in time you’d work through the details of the separation and I’m sure assets would be awarded equally. It’s more about being able to leave in the first place. Just maintaining a sense that if you had to make a major life change with short notice, that you could.  Kind of like, a fund to allow you to make the decisions that are best for you, so that finances aren’t something that would present an insurmountable barrier. For example, say you were in an unhappy marriage but had a mortgage to pay and couldn’t afford to leave and rent a new place while your assets were being divided and the house sold (this can take months, sometimes years), so had to stay.

I don’t know, I guess I’m kind of thinking along the lines of a contingency fund in case you run into bad circumstances and need to get out quick. When it comes down to it, my parents live in the same city as me and I know I could go to them, but that isn’t the case for a lot of people and it won’t be the case for me forever, so just really interested to know what others think. Thanks for weighing in @michaelnz @ford @karyntaylor!

#6

I suggest if someone is not willing to take that risk they should seriously consider if getting married to that person is an appropriate choice. It could also be indicative that marriage is not right for them at that point in time.

#7

Hmm interesting @michaelnz, seems quite all-or-nothing though? Are you presenting a scenario where self-interest = lack of commitment to marriage? I don’t think that an interest in financial independence in a marriage suggests a lack of commitment to the relationship. Should you have to ‘take that risk’ at all? Surely maintaining financial independence doesn’t need to mean that you are not fully committed to your choice to get married?

#8

Life is a risk. We all play our cards and hope for the best. Odds are the other party is taking a chance too.

#9

And we hope that if negative consequences come out of that risk, they don’t stay with us for life.

#10

I’m getting married at the end of the month and my partner and I have individual accounts because it just works for us.  We own a house and our lives are very intertwined but financially for us it works having individual accounts.  We have different spending habits so rather than having to discuss each purchase we are able to make the decision ourselves, of course we talk about it and generally agree because that’s what being in a relationship is about but it doesn’t need to equal joint accounts.

We have a joint account for our mortgate and joint bills which we each deposit a certain amount into each pay which covers all joint bills and then the rest is ours to do what we want with.  I think its really up to each couple to work out what works for you, for us this is what currently works.  Its not so much about having that security fund but I can buy what I want when I want (which is frequently) where for him he saves up and makes big purchases less frequently.  Each couple is going to be different.

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#11

Lets start by saying I’m a little older than some of the contributors, I have been married and had my husband out of the blue leave me a few years later, I lived with a partner who was killed, I almost own my house plus I’m a romantic who likes to believe the best of my partner and that we will live happily ever after, forever.  I think a level of financial independence in a relationship is important and so are joint financial goals and accounts. Most important to me is to be open with financials and know your, and your partners money personality, if they have debts/ poor credit rating and what are the joint bills (what it costs to rent/ run the house), its like a financial health check.  I’d like both partners to have accounts that are theirs to do what they want, this is discretionary spending money for gifts, shoes, going out with friends.  It may be large or small discretionary account.   

I mentioned being romantic and believing in the best.  What I found is the man I married was not so sweet when we were dividing up assets.  People change.  And the partner that died, we had joint accounts and personal accounts and he’d been open about his financial affairs.  When he died unexpectedly this helped enormously to know key regular payments in our personal accounts.  People tried to tell me they were for x and I knew they were for Y and could easily prove it, and the outcome had legal ramifications. It was a stressful enough time already but having been open about our finances (joint and personal) made life easier. 

The other point is I have a house (more owned by me than the bank now), many guys I’ve dated have no assets.  I’ve got the house in trust, I’ve worked hard for this and don’t want to loose it I see it as ‘mine’ and anything with a new partner that we jointly do together as ‘ours’.  Finances are tricky to talk about and agree with smattler that every couple is different.

#12

If/when I get married I expect it will last and why wouldn’t it? There is enough stuff to think about as it is without adding additional blocks in the way. I used to use online dating (don’t any more - I only work by word of mouth) and the #1 turnoff is ladies who seemed to be obsessed about stuff which had nothing to do with me…

#13

@pots_of_gold  - where for -art thou- is the rainbow? I believe in the truth.

I’m single and have no intention of ever getting married.
Our world is geared for couples. Today it takes two people to pay off a mortgage.
My pot of gold won’t be at the end of the rainbow.

#14

I think you need to think of the reasons you are wanting to getting married.  What purpose will this fulfill?

I believe it is a joining of two people becoming one,  that would include your finances. 
Most marriages fail due to financial reasons, why would you want to become another statistic?  Share your burdens, joys and debts. 

Any debts incurred by both of you while married are both of your debts (despite what any legislation may say), if things don’t work out split the debt down the middle or something, but don’t plan for failure.  The moment you start planning for your marriage to fail is the first step to it actually failing.

Work together to ensure your finances do not separate you from your spouse.  Any form of separation in a marriage can lead to arguments, dis-trust and a whole array of issues.  Be as open an honest with each other.  Learn to trust your partner, work together not against each other.

I believe its a good idea to have X amount each week/month to buy whatever YOU want, without having to answer to your partner, but in general keep your finances together.  Especially if children are involved!!

That’s my thoughts on the subject anyway

#15

You say that debt incurred by both of you while married are both of your debts.
Would that only be the case though  if you had a joint loan or joint credit card. And you would have both signed the lending documentation.

Even if you are married can you not still have a credit card or a personal loan in your own name only.
So if you default then the money can’t be recovered from the other spouse.
Or does the system not work that way?