Avoid Money Fights – Open 3 Bank Accounts
A close friend of mine recently got a Thermomix for her birthday which brought me back to this 1960’s advertisement.
Thankfully we have moved on to such an extent that we can actually laugh at how insanely sexist it is.
But moving on has brought its own complexities. With lines blurred as to whom in the relationship is responsible for what – conflict looms. While, only a small minefield in the early stages of a relationship (probably masked by the goggle eyes of love), kids bring on explosions which are a little more extreme in nature. This is a natural outcome when one party accepts tasks for zero compensation in a world defined by money.
Before we get into Thermomix mode and jump into an immediate solution – let’s look at the core problem. Why are so many fights in relationships caused by money?
In my 15 years of experience (yes, I did get married extremely young) I would say that the major causes of conflict are spending and control.
Usually one partner is perceived as being the big spender or extravagant by the other. (Personally I have gone through this many times but I won’t divulge which one of us is the accuser and which is the accused.)
Another is what the money is spent on. As I have probably alerted to in previous newsletters, I have no problem splashing out on a gorgeous pair of heels, but will wince at the thought of a small taxi fare (my husband is completely the opposite).
Control is the other big issue. ‘He/she who has the gold makes the rules’. Usually the one who earns a larger portion of the income controls access to the funds.
The modern family typically operates on multiple dimensions – he works less/ she works more/ he takes care of kids/ she takes care of household – the possibilities are endless. While balance and equally is hopefully sought it is rarely achieved.
So how do we deal with this stuff? How do we avoid conflict about money in a world where there is no clear rules and constant competition for access and control.
One of my biggest tips is to have 3 Bank Accounts – Yours, Mine and Ours
The advantages
– autonomy
If you are old enough to enter into a marriage or long term relationship, you are old enough to decide how to spend and manage your money – whether you have earned it through the workforce or whether you a stay at home parent (more on this another time).
– security
It is so easy when you know someone has your best interests at heart and they just take care of things – pay the bills on time and manage the investments responsibly. But what if something happened to them. A time of emotional upheaval is hardly a time to learn new skills. This is why I recommend managing your own super and investment accounts as well.
– romance
Such a beautiful pendant – oh I see you bought it on ‘Catch of the Day’ the day before – not so romantic.
– privacy
I don’t want to know how much he spent on his whiskey collection as much as I don’t want him to know how much I spent on my hair.
– working together
This to me is the most important. The joint account is not just for paying the mortgage and the bills – it’s for traveling to Europe and building an infinity pool. It’s your shared dreams.
The disadvantage
-keeping and balancing 3 separate accounts (unless you are a politician, this is really not that difficult)
The alternative
Lump everything together into one account. This typically leads to one person taking control. Being a traditionally male field, this is typically, although not always, the man (even when the woman earns more). This leads to allowances or the person not in control having to ask permission to spend money – pretty demeaning and not conducive to a happy relationship.
So, three bank accounts sounds like the better option.
As a financial planner, I help you work on the shared account – helping you to put together a strategic plan for your finances so that you are able to achieve your dreams. I work with conflicting goals and different risk appetites until you have a plan that you are both happy with and will stick to.
Disclaimer
Marisa Hoffenberg and Growth Point Financial Pty, Ltd. Are Authorised Representatives of Synchron, ABN 33 007 207 650, 243313. This is of a general nature only and is not intended as personal advice. It does not take into account your particular investment objectives, financial situation and needs. Before making a financial decision you should assess whether the advice is appropriate for your individual investment objectives, financial situation and particular needs. We recommend that you consult a professional financial adviser who will assist you. The information and certain references, where indicated, are taken from sources believed to be accurate and correct. To the extent permitted by the law, Synchron, its representatives, officers and employees accept no liability for any person that relies on the information contained herein.