The 10th Man

Marriage and Money

May 2, 2019

People fight about money all the time. It has been quantified. A third or more of all arguments in marriages are about money.

Usually this falls into one of two categories:

  • Spouse A thinks that Spouse B spends too much money.
  • Spouse A thinks that Spouse B doesn’t spend enough money (i.e., is a CF)

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We talked about this in a previous edition of The 10th Man, where I advocated for married couples to keep their money separate. My wife and I have always kept our money separate, for 21+ years. Our system works great for us.

Some people agreed with that, and lots of people didn’t, mostly on religious grounds: a couple bonded in marriage should work together, etc.

This essay isn’t strictly a personal finance essay—it’s actually a relationship essay about how to work together towards a common goal, because you’re on the same team. It can be hard to remember that sometimes, when the relationship turns adversarial. The irony is that people tend to work better as a team when they are two individuals, not Siamese twins.

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The 0.1% Rule

I was reading some personal finance blogs recently and I came across something called the 0.1% Rule. The idea is that neither partner should have to get permission from the other partner for any expense under 0.1% of their combined net worth. So if the couple has a $100,000 net worth, you don’t need permission for a $100 expense. If you had a $1,000,000 net worth, you wouldn’t need permission for a $1,000 expense. And so on.

The theory is that if you rack up enough large expenses it will eat into your retirement savings over time, so you should first check it out with your spouse.

I have another description for the 0.1% Rule: common sense. For example, I recently bought $6,000 worth of DJ equipment. Even though we keep our money separate, I told my wife about it first, as a courtesy. She was cool with it. It’s kind of a big expense, and it would have been weird if I kept that a secret from her. It wouldn’t have been a secret for very long, anyway, when all the boxes got delivered to the front door.

Even if you keep your money separate, don’t go out and buy a new car on a whim. That’s not good for the marriage. Again, it’s common sense. You’d want to keep your spouse in the loop on a big expense like you’d want to keep him/her in the loop about anything else.

I also don’t much like the idea of getting “permission” from the spouse to make a purchase. That bothers the hell out of me. My wife doesn’t own me, and I don’t own my wife. My wife doesn’t need my permission to go out and have drinks with the girls. I don’t need permission to fly to Vegas with my brother. As a courtesy, we’ll keep each other in the loop—but that is the extent of it.

Apparently, there is a new term in the lexicon for not keeping your spouse in the loop. It is called “financial infidelity.” This is when one partner goes out and makes a big purchase or takes out a loan, or opens a separate account without the knowledge of the spouse. It is dishonest behavior.

Dishonesty about money can be just as damaging as dishonesty in sexual relations. And it’s easier than ever to do, because there are no longer any paper statements being delivered to the house.

If you are at the point in your relationship where you are sneaking around to buy stuff, this isn’t a money problem. It’s a relationship problem, and it’s bad.

And it’s a two-way street—yes, the person sneaking around is at fault, but so is the person who has created an environment where the other person feels like they have to sneak around. As usual, it comes down to open and honest communication. When that disappears, people hold each other in contempt.

It helps to marry someone who has the same attitudes towards money, but it’s not necessary. In my marriage, I’m the risk-taker who spends a bit and my wife is the cautious saver. We make it work because we communicate. Sometimes I get my way, but not always. Sometimes she gets her way, but not always. If one person got their way all the time, it would no longer be fair. We’re a team. If it’s not fair, then there’s no team.

Life Is Short

Life is too short to fight about money. Especially inconsequential amounts of money. If you are getting (or receiving) crap for making small purchases, it’s perhaps time to take a step back and evaluate the relationship. For two reasons:

  1. Your standard of living in retirement is not the product of millions of small decisions, it’s the product of one or two big decisions.
  1. You shouldn’t sweat the small stuff. Almost everything is small stuff.

The funny thing is that people will go to the mat on $20 purchases, but when it’s time to take out a high six-figure mortgage, groupthink takes over and the married couple walks into a giant spinning blade.

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If you’re going to argue about something, argue about the thing that could blow you sky-high, not the bottle of wine you picked up from the grocery store. I watched a lot of people tomahawk themselves financially in 2006 and it was usually because one partner fell in love with the “dream home” and the other partner just couldn’t say no.

Most people can resolve most disagreements with sincere communication—unless one partner has severe pathological spending (or lack of spending) issues, issues that are deep-seated and hard-wired from childhood trauma.

Those people are unlikely to change unless their behavior causes them a great deal of discomfort. If you are married to a person like this, and you love them, make do the best you can. These are not easy issues to deal with.

Figure out a system that works. Do more of what works and less of what doesn’t—not the other way around.

Jared Dillian
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May 3, 2019, 2:43 p.m.

Good article. Although we have separate accounts that we individuality use, both our names are on all accounts. We both grew up poor so our approach was
the same when it came to spending.
Even when we joined the top 1% for a few years our approach to spending remained the same. That’s worked for 50 years. Our approach to investing and risk is very different. I’m more of a risk taker and my wife is at the extreme other end. I was always open to her on investments but she said early in our marriage she would rather me make those decisions. When it comes to major investments (other than in the market)I always discuss it with her and actually want feedback. I’ve noticed even though we have been retired for many years and have plenty of money we approach our finances much the same as we have for the past 50 years…… I guess it boils down to communication and being transparent and keep doing what works!

marilyn kelly

May 2, 2019, 5:11 p.m.

I strongly believe that married couples should have joint finances.  I have no religious reasons for this; it’s pragmatic.  It is part of the glue that holds a marriage together.  Having separate finances is much easier if you want a divorce.  It is much easier to walk away at the 1st sign of trouble.  I grew up in a common law state but I’ve been a bar member in community property states also, and have come to believe that community property is more equitable - simply fairer.  So that’s a second reason.
What do you do about kids?  If the wife is a full time mother does she have to apply the husband for funds? If you’re sticking them in day-care do you pay half each?  Incidentally there are several unpopular studies showing that children do better with a full time mother than any kind of day care (other than a close relative eg gran).  By “do better” I mean they are less aggressive, better behaved and less prone to get into trouble. That’s a third reason.

I would like to see a study on divorce incidence between sharing finances and separate finances.  Anecdotally, my experience is that couples with separate finances divorce more often.

Frankly I see it as the richer partner, usually the husband, has one foot out the door from day one.

May 2, 2019, 12:40 p.m.

Good article.  This is the stuff they should teach in schools.