Money - One Pot or Separate Accounts?

Couples who get together in their twenties or thirties usually combine their finances, for the most part. For couples who enter a committed relationship later in life, deciding how to handle money can be more complicated – or not. Some couples simply put their income into joint accounts, pay bills and daily expenses from that pot, and work together to set financial goals for the two of them. This may work well, or it may cause more trouble than it is worth.

If individuals enter a relationship with widely divergent values about money, financial resources, or financial commitments, joining finances may not be the best option. For example, if one person has a great deal of debt and has not shown a pattern of financial responsibility, it may be wise to defer joining financial arrangements.

In deciding how to handle money, couples may want to consider a variety of factors.

What is your “money style”? Are you a risk-taker or a security-seeker? Do you like to indulge, or is saving the most important thing to you? Can you accept your partner’s money style? Will it drive you crazy if he or she buys an extravagant item? Will you feel controlled and constrained if you have to accommodate to Syour partner’s wishes?

What do you consider to be fair as far as money goes? For some couples with big differences in income or assets, paying a proportionate share of expenses feels fair. For example, Marianna and Steve met in their mid-fifties and are now living together. Steve is well-to-do and makes about twice as much money as Marianna. She is thrifty and has always managed to live within her restricted means. They don’t feel comfortable about putting all their money into “one pot,” but sharing expenses equally would place an undue burden on Marianna. They decided to set up a joint account to pay all shared expenses, such as rent and utilities, and each contributes in proportion to their income, with Steve putting in about twice as much as Marianna each month. They each pay for their own personal expenses, and Steve occasionally treats the two of them to expensive restaurant meals or other entertainment, while Marianna foots the bill for more modest evenings out. Each feels this is a fair arrangement.

Bud and Taylor, on the other hand, believe that a committed relationship means sharing everything, and they combined their finances after marriage. They took the time to discuss their financial priorities and to work out some compromises. They saw an attorney and made separate provisions for family members in their wills. They sit down together once a month to pay bills, discuss their finances, and make decisions about money matters. Neither of them keeps tabs on where the money comes from – they both consider it “their” money and have an equal say in how it is spent. They have agreed not to spend more than $100 at any one time without talking to the other, so there are no unpleasant surprises when the credit card bill arrives.

There is no right or wrong way to make money decisions in a relationship, as long as both partners feel respected and believe that the arrangement is fair. Money can be a difficult subject to discuss, however, so it is important to set aside time and to pay attention to your partner’s values and priorities as well as your own.

Northwest authors Jennifer Y. Levy-Peck, PhD, a psychologist, and her husband Charles Peck are write a weekly column on midlife relationships. They are working on a new book, "Magic at Midlife: Your Relationship Roadmap for Romance After 40."

Previous Magic at Midlife Columns:

Falling in Love Later in Life

To Marry or Not?

Conversations About Death for Midlife Couples

The Couple That Laughs Together, Stays Together

Vacation Time! Leave Your Baggage at Home

Your Place or Mine? Moving In Together

How to Help Your Partner Calm Down

Creating Shared Goals

Having the “Senior Safer Sex” Conversation

Planning Your Wedding (for Mature Couples)

Too Young or Too Old to be Your Partner?