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How Couples Can Establish a Financial System That Feels Both Fair and Empowering

Who pays the bills in your family?

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Who pays the bills? It’s one of the most basic logistical issues that arises within adult partnerships, whether marriage or another type of long-term pairing. That divvying up (or combining) of financial resources brings with it a whole host of behaviors, feelings and power dynamics with ramifications that often extend far beyond money to affect the entire relationship.

It’s also one of the taboo areas of interpersonal behavior. So many people are uncomfortable discussing their family’s approach to money management – even with their financial advisors. But in an age when women are nearly as likely as men to be the primary breadwinner in the family, I believe it’s time to bring this issue into the light.

Most of the research to date on styles of household financial management relies on a typology set forth in “Patterns of Money Management within Marriage“ by sociologist Jan Pahl (1980).1 Researchers Ashby & Burgoyne (2008)2 extended Pahl’s original four types to five main styles that couples use to manage household finances:

  • Whole wage system: one person manages all of the household finances
  • Allowance system: the main breadwinner provides a fixed sum for household management and keeps the rest for personal spending
  • Pooling system: the couple pools all or nearly all of their money and treat it as a collective resource
  • Independent management system: couples maintain individual control of their earnings and keep their money separate
  • Partial pooling system: couples keep most of their money separate, maintaining individual control over areas defined as personal, but pool enough money to cover expenses defined as shared

In examining these systems, it’s important to bear in mind that no one method is right or wrong, or even better or worse. However, the method a couple chooses does impact the relative balance of power within the relationship and how couples handle financial decision-making.

An equally important point, and one that’s somewhat surprising, is that earning money does not necessarily lead to control or power. For example, research shows that when income is truly considered “family money,” personal earnings are less likely to be seen as a source of power, having little influence on inequality measures such as time spent on housework (Pepin, 2018).3

In my nearly 20 years as a financial advisor, I’ve watched couples use each of these methods and noticed a number of patterns. A few of my observations include:

  • Most of the two-earner couples I work with choose either a full or partial pooling system. It’s interesting to me that the full poolers frequently offer an explanation of their choice by saying, “It works for us,” as though some kind of justification is necessary.
  • A pooling approach where both earners contribute their full earnings to be used together often creates resentment in the person who earns more.
  • Single-earner clients most frequently opt for the allowance system. I’ve seen a consistent pattern of power issues in the relationship arising when couples follow this system, so while it’s not necessarily inevitable (or is it?) it is something to be aware of.
  • The whole wage system results in a person (the non-earning member of the couple) who has no relationship with money. This is likely to become a significant liability when the person (usually the woman) is later widowed or divorced and finds herself without knowledge or experience of how to pay bills, plan a financial strategy or make financial decisions.
  • In every system, I’ve seen a strong association between a lack of financial transparency and subsequent divorce. Is the lack of transparency creating resentments that provoke the split, or does it simply reflect a lack of trust and openness that would lead to divorce anyway? That I don’t know, but I encourage you to think about the level of financial transparency in your own household and explore the issues surrounding it.

So who does pay the bills in your family, and why have you chosen to follow the system that you use? Does your system feel fair and empowering to both of you? Would a different system change the power structure or anything else in your relationship? These questions are valid and appropriate, so let’s bring them out into the open and really think about why we do what we do and how our choices affect our lives.

1 Pahl, J. (1980). Patterns of Money Management within Marriage. Journal of Social Policy, 9, 313 – 33

2 Ashby, K. J., & Burgoyne, C. B. (2008). Separate financial entities?: Beyond categories of money management. Journal of Behavioral and Experimental Economics, 37(2), 458-480.

3 Pepin, J, R. (2018). Inequality and the Household Economy. (Doctoral Dissertation). Retrieved from ProQuest Dissertations & Theses Global. (Accession No. 10825255).

Meredith Moore is a 20-year veteran of the financial advisory industry who specializes in bringing a customized approach to support the highly personal dynamics that govern her clients’ relationship with money and success. She is the recipient of numerous industry awards and a noted speaker and writer focusing on the intersection of power, money, and gender within relationships. Ms. Moore can be reached at www.artisanfsonline.com.

Meredith C. Moore of Moore and Artisan Financial Strategies, 1125 Cambridge Square, Suite C, Alpharetta, GA 30009 (770) 587-0281.Learn how to take control of your financial life and discover what makes women’s financial planning needs such a unique challenge with our free, white paper: https://www.artisanfsonline.com/.19.htm

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