Yours, Mine, Ours

Sun Herald

Sunday October 5, 2008

Danielle Teutsch

The point at which romance meets finance is not always straightforward. Are we better off keeping our money separate? Or does the couple that pay together stay together? Danielle Teutsch finds out.

Love and money - it used to be that what is mine is ours. The man of the house would bring home the weekly wage, hand over a portion to the missus, pay the bank manager and, if lucky, stash some cash under the bed for a rainy day.

Today, it is more complicated. He may come with his own share portfolio and a couple of kids from his first marriage. She may have two credit cards and

an investment property she bought before they met. Naturally, they have each come to the relationship with long-held bank accounts and a complex system of direct debits. It is true love, and they may be sharing a bed, but to what extent do they mingle their money?

Lina and Simon Christie, from Sydney's Neutral Bay, prefer to keep it separate. The couple, who have been married for two years, have their own bank accounts and credit cards. To make it easier to do their yearly tax return, they had the bank split in half the mortgage on their investment property, which they bought 10 months after their relationship started.

Lina, 36, a senior business development manager for PricewaterhouseCoopers, stresses that it's not from lack of trust - their savings accounts are linked, meaning they can view and transfer money from them at will. "We were two independent people coming together and it was easier to set it up that way," she explains.

Lina, who has been married before and has a 13-year-old daughter from that relationship, also admits, "there may have been some caution in there. If things had gone pear-shaped, it would not have been too difficult to split [finances]."

She shares a credit card with Simon, 39, an investment banker, but they also each have their own. "There is a certain level of independence that comes with that," says Lina. She will use hers to buy shoes, cosmetics and other personal items. Recently she splashed out on a $2000 painting. "I would have thought about it more if I was buying it on the joint credit card," she says. "It's not as if I feel I would have to explain myself, but the fact that it's my own card makes me feel empowered."

Married couples such as the Christies, who draw a line down the middle of their finances, have long been seen as the exception. But there is evidence this is changing. Professors Supriya Singh and Clive Morley analysed data from the 2006 Household, Income And Labour Dynamics In Australia (HILDA) Survey and found that while 50 per cent of married people had joint bank accounts only, 33 per cent had a mix of joint and separate accounts and 16 per cent had single accounts. They found that those most likely to hold a separate account were women, people born in a non-English speaking country and those with a higher education.

Robyn Johnson, a financial planner for the Commonwealth Bank, says separate bank accounts are becoming more common for couples. "It's convenient, as people get their wage paid into their account. It can also help with budgeting. One partner's funds might be used for living expenses, the other for saving," she says.

Money also has the potential to cause conflict in relationships. In a 2004 Newspoll survey commissioned by BankWest, seven out of 10 couples admitted they argued over cash. Problems were not restricted to low earners, with the survey finding a person who earns more than $60,000 annually is more likely to argue with their partner over money than someone earning less than $30,000. In the 2006 Relationships Indicators Survey, conducted by Relationships Australia, 18 per cent of couples said financial difficulties were negatively affecting their relationship. One Sydney woman, who did not want to be named, tells how she ended up filing for bankruptcy and divorcing her husband because of his spendthrift ways.

"He always had to have the best of the best," says the 43-year-old. "He'd wake up one morning and decide he wanted a new plasma-screen TV or stereo, and if we didn't have the money to buy it he would get a store credit card, which has high interest rates."

It wasn't until a year into their marriage, when their daughter was born, that the couple found themselves seriously in debt. They were juggling six credit cards and three personal loans just to pay bills. They spiralled into $70,000 debt and were constantly fighting over money. Two years after they married, an accountant advised the couple to declare themselves bankrupt. They separated six months later.

Anne Hollonds, CEO of Relationships Australia, says in most cases there is no reason why separate finances should spell doom, or mean that "one person has a foot out the door".

Despite money's reputation as a passion killer, Hollonds says it is not usually the major factor precipitating relationship breakdown. "Money has symbolic value in a relationship, because it gives you power and control," she says. "Sometimes a fight about money is more about trust, communication, anxiety or one partner not feeling loved. Or it could actually be about the money, which is much easier to resolve."

Conflict over cash often comes down to different attitudes towards managing it. Robyn Johnson recounts the case of a young couple who had a $2 million Lotto win. Not accustomed to having so much cash in the bank, they were whooping it up to the tune of about $200,000 a year, spending lavishly on holidays and material goods. "I tried to point out that it was going to run out and they would end up on social security. The man understood but she refused to listen and it ended in an open argument. She had no intention of curbing her spending," says Johnson.

And then there are the secret stashes. "You'd be surprised - we have a number of clients who have a credit card their partner doesn't know about," says Johnson. "There's one big spender who pays off her card separately. Each time we have a meeting with her and her husband, she warns us not to mention it."

But most conflict, Johnson says, is far less dramatic and stems from the simple fact that many families are overstretched. Last November, the Housing Industry Association analysed 2006 Census data to show that 650,000 households nationally were experiencing "mortgage stress" - that is, spending more than 30 per cent of their income on the mortgage.

"Where we see the most conflict is with the couple who are trying to pay a large mortgage, put kids through private education and go on a nice holiday as well,'' says Johnson. "People want a better lifestyle these days. But it causes extra stress levels."

Carly and Rex Patrick, from Port Hacking in Sydney's southern suburbs, found parenthood to be a major stress on the household budget. Carly, 33, put her career as a lawyer on hold after the birth of Amelie, now 3, and Audrey, 21 months. She has gone from an income of $2000 a fortnight to about $400 per week, which her husband gives to her for household expenses.

"It's been a test, not only because of the financial strain but also I've had to battle with my own identity since having kids," says Carly. "I'm dependent on my husband financially. I have accepted it now but I struggled for the first two years. I hated having to ask for money for a haircut."

Rex, 41, who specialises in naval acoustics and sonar, does not remember arguing about money with Carly before they had children. But they have had some tense moments since. "When things got tight, there were times I didn't agree with what Carly was spending money on," he says. Carly, for her part, says Rex sometimes didn't understand the high cost of everyday items such as nappies.

Even though Carly has had no regular income stream for more than three years now - apart from the trickle of royalties from her hobby of writing children's books - she has insisted on keeping her separate bank account. "It's an identity thing. Just because you are married doesn't mean you have to combine everything," she says. "I wouldn't have it any other way."

Ultimately, keeping some aspects of finances separate is more of a personal choice than anything else, says Clinton Waters, director of Melbourne property finance company More Rosh & Waters.

In particular, if couples are coming together or after a previous marriage breakdown, there is a tendency not to pool their finances. Research by HILDA's Singh and Morley found that of these, 44 per cent keep separate accounts and 28 per cent have

joint accounts, with the rest keeping a mix of both. De facto couples were even more hesitant about getting into bed financially, with 58 per cent keeping separate accounts and only 14 per cent keeping joint accounts.

Financial planner Robyn Johnson says the complexity of modern relationships is spilling over into people's financial lives. "With second marriages, often the assets will be kept separate, particularly if there are children," she says. "Or if someone comes into the relationship with property, they will tend to keep it separate as well."

Clinton Waters believes that even if people start relationships with strictly separate financial affairs, it is inevitable that they blend over time. "Finances become more entwined the more the relationship lasts. People may start a business together, buy an investment property, have children, set up a family trust - there's no way to get out of it."

Joint ventures

Beverley Brough, 51, and husband Andrew, 56, from Melbourne's Glen Waverley, say joint bank accounts make perfect sense. "To me, marriage is a partnership. You share everything and you trust each other," says Beverley. "Because of our finances, and the way we've dealt with them, we have had 30 years of very happy marriage."

The couple has taken turns being the main breadwinner. When their two children were born, Beverley stayed home. Then, when she started up a direct-sales business when the children were three and five, it was Andrew's turn to be a full-time carer. Now, they both contribute equally to the family budget, with Beverley working as a speaker and networking trainer, and Andrew as a medical scientist at Casey Hospital in Berwick.

Andrew believes the couple's one-pot policy has neutralised any possibility of arguments over money. "It's really worked for us," he says. "There is no thought about 'my money' or 'your money'. Any money that comes in is family income."

Adds Beverley, "It helps that neither of us are big spenders and if we make any large spending decisions, we do it together. We have made some bad financial decisions over the years but we've made them together."

These are sentiments echoed by the 2006 Household, Income And Labour Dynamics In Australia Survey data, which found that four out of five couples make the decision on large purchases, such as cars and electrical appliances, together.

Nicki and Chris Walsh, from Sydney's Epping, set up their first joint bank account when they were engaged nine years ago and, like the Broughs, have combined their finances since. They have a joint savings account, credit card and mortgage. "We felt we should start as we meant to go on," says Nicki, director of a marketing company.

While Nicki, 33, came into the relationship with considerable savings, she jokes that Chris, 32, "brought his bike and his computer". The tables turned when Chris, an IT manager, started out-earning Nicki. Then she shifted up in her company and, for a while, was the higher income earner. They reversed roles once again this year when Nicki gave up her salary to start her own business, Blaze Marketing.

"We've always thought of it as 'our money'," says Nicki. Chris agrees, "We don't really notice who earns what until we do our tax at the end of the financial year. It's never been a competition."

© 2008 Sun Herald

Back to News Index | Back to Home