While it is far form a universal rule, I think most people who see lots of separating or divorcing couples (Therapists, Accountants, Lawyers, Judges, etc.) would agree that while the underlying problems may be more subtle and hard to identify, there is usually a triggering event that pushes one or the other partner over the line from ambivalence to a decision to move on.
This triggering event is usually either an affair, or the latest in a long series of arguments over one of four chronic issues; sex, money, family relationships (children or in-laws) or burden sharing (working, household chores, etc.). Occasionally, the triggering event is none of the above; one partner or the other says the wrong thing at the wrong time, and the other partner thinks he or she just “can’t take it anymore.”
Human relationships are just so baffling. Sometimes a moderately strong and enduring relationship is ended based on a single event or even a sentence. Other times, relationships that are objectively hurtful to one party, or both, continue long after the sell by date has expired. Then, there is the “rubber band effect” in which the parties go though cycles of threatening or actually separating, alternating with repeated reunifications, whether of short or long duration.
We won’t try to diagnose or fix any of the other common problems, but there is one area that can be helped by a pretty simple set of techniques that balance each partner’s needs for financial security, trust, and individual autonomy. The underlying principle is “no surprises.” The plan calls for most income and assets to be shared, and for full accountability to be transparent. However, each party maintains financial autonomy with respect to a more limited subset of the couple’s finances.
Part 1- Joint Accounts
The parties create a joint savings and joint checking account. A portion of each party’s paycheck gets deposited into the savings account, and all of the remainder goes into the joint checking account for “household operations.” That account is maintained on a computer or by a checkbook that both parties have equaled and unlimited access to. One party is responsible for reconciling and balancing the account, although the other can see the bank records at any point.
The parties agree that neither will expend funds out of the joint account above a relatively low limit ($100, $200, $ ??) except with the other party’s consent.
The household also has two joint credit card accounts. The first has a relatively high limit and is used for major purchases, family vacations, etc. This card and the joint account are never used for internet purchases. The other has a quite low limit, and is used exclusively and only for internet purchases. This limits the family’s exposure if the transaction is fraudulent, or if identifying information is hacked into.
The joint savings account is the family’s reserve, and is not to be used by either party except in emergencies, or after careful consideration and by joint agreement.
(It is always easier to save, if the funds never actually go into or out of a person’s actual or virtual pocket.)
Part II – Individual Accounts and Stipends
The parties agree that each party will receive a monthly stipend from the household account. The stipends do not need to be equal, and need to take into account the different needs each party has for day-to-day operations. One party may work at home, and make all the lunches. The second party has a work situation with daily commuting costs, and a frequent need to go out to lunches with colleagues. The stipend amount has to take these into consideration, but should not be too much more than the minimum necessary.
Each party’s monthly stipend is transferred into a single checking account in that party’s name only. Once transferred, those funds are not the other partner’s business! Each party also has a credit card with a modest limit in her or his name only. That party is responsible for managing that credit responsibly, and making payments out of the stipend.
Obviously, this system can be subverted by a partner who goes off the reservation. But most people won’t do that, and will act in accordance with their agreement to operate under this structure. The system is designed to prevent either party from over-spending or incurring too much debt, or at least from doing so without the other partner’s knowledge. This should increase both partners’ feeling of security about the couple’s finances.
However, everyone needs some level of fiscal autonomy, and to should have the opportunity to occasionally buy something just for themselves, or something that they know the other partner would not agree to purchase. The system is designed to allow for this, while also keeping those expenses to a level that can’t threaten the household’s basic financial security.
A forthcoming post will address how to manage long-term joint assets, such as real estate and investment accounts, and will cover the differences between marital, non-marital and community property; and between holding property as joint tenants or tenants-in-common.
Senior Policy Advisor