In keeping with the blog posted earlier this week about having the Money Talk prior to applying for a mortgage, here is some interesting advice from Kimberly Palmer’s new book “Generation Earn: The Young Professionals Guide to Spending, Investing and Giving Back” (Ten Speed Press). Here’s an excerpt from the book about one particular mistake that couple often make when it comes to finances;
Putting one person in charge of money
It’s normal to specialize in relationships – to delegate dinner planning to the best cook, and gardening to the one with a green thumb. But giving one person all of the money management responsibility can lead to an unbalanced relationship.
New York-based relationship therapist Bonnie Eaker Weil explains that no one should ever feel like he or she has to ask permission before buying something. “I call it ‘Mother, may I?’ You don’t want to get into that position where you’re the little girl, or you’re the little boy, and the other person is your parents.
You want to have your own money, and certain things are guilt-free, and you just do what you want with it. If you want to buy a latte, or lipstick, or a facial, you do not have to ask permission, because it’s your own money,” says Weil. Plus, in the event of a break-up, you want to make sure you know where all your money is and how to manage it.
It’s really fascinating how couples and families delegate financial responsibility and their incomes. One particular couple that I know has always divided their expenses 50/50 and they keep their earning completely separate. This can work well when both couples earn a similar salary but what if one partner earns less or stay at home with children? Another family that I know puts all income into a “pot” so to speak, from which all the household expenses are paid from. Everybody then gets a personal allowance paid to them, including their older children, and from that, personal choices for coffees, clothes and entertainment can be made. On the other hand, I grew up in a household where income was not divided at all.
Please share with us your methods of dividing income and household expenses and if it’s successful for your family. With money being one of the major causes of divorce, you never know, your contribution just may just save a marriage!
Kimberly Palmer is the author of Generation Earn: The Young Professional’s Guide to Spending, Investing, and Giving Back. She is a senior editor for the print and online Money & Business section of the U.S.News & World Report. She is the author of the personal finance blog Alpha Consumer on U.S. News and weekly on-air guest on WTOP-FM, the top news talk radio station in Washington, D.C.