How To Manage Money And Marriage

Bethany and George Marc-Aurele, entrepreneurs in Hoboken, N.J., have been married nearly four years. She's got her own all-ages dance school in town, and he runs a technology recruiting firm across the river in New York. Bethany is a spender; George is not. While they were engaged, Bethany got pregnant with their first daughter. Without talking about it--or even asking--George set up separate accounts for each of them, explaining that he wanted to be able to keep track of their expenses.
The arrangement isn't ideal for Bethany, who says she feels out of the financial loop with separate accounts. As it is, she uses revenue from her dance school to pay weekly household expenses, like babysitting for their two daughters, dry cleaning and groceries, and he handles the mortgage and manages their investments. "We've had discussions about it and I've gotten upset with him," she says. "He wouldn't put me on a joint account. He said he was worried that if he put me on, our money would fizzle."

But experts say family finances don't have to be a source of angst--as long as couples can sit down and discuss things calmly.
In Depth: How To Talk About Money With A Loved One
Wedding vows, shared finances: It used to be that one led to the other. But in the last 20 years, that formula has been changing, says Olivia Mellan, a psychotherapist and author of several books on money and relationships. Some married couples are now opting not to co-mingle accounts, and if they do, they are rewriting the rules about spending and saving.
Many people don't find out until after their honeymoons that their money styles differ: One is a free thinker (and spender), and the other is a conservative who saves every ATM receipt. Other couples, especially older ones who are long set in their ways, confront a new dynamic if one partner suddenly breaks rank and wants more autonomy--often after inheriting money.
Such disputes can doom a relationship. "Even among couples that seem to agree on everything, eventually they find something to disagree on," says Mellan. "Often, that's money."
The issue of who controls the bank accounts is often a source of discord, but Mellan and other financial experts emphasize that couples can pull through with conversation, cool heads and some compromise. An arrangement that works for both of you will mean greater harmony in the long run--not to mention more cash if you stick to it.
Marriage shouldn't be a money-loser, but, as George in Hoboken told his wife, a joint account can actually make budgeting more difficult.
"The problem with regular joint accounts is that it is so easy for people to lose [track of] their money," says Michael McAuliffe, who runs Family Credit Management Services, a faith-based, not-for-profit debt counseling firm in Chicago. "With two paychecks coming in, no one really gives any thought to small expenses like having lunch out. But these are the expenses that keep us from meeting our financial goals."
McAuliffe admits that while he was advising other couples on righting their finances, he and his wife were overspending. He likes to eat out, and she loves shoes. Their negotiated solution was to deposit both their paychecks in one account to cover all fixed expenses--mortgage, car insurance, utility bills--with each getting an equal allowance out of that account monthly that they could spend as they wish. No more. No less.
It's not the most romantic arrangement--when McAuliffe asks his wife if she wants to go to dinner, she asks, "Who's paying?" But they're paying much closer attention to how much is coming out of their own pin money.
If not addressed, money tiffs can escalate from tense silence to a slow boil to a mean fighting match. A couple may resent having to ask one another's permission to buy a coat or go out to eat with friends. One spouse may seethe every time the other comes home with a new gadget. It might sound corny, but like other relationship issues, finance experts say honesty and communication are the keys to monetary harmony.
It's harder than it sounds, particularly if the problem has been building for years. If you can't work it out by sitting down together when you're both feeling calm--some couples use a time limit to keep emotions in check--it can help to shell out for the expertise of a financial adviser. Often that person's role is as much about listening and problem solving as it is about number crunching.
Bethany and George aren't using a planner, but they have taken a first step toward financial unity. He recently told Bethany he wants to walk her through their finances. She's feeling more hopeful about the situation. "He brought it up," she says. "I'm usually the one who says I need to know where things are."