Handling money wisely can be hard enough when there is only one person involved. Frugality, though very rewarding, takes work. But, as a single person your own needs and desires are the only concern. This becomes much more complicated when another person with their own viewpoints and needs comes into the mix. It is complicated even if the two of you are as alike as can be. So we can just imagine has difficult it becomes when the two of you have radically different ideas about spending and saving.
Fights about money are very high on the list of things that cause trouble in relationships and marriages. Money fights can even lead to divorce. And even if there is no fighting, having a real spendthrift as a partner can lower your quality of life, or even leave you in a very difficult financial predicament if they should die before you. So getting this right is serious business.
If you are just starting out in a relationship with someone that you suspect has a wildly different idea about spending you have plenty of options, and no real obligations. Just keep the money separate until you are sure that any problems have been worked out-which may be forever. And don’t let your self be forced to spend more than you are comfortable with for any joint activities.
If you are living with your spendy partner already but are not married, now is the time to separate the money. They might get mad, but this is better than you getting broke. One thing that works is the three-account plan. One account for you, one for your sweetie, and one for the house. You are then able to control your money while still contributing to the household. There are differing views on figuring the household contribution. Some say it should be equal, but the Frugal Goddess prefers to have each contribute a share commensurate with their income.
To figure this out, add both incomes together. Then divide the by smaller of the two incomes by the combined total. This will be the percentage of household expenses paid by the person with the smaller income.
For example: If she makes $2500 a month, and he makes $1500 a month, the total income is $4000. So, divide $1500 by $4000. The result is .375. Now let us imagine that the total household expenses are $2000. He would pay $750 a month, and she would pay $1350. Each would retain control of the rest of their own money.
The household account should cover housing, food, home insurance, and anything else that is shared. Personal phone bills, and individual car expenses if each has their own car would not be included. Each couple has to decide for themselves what should be shared.
If you are thinking of marrying a spendy person when you are frugal, I would recommend a pre-nup that details the extent of your financial involvement before the fact, and, if you are in a community property state will serve as a protection on your future earnings. It may not be romantic, but neither is being poor when you didn’t have to be and it wasn’t your fault.
If you are already married you are in a bit of a predicament. Have you had a heart to heart with your spouse? If so, and no agreement was reached, or agreements have been broken, you may have to take stronger action. It may be good to consult a lawyer and find out if you can protect yourself and remain married. If this is your situation I wish you the best of luck. For the rest of us—romance is much more satisfying when our financial boundaries are not being violated. So take action now to make sure that being in love is not the same as being subject to the whims of another.