Welcome back to our series about the cost-of-living crisis that is affecting SO MANY of us right now. Seven out of 10 New Zealanders regularly worry about money, and odds are that you’re one of them.
We’ll be looking at such topics as how the cost-of-living crisis is impacting our physical and mental health, why many of us would rather talk about our sex lives than about our finances, and the trend of ‘loud budgeting’.
If there’s something you’d like covered, or you’re keen to be interviewed, please email us at hello@capsulenz.com!
This week we’re looking at how couples handle their finances. Should you have a joint account, personal account(s), or both? Does the current cost-of-living crunch mean more transparency is required? And is any of this a feminist issue?
Auckland nurse practitioner Kim*, 31, and husband Bret, 33, earn almost the same income and keep their finances separate. As in, they don’t have a joint bank account – only separate accounts. “We just agreed that our finances can stay separate as long as each of us pays their fair share of the bills etcetera,” Kim says. She handles the mortgage payment, Bret pays for most of the other bills and expenses, and it works out about half and half. “Well, I think it does,” Kim says. “We don’t write it all down.”
Why not have a joint account in order to easily and fairly split joint expenses?
“I guess we have different money profiles,” Kim says. “I’m the saver, he’s a spender. And I don’t want him spending money I earned on unnecessary things. We actually go to the supermarket separately because I get frustrated at how much he spends.” From their own groceries, each makes dinner three times a week, and Friday night is beans on toast, or cheap takeaways. But no, they don’t need permission to eat the other’s one peanut butter or Marmite.
However, with the cost-of-living crisis, Kim is thinking about asking Bret if they can combine their finances and plug every single expense into an Excel spreadsheet. “Like, every single new shirt. Every single coffee. That way I won’t be as stressed about our finances. We really need to save some money as a buffer, and it’s not that fair that I’m the only one saving any [money].” She doesn’t even know if Bret has credit-card debt. “We generally avoid talking about money, because I can sound critical and he can get a bit defensive. But yeah, I know I should stop putting off having this conversation with him.”
The Myth Of Women As ‘Spenders’
Couples who keep their finances separate, like Kim and Bret, generally keep that information to themselves, particularly if they’re worried about being judged by others. Some people aren’t entirely sure what their partner spends their money on.
Anecdotally, most New Zealand couples have a joint account or accounts, and separate personal accounts. For some, the current cost-of-living crisis means the structure of these financial arrangements are changing. For others, things are staying much the same. And in some cases, there’s a bit of frustration, particularly when it comes to the gender myth of women being spenders.
Cassie*, a married Wellington public servant with primary-school-aged kids, says “all our money goes directly into a shared account, which pays for the necessities and family purchases. From that, a small amount of weekly ‘pocket money’ gets transferred to each of our personal accounts for spending on clothes, lunches, personal electronics, gifts, etc.”
“My husband is a natural spender and I’m a natural saver, so I’m in charge of the household purchasing which keeps the spending sensible. It works well for us. I’d be really pissed off if anyone accused me of spending all our money, just because I’m the one that pays the bills, buys the groceries, and keeps the kids clothed! Buying that stuff is a time-consuming, miserable chore!”
Betty* works from home in Dunedin, and her husband travels out of town for shift work for weeks at a time. “Everything is joint. We have our own debit cards but they’re connected to that same spending account. We transfer money into the spending account as we need it. We get by and can afford most things so we are privileged. We do have a budget.”
“When my husband comes home [from a work trip], he goes over the budget to see how we’re going. I hate how he jokes with the kids about how I spend all the money. Yes, on things like groceries, school sports, and clothing – god forbid they need a jacket in winter! If we can’t afford to go somewhere [on holiday], he says it’s because I spend all the money. Give me strength!”
“My husband once said he’d like to take the kids to Disneyland one day and my youngest has NEVER forgotten it and has said numerous times that we can’t go ‘because mum spends all the money’. It turns out my husband had been saying it as a joke – repeatedly when I wasn’t around – and it’s stuck in the kids’ psyche. He’s realised it was a mistake and corrects them if they make a quip but still! I don’t like being judged by my six-year-old.”
Has the cost-of-living crunch affected their financial arrangements? “We’ve never been great with money but the living-cost crisis has made us change our system of managing money to ensure that we always have money set aside for all the bills and mortgage. We ‘spread out costs’ by working out what we need to buy for the home and family, and sometimes hold off on purchases until the next pay day.”
What Counts As Fun Money?
Kirsty*, an Auckland-based health-service manager in her 40s, says all of her and her husband’s money goes to a joint account. From there, automatic payments go out for regular bills. “We then have about eight different shared accounts: rent, groceries, emergency savings, etc, and we each have one Fun Money Account of $50 a week.”
“I was using my Fun Money Account mainly for clothes, make-up and haircuts, but I decided that’s unfair, as society expects women to have all those things to be respected at work. I’m in a leadership role, so it feels like a lot more pressure [looks-wise], compared to my hubby who shaves his head and wears a company polo shirt. Therefore, those purchases [clothes, make-up and haircuts] are not for fun! Now they come out of our main account and I spend my fun money on things that actually bring me joy, not just uphold societal expectations.” As for the cost of living, they’re nervous about having to re-finance their mortgage shortly, given current interest rates.
The Joint Account Question
Given societal changes over the decades, which include women’s increasing financial autonomy, it’s perhaps unsurprising that older couples are more likely than younger couples to put all their money in one pot. A 2023 survey of U.S. adults who are married, in a civil partnership or living together shows that 18% of Boomers (born between 1946 to 1964), 19% of Gen Xers (born from 1965 to 1980), 31% of millennials (born between 1981 and 1997) and 43% of Gen Zers (born between 1997 and 2012) prefer to keep all of their accounts separate. That’s a LOT of couples without joint accounts. (Of course, things might change if children come along.)
There’s the common conception that couples need a joint account (on top of personal accounts). But do they? Financial journalist Ana Staples has written a story for financial-news company CNBC called ‘Gen Z And Millennial Couples Are More Likely To Keep Their Finances Separate – Here’s How To Stay Financially Independent While Remaining Together’. “You and your partner can manage money as a team without completely co-mingling your finances,” she writes. She suggests you create a budget for shared expenses, be clear about how you’re splitting those, and plan how you’ll save for shared goals.
At the other extreme, Ana writes that having only joint accounts “isn’t the wisest approach” in a story for consumer financial-services company Bankrate, “While joint accounts are convenient and allow for financial transparency, they can also cause issues both in your relationship and your financial life.” Potential problems include lack of autonomy, shared responsibility in case of a partner’s financial missteps, and issues that can arise if the relationship ends.
However, she says a joint account “may be a useful tool for managing money in a relationship, if you know how to use it right”. She suggests you decide how you’ll contribute to a joint account so you have some transparency about shared finances, but also keep a separate account to retain some autonomy.
Basically, it’s whatever works best for you as a couple. Is that separate accounts and financial autonomy, with you each paying some bills? Or, as the cost-of-living crunch continues, is it worth having an open conversation about making your spending more transparent?
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