It can be challenging enough learning how to your manage your money as an individual, and if you're combining finances with a partner, things only get trickier — especially if there's a sizable inequality in your incomes. According to a 2018 study published in Demography, cohabiting (but not-yet-married) couples who earned similar amounts were more likely to stay together long-term, while those with very different earnings were more likely to have their union or marriage dissolve.
One possible explanation for these findings, the researchers posited, is that earning equal amounts gives partners equal power, which facilitates cooperation over bargaining during disagreements — and cooperation is key to making a relationship work long-term. While that doesn't necessarily mean couples with large income gaps are doomed, there's no denying that income inequality can create more opportunity for money-related issues to arise.
"When there’s an income gap between you and your partner, you may come across problems like the higher earner making spending decisions on their own or end up paying all the bills," Caleb Backe, health and wellness expert at Maple Holistics, tells Bustle. "The breadwinner could end up feeling resentful and burdened, while the partner making less money can feel like they aren’t giving enough to the relationship."
Simply put, an imbalance in earnings in a relationship is no small issue, and it's not something you should avoid discussing until you're forced to (e.g. moving in together or getting married). But it's so important to talk to your partner about your individual financial situations in an honest, productive way.
Why It's Important To Be Open About Money In A Relationship
Even at a relationship's start, couples can sometimes feel the effects of having mismatched incomes. For example, one partner might always suggest lavish dates which the other can't really afford — but feels too embarrassed to decline — and, when it happens often enough, that sort of scenario can eventually create resentment on both sides. The only way to avoid that is to talk to your partner about your financial situations, expectations, and goals as soon as possible; even if you don't get into all the nitty gritty details right away, being upfront about the big stuff creates a strong foundation for future success as a couple.
"Make sure to disclose your incomes, your debts, your expectations about lifestyle and sharing money if a relationship is going to go the distance," relationship expert and author April Masini tells Bustle. "Relationship problems and money usually have less to do the amounts of money involved, and more to do with the honesty, disclosure and expectations between two people in a couple."
According to a recent report from personal finance website Bankrate, only 68 percent of people have told their spouse or live-in partner their salary — meaning almost a third of folks are keeping that number a secret. But if you want your relationship to last, that kind of secret can be dangerous, particularly if you know (or suspect) that there's a big disparity in how much you earn compared to your partner.
Of course, for the person who earns less in the relationship — or who has more debt/other expenses — divulging your financial details to your partner can be scary: you might worry they'll judge you, or worse, leave you, as a result. But if the relationship is (or has the potential to become) a truly healthy, equal partnership, your partner won't judge or shame you for your financial situation; instead, they'll offer their support and encouragement, and look for ways to start tackling your financial problems as a team.
"When it comes to finances, ego can quickly take over, especially with competitive people, but good relationships can’t be built on trying to beat your partner," Derek Peth, SVP of banking at student loan refinancing site Laurel Road, tells Bustle. "The best way to remove the challenge against each other is to make it a team challenge and support each other instead of comparing."
How To Tackle Financial Goals As A Team
Although it can be hard to admit, everyone has some sort of financial baggage — maybe it's credit card debt, student loan debt, or an inability to save — and those are things you simply can't hide from a partner if you want to be together for the long haul. Even if you aren't planning to combine finances just yet, knowing where you both stand financially is crucial, that way you can work as a team to set financial goals as a couple, as well as support each other in your individual financial goals, too.
"If you have different goals that are not being talked about, one person can be working toward one goal and the other partner can be working toward the other (say a short-term goal like a trip versus a long-term one like saving to buy a house)," Heidi McBain, a licensed marriage and family therapist, tells Bustle. "This can lead to arguments and discourse within your relationship."
While it's OK (and healthy!) to still have individual financial goals within a relationship, if you're a long-term couple, you'll need to talk about your shared financial goals, too. Whether you want to save up for a down payment on a house, pay off your student loans, or start making investments together, the only way to reach those goals is to talk to your partner and make a plan to get there together. Even short-term couples can set small money goals as a team, like saving for a short weekend trip to meet each other's family for the first time.
Another helpful tactic is to re-frame the way you view talking about money: instead of seeing it as a necessary "chore," think of it as something that brings you closer to your partner — and use your financial wins as excuses to celebrate together and empower each other. "Don’t just talk about finances; celebrate meeting your goals the same way you do anniversaries," Peth says.
What's The Best Way To Split Expenses When Your Incomes Are Mismatched?
When the time comes to start sharing expenses and financial responsibilities with your partner, it can be tricky to decide how to fairly split things up — especially if one of you earns a lot more or less than the other. If that's the case, Backe suggests, maintaining separate individual bank accounts while also opening a shared account might be the best option.
"If you’re combining finances for the first time, the best advice would be to keep your accounts separate but also have a shared account," Backe says. "The shared account can be for rent or household expenses — anything you both need and benefit from. It’s best not to share costs of assets, like furniture, houses, and cars. If for some reason things go wrong, you’ll be able to take what you purchased and it will keep things from getting messy."
Other options for divvying up shared expenses with mismatched incomes, Backe says, include: each of you paying the same percentage of your income towards joint expenses; calculating your combined total income and dividing expenses so each person has the same amount of personal spending money; or keeping your money totally separate and divvying up the responsibility for each individual bill or expense.
In some cases, couples can successfully share a bank account that's totally joint, like 29-year-old Lauren Hamilton, marriage and lifestyle blogger at Modwife.co, tells Bustle she does with her husband of four years. She says they each contribute 100 percent of their incomes to their joint account and share all their money, for personal things as well as bills.
"Putting our money into one account keeps finances neutral for us," Hamilton says. "We also do our best to have marriage meetings every few months to discuss goals and plans, including any changes in our budget and new financial goals. These meetings are a way for us to be strategic with our money and to voice our opinions on the best ways to use our money."
Ultimately, it's up to you and your partner to decide together what money management system works best for your relationship. Just remember that the most important thing isn't how you split your bills; it's how you communicate about your financial situation, and whether or not you both have the same picture for your financial future. If you're on the same page, openly and honestly communicate, and know how to compromise, you'll be well on your way to working through any money issues that come your way, regardless of how much either of you make.