Feeling and acting like financial equals can be a big challenge when a couple's incomes differ dramatically. But there are better ways to acknowledge the hard work a lower-earning or stay-at-home spouse does for the family than by doling out a "wife bonus."
In her new book, Primates of Park Avenue, writer Wednesday Martin reveals the practice by which finance executives, bankers, and other high-earning New York husbands reward their spouses with the aforementioned bonuses, "distributed on the basis of not only how well her husband’s fund had done but her own performance—how well she managed the home budget, whether the kids got into a 'good' school," according to an excerpt that ran in the New York Times.
Martin uses the "wife bonus" to highlight the large power imbalance within these marriages, where the money is viewed as "a ticket to a modicum of financial independence" for Upper East Side society wives. And while it's hard to feel too sorry for a woman who carries a $15,000 Birkin bag, the reality is that even for average folks, anytime a couple has radically different incomes, it takes a lot of work to make both spouses feel like true financial partners.
But the benefits of doing so are clear. Couples on more equal financial footing report that they are happier—83% said they were very or extremely happy, vs. 77% for couples where the woman earned less or nothing at all—according to our 2014 Love and Money poll. These couples also reported the hottest sex life, with 51% saying things in the bedroom were "very good" or "hot" vs. 43% of spouses overall.
The good news is that you and your partner don't need to radically change your income or roles to feel the way more egalitarian couples do. These four habits can keep an income disparity from taking a toll on your relationship.
Partners in more egalitarian marriages report higher levels of satisfaction because neither one shoulders the financial burden alone; they're working together to secure their family's future.
Make financial togetherness easier by sharing information, says Manisha Thakor, co-author of Get Financially Naked: How to Talk Money With Your Honey. For example, have both names copied on the trade confirmations when making investing decisions, or set up online banking accounts so that each partner gets the same notifications when a bill payment is due or a certain amount has been deducted from the account.
Most important, both spouses need to have full access to all financial documents, accounts, and passwords. Even if you each have credit cards or separate accounts in your own names, either should be able to view past transactions. It's critical that both partners have an equal understanding of the family's assets, so that lower earners don't feel kept in the dark about what is, after all, their money too.
Make Decisions Together
Earning power should never equal authority within the relationship. Just because one spouse brings home more bacon doesn't mean that he (or she) gets to be the louder voice in financial decision-making. But in many households, that's not the case. More than a quarter of lower-earning wives feel like they're not a financial decision maker in their own family vs. only 4% of lower-earning husbands, our survey found. And fewer than half of husbands and wives in households where the men earned more said they shared financial decision making with their partner.
For greater harmony, the high earner needs to let go of that possessiveness over the paycheck, even if it means pulling back on the lifestyle they may feel they can afford (or deserve). The important thing is making decisions together and agreeing to compromise when opinions differ. When thinking about a major purchase, call your spouse and say, "Hey, can we afford this? Is it worth it?" Avoid venturing out solo on big decisions like car or home buying.
That's not to say that a couple needs to do every single financial chore together. It's fine for one partner to take the lead on bill-paying or making investment choices; one person is usually more interested or able to handle a particular responsibility anyway. The important thing is that you both agree on who is best suited to what job, and take care to maintain the distinction between a task and a decision.
Allow for Some Money Autonomy
Everyone wants a little bit of financial freedom, and if you're a lower earning or non-earning spouse, that sense of independence is hard to come by. And spending on yourself could irk a spouse who still thinks of household income as "my" money.
To avoid having to justify every desire or feel guilty when you do spend on a personal indulgence, create "yours, mine, and ours" accounts. Together, agree on a monthly amount you'll each put into a separate account, to be used at your discretion. You can fund the accounts proportionally, say, with each putting 80% of their paycheck in the joint account and the rest into their own kitties.
One-income households can divvy up money along similar lines, by allocating a percentage of the paycheck to the joint account, to be used for mutually agreed-upon goals, and an equal portion into the two separate accounts. Then, set a dollar spending amount above which you agree to consult each other before purchasing. (The figure most couples set store by: $154.)
...But Be Careful What You Call It
The "wife bonus" and its predecessor—the allowance—may seem like the three-bucket system by another name. Yes, both involve setting aside money for a spouse who earns less or nothing, but the message behind them differs radically.
Creating equal "fun funds" or "joy funds" or "personal expense accounts" that you've discussed highlights a partnership in which no spouse has greater control or authority over the finances.
Wife bonuses and allowances are just the opposite. In this arrangement, there is clearly a subordinate. "It's all about the intent and spirit in which the funds are disbursed that makes this so different," says Thakor, director of wealth strategies for women at Buckingham and the BAM Alliance. "This is all about power. It is demeaning, and one person is being controlled and made to feel small and judged. In business, bonuses and bosses are fine, but healthy loving relationships don't operate like that."