Ask HN: How do you and your spouse handle big income differences?
We had a hard time dealing with this at first, I was jealous and a little bitter, and she was worried that I was taking advantage of the situation. In the end, we decided that the buyout money would go to retirement and not be touched. As for out salary, we decided that we would both spend as if we both made my salary, and anything above that, she would put in a rainy day fund for home improvements or traveling etc. This arrangement kind of worked until it came time to use that rainy day funds and she started feeling that we were spending her money.
I've heard of this situation with Lawyers/Doctors where one spouse supported the other while they went to school, but once they started to practice, the income spread was huge. How have FANG engineers or anyone else with a big income disparity learned to deal with the situation?
209 comments
[ 3.5 ms ] story [ 240 ms ] threadShe's more than capable of taking care of herself, plus we'll soon take on a crippling mortgage anyway. Ymmv.
Money is stupid, I try to spend as little time as needed thinking about it, life is too short.
If I get a big raise or promotion my wife is excited not jealous and I have never felt like she was using “my” money.
This isn't a personal question for you, but more something to consider even for myself. I love simplicity and I love trust. But through the years I've experienced relationships that transform from pure love and admiration to pure confusion and being on completely different pages. This may be because I'm young, and maybe relationships become more straightforward later in life. But something tells me people never become less complicated, maybe they just become more complacent.
That all being said, I recognize that sometimes overthinking or planning for the worst can be a form of self-sabotage. By you trusting your partner with the things most important to you, including money, you are creating a stronger bond by laying it all out on the table and working as a single unit towards your life goals.
That's not to say that every re-evaluation should lead to a breakup. But I think not acknowledging that drift and fighting over the symptoms probably leads to worse outcomes than openly addressing the bigger issue.
I know everybody is different but the key for my relationship with my wife has been open communication. There's a clear pattern for us: when we don't talk about a problem, we end up getting upset with each other, but when we do talk about the problem, we come to an understanding and everything is fine.
Another key is that we love each other and if we disagree on something, we're both willing to find compromise.
There are a few big issues where a compromise might not be viable, like having kids or where to live (we're from two very distant countries), but we made sure we agreed on those pretty early on.
My point here is that I don't think age is the solution. Relationships are work. It can't all just be fun and games, you need to talk each other about stuff, build up trust that doing so is safe and be willing to compromise for each other. This is work and without it, the relationship might very well fall apart.
Right now she is sick of her job, and FINALLY, I have got a FAANG free idea that I feel confident about launching as a business. Oh christ have they crowded out so many things. As soon as this idea is break-even, with upward trajectory, she's quitting and becoming the support person. Hard agree from me.
Everybody we have ever known over those 42 years who partitioned the pot: divorce. It's just money. Why would you do that? Why is money more important than your spouse?
(I'm replying in complete agreement, if it's not clear.)
I don't even want to elevate our lengthy relationship as something superior. Hardly anyone, including us, started out in their teens understanding what makes a good relationship. We probably stumbled into the single pot model because each of us had so little, then.
We do have a significant income disparity (on our taxes I believe it was about 3:1 for me this year), and navigate it mostly by just having an asymmetric set of financial responsibilities. We’re both responsible for our own individual expenses (e.g. cell phone bill, car insurance, credit card debt). She covers the mortgage for our modest house, I cover pretty much everything else (house and cabin insurance, property tax, car insurance for our shared POS construction-hauler van, natural gas, electricity, water/sewer, charitable donations, etc). I know what the mortgage costs, she probably doesn’t know exactly what most of the stuff I pay for costs but I’d be open with her if she was curious.
After all of the expenses are covered, we’re pretty much free to do what we want with what’s left over without consulting with the other person. We’re both also, I guess, sufficiently responsible that it’s a rare situation to run low. We’ve had a few unexpected expenses over the years that left the joint account in a bit of an ugly place but refilled it over the next few months and lived a little lean to make sure the emergency fund was there.
For COVID, her monthly income was reduced to almost zero. We’re in Canada, so she had CERB ($2k monthly). I topped up the joint account and told her she was welcome to take what she needed. She did transfer maybe $1k a few times to cover a few things, but mostly was self sufficient.
I dunno! Maybe it’s not a situation for everyone but it’s been super smooth. When we first started dating and moved in together, I was a grad student with a paltry scholarship, but our expenses were quite low as well. She got by and covered a few more things than I did, and now it’s going the opposite way and there’s no resentment or anything as far as I can tell. We’re both pretty good about sharing when we’re feeling something’s out of balance, so I suspect I’d know about it if she didn’t feel like I was pulling my weight.
Especially with my dad doing shift work where he was working different hours every week
Technically both accounts are joint accounts so it’s definitely not about hiding purchases or income. It’s just a logical partition around our daily spending habits.
We have been married for 16 years and together for 23. We don’t ever fight about money.
I don't care what she spends hers on, and she no longer comments when I buy a new tool. Win/win/win
In my relationship, we avoid force or ways to control the other person. It’s a voluntary relationship. Love is the glue, not a shared bank account or financial dependence.
The ratio of the split floats around for us, usually depending on income and desire to pay. The important part is that my money is mine and in my name. If I want to spend it on caviar or video games, good for me. If he wants to spend his on a new car, cool. If he wants money for that car he knows he can ask and probably get it, but then I get an opinion too.
we didn't create a joint account because we never even bothered to think about it. it would have just been an extra hassle without any practical benefit. things were paid by whoever was doing the payment. if one account was running low but a payment from that account needed to be made, money was moved.
more of a concern was that i was used to meticulously tracking my expenses, while my wife hated the idea. so we didn't do it as a family, and only did rough budget calculations to see if we spent more than we earned as a compromise.
Staggering that I have newlywed friends who still haven't - even after 4 years - decided on kids or not, finances, everything big. AND NOW WE WAIT...
I guess my point is perhaps it is less the separate bank accounts and more the incompatible mindsets that lead to the divorce.
Honestly the whole "my money, your money" thing, with separate accounts, and you pay for this, and I pay for that, and oh i can't buy groceries with your money and vice versa, it just seems so... unnecessarily exhausting. When we got married, that's basically entering into an agreement that says we're one entity. So we just treat everything we own as owning it together. If we were ever to divorce, the State of California would treat everything we own as owning it together, so why complicate things with three bank accounts and negotiating and borrowing and who pays for what?
And before you say, oh that's easy if you make equal salaries, ours is a single income household, and it still works fine.
When she was working, I transferred money to “her” account when needed to pay “her” bills. We also have a separate account for “household” spending like groceries. I deposited money into that account when I got paid. But she manages it.
If she wants me to pick up groceries out of the account. She would give me a list and either she or I would transfer the money to “my” account.
If divorce has to come my way, reality is we always lived with the assumption that everything is split by 50%.
We talk to each other when spending money on lavish things,which is actually a good sanity check
When we go to diner with friends, who have a discussion who is paying, I always feel glad we don't have that.
This probably works nicely if you find the right person - someone who has both spending habits that are reasonably similar to yours and when the relationship itself is stable.
But what about situations where:
Personally I think that joint finances are rather risky in all but the more stable and long term relationships.And about the first one.. I don't see how people could decide to have a life together with that sort of difference. IMO seems pretty hard to be aligned on world views when someone is more frugal and the others love fancy stuff.
Depends on the country and local laws, I'd wager. Regardless, it's probably a good idea especially before a marriage has happened, though lots of people rush into getting married nowadays.
> I don't see how people could decide to have a life together with that sort of difference.
The fact of the matter is that some things can reveal themselves later in the relationship and having joined finances too quickly is probably a mistake. The hard part is that you can't really gauge when you have the other person figured out, e.g. the whole "rose tinted glasses" period that may drag on long into the relationship.
We have one main account we both use, and we make sure it's always got enough money in it that we don't have to worry about accidentally bouncing a check. We have set limits on how much either of us can spend without talking to the other person. And we don't really fight over money.
1. You get divorced and she keeps her money
2. As a couple, you never spend "her" money because it's "her" money. You die having spent none of the money
3. At some point in the future, you start spending "her" money
(3) doesn't make sense given she's uncomfortable with it now. (2) also doesn't make much sense. So to me it seems like either she's acting irrationally or expects that (1) is a strong possibility.
OP, it sounds like this would be a huge shift in thinking for both you and your wife, but I hope you can find your way there (maybe with the help of a marriage counselor).
These people should see a councelor and talk about why they think it's important to keep it separate in the first place.
That might be the case, but why couldn't it instead be that she thinks it's unlikely, but still possible (and therefore she needs to be prepared for it)? Like even if she thought there's a 5-10% chance, it doesn't seem irrational to prepare for it? (Note I'm not saying it's a good idea to do this, just saying it seems rational.)
So for now, she helps with tidying up the house, cooking some meals when her studies allow, and other random things as her way of contributing. I don’t ask this of her; she just does it because she’s cool af.
The biggest lesson I’ve learned is to always be transparent about money. Never hide things. And be mutually respectful, while creating a plan that is balanced and works for both levels of income.
Life is too short. Don’t waste it arguing about money.
Fundamentally our money is shared but the accounting keeps incentives fully intact.
Sounds similar to the OP in practice
What if one day i/her want to buy something very expensive, like a 100k or whatever? I don't know i'm not into expensive stuff and neither is she but we would decide together.
of course these all work in the reverse too.
But I do make $200k/y
So what we do is that her money is hers and mine is mine
If she wants to spend her money on joint things like our house than that’s fine but I am clear with her whenever I won’t join those projects because I can’t afford it
It’s been working just fine
I know from friends though that it can be a issue if one of the partners has a income below a certain threshold
It's both your money. Jealous and bitter? Her money? You both just need to grow up and realize you're married and on the same team.
It might be different if you were both struggling to make ends meet, but you're wealthy. You made it. Be happy about that.
Use some of the money to go to therapy, both individual and couples. If you go soon enough you might save your marriage. Either way, it's probably the best investment in yourselves that's available.
*Depends where you are but certainly true in California
Fun fact: here in Australia, married couples file tax returns individually. There's not really a notion of a "joint tax return" here.
The way we think about this is that _any_ increase in either of our paychecks is a benefit for both of us. I'd love if my fiance made 10x what I did because that all comes back to benefit me too. I'm pretty easy to please though. My fiance is really into some expensive beauty products for example and we buy those out of the shared pool but I don't really care for much except having a good PC. Even if I suddenly got serious $$$ I think I'd pretty much continue doing the same stuff. I wouldn't even buy a new car.
If we make an expenditure out of the team accounts, it gets authorized by both of us, either explicitly (for big stuff) or through an enduring understanding (like groceries).
Non-team money lives in individual accounts, for the individual to do whatever they'd like. If one partner wants to go big on something, it is their prerogative. If one partner wants to go big on something that ultimately becomes a team item or improvement to a team asset, they can do that, too.
Works for us. We check in about it informally a couple of times a year, and definitely with an annual review.
As the lower-earner, I've definitely felt as though I'm not necessarily pulling my weight, but my partner seems happy with the arrangement. There are always asymmetries in relationships; a key may be to keep them in some sort of dynamic balance, whereby in aggregate, something good happens for everyone concerned.
Worked so far the past four years, although I'm sure we could both be a bit more frugal with our individual spending. But for now it doesn't matter too much, bills are getting paid, money is going into retirement and investments (not as much as I'd like, but still a decent amount), we can afford a vacation this year (a fairly simple one, but one nonetheless), etc.
It’s great to be able to blow money on something your spouse would consider stupid or frivolous without needing to come to a consensus on it. I once asked a friend who’s a big foodie (and whose spouse couldn’t care less about pretentious molecular gastronomy restaurants) to try a new fancy restaurant with me, and they said “I’d love to, but isn’t that place like $200 a plate? I need to run that by my spouse first.” My friend ended up joining me, but I could tell their spouse was extremely resentful about it. I just can’t imagine living like that. If I want to blow the entirety of my individual account on something my spouse finds silly, I am free to do so without any consequence.
Being able to see what the other person is spending money on though is super helpful. I know what monthly expenses my wife has, and she knows what I have, allowing us to you know, have a single Netflix account instead of two separate accounts.
I also don't have a problem saving up money to buy nice things for us that comes out of "my" account, because I mean, technically it's all "our" money, even if they're in separate accounts. The separate account thing just makes it mentally easier for me to justify to myself being able to buy a new guitar and for her to justify to herself about buying a new bike.
At the end of the day, we're on the same page about finances and neither of us (to my knowledge) resents the other, and that's just about as good as it gets, I think.
We've operationalized this as: 1. Determine how much we want/need to spend on joint things (groceries, mortgage, vacation fund, etc)., call this B for budget. 2. Look at how much we're each making, M for me and H for her. 3. Find the fraction of our money X (which is roughly speaking equivalent to fraction of hours worked in our case) Such that XM + XH = B 4. We each contribute our respective portion to a joint account, and pay for all joint things out of the joint account. 5. We each keep the rest of our money in our own accounts, to do with whatever we like.
You might need to add a couple of terms to account for different work schedules.
Knowing that we're both contributing equal _effort_ to everything makes the inequalities (I contribute more to shared stuff, but also have a bigger personal discretionary budget) not seem like such an issue.
Since I am making significantly more than my wife these days I always pay for meals out, movies, etc. It's worked for us for about 12 years now.
We originally had a weekly allowance - booze money - when we weren’t making much for meals out/seeing friends but in the last couple years just use the joint credit card for that stuff since relative to our other expenditures it’s nothing.
Now we reinvest all my RSUs in trackers, and have a monthly spending goal that’s 20% less than our combined salaries that lets us save money for vacations and house stuff without hitting investments. Bonuses and stuff like we treat as “fuck it” money.
My hobbies are way more expensive than hers, so we do have discussions about stuff quite often, but it’s never been a problem - usually I just have to wait until a big enough bonus comes along if it’s something dumb like my project car.
Maybe it helps that when we started I was making 4x less than her and am now making 4x more.
I guess this is tricky situation and marriage counseling might help here. They say that finances are the main reason for divorce but it is the least important one.
I have lived this and my best advice is that you should be equal partners. From personal experience, each partner contributes different strengths and abilities. Money is easy to divide and represents life energy but there is more to a partnership.
Equal partners does not mean exactly the same effort. Do you split the household chores exactly 50%? Probably not. I look at this in the same light.
Also, circumstances change. Right now your wife is making more money. If she suddenly got laid off, would you support her with "your" money? (Yes.) If one of you got an inheritance, would that be carved off and only spendable by the inheritor? (No.) If you got a sizable gift from your parents, would it be yours singular or yours plural (plural). If she had a kiddo and wanted to stay home, would you support her with "your" money? (Yes.)
As far as nuts and bolts, talk about goals, talk about frustrations, talk about the challenges. There are financial counselors out there: https://www.nytimes.com/2022/08/13/business/financial-therap... they might be helpful. Or a straight up marriage counselor.
Compromise. Maybe there are things that your wife wants to buy that she feels like she should be able to. That should be a compromise and discussion because she wants to be in partnership with you.
Things to avoid:
That being said, I do appreciate your point about the chores. In other families often only one person is employed. The other person is also doing nearly 100% of the chores, or child care, parental care, or other things. It does deviate from the original question a bit, but I think it's important that there's lots of other labor in a family. It's critical to notice IMO because those will almost never directly add to your money number, yet you wouldn't ever skimp on it.
Legally speaking, an inheritance is not marital property. If you put it in a joint bank account or use it to improve joint property it can become marital property however.
But there's legal situations and then there is real life. If a discussion about money ever gets the lawyers involved, then the marriage is either way more high powered than anyone I've ever known or is in a pretty bad state.
And for what it's worth, be grateful she is doing well. it is awesome and she deserves your admiration & appreciation for her achievements.
Honestly, it sounds like you two need to have a heart to heart on this and figure it out, because frankly, you’re behind the curve on this. And if it’s not going well you should seek counseling. It’s important for a couple to be on the same page regarding money.
Now, intellectually, I know this is stupid. I had to convince her to quit working post Covid. We don’t need the money. I like my job and I couldn’t just have her travel with me when I go out of town for business if she were still working. We definitely couldn’t embark on the digital nomad thing we are doing later this year.
She would go back to work tomorrow if we needed it.