Dividing Financial Responsibilities

So if you’ve spent some time thinking about it, in an organized fashion, you’ll probably realize that there are fundamentally only four different permutations of ways to divide financial responsibilities. You’ll also probably be intimately familiar with one of them.

One option: One partner takes control of the family’s finances, and the other partner is only too thrilled to hand over that control. The stereotype is that men control family finances, but I am familiar with many situations in which the woman takes control, with the man willingly giving it up. For one couple that I know, the husband actually asked for a spending allowance separate from the joint accounts, because he wanted to buy his wife a gift and surprise her and knew she’d know about any expenditure moments after it happened. The wife was, needless to say, happy to comply. Often in these cases the spouse who is in control works to educate the other partner about the family finances, but his/her efforts are met by a blank stare and a profound lack of interest.

There are some real advantages, though, to having one person in charge of all financial duties–as long as the second partner is amenable, and takes at least a minimally active interest. The person in charge of the financial duties has a clear view of the entire financial landscape, and thus knows where assets are at any given time, how much is available for purchases or investments, and how to move funds around when needed.

To make this work, the Sunlight Law must be operative at all times [see Part V in this set of entries]. Additionally, this person must make all financial transactions available to inspection at any time, and must also make available a list of where the accounts or located, passwords–and, crucially, the annual tax return.  To the OTHER partner in this process–avail yourself of this information. You must examine these documents and know where your money is located and where it’s going.  It sounds like it’s out of a Grisham novel, but if you don’t look out, it’s possible–even if unlikely–that you can wake up one day to find that the person in control has lost the wealth you had and rung up huge debts you are now responsible for.

(from Kozzi.com)

Speaking of responsible, do not sign off on your tax return without looking at it closely. You are responsible for what you sign, so you might as well know what it is. Look at those tax returns and make sure the gross amount seems accurate. “But I really didn’t know/understand” does not hold up in a court of law.

Option two: One partner gets assigned to take care of the finances, and does so reluctantly and often begrudgingly. This partner gets stuck in this role because the other partner refuses to go anywhere near the bills or checkbook–and partner A does realize that someone needs to balance a checkbook and pay some bills or things could get really hairy.

A third option: Both partners actually want financial control, but one spouse claims it through sheer force of will. This leaves the second partner feeling left out and powerless. It’s a set-up for some real resentment.

And then there’s the fourth and perhaps most ideal option. Even if it does sound a little Pollyana-ish, if you can make it work, it will change the dynamics of your marriage in more arenas than just the financial one. In this case, both partners share the duties, each taking responsibility for what they’re best at or what interests them, or what they’re willing to manage.

I personally like picking investments, so I’m the chief investment officer of my household. My daughter is good–relatively speaking–at dealing with bureaucracies, so when it comes time to file claims, fight with insurance companies, or use the Internet to find better agencies and other nasty business like that, she’s chief-of-nasty-business officer.

And this may be a no-brainer but I can’t help but say it–the organized partner should do the bills to avoid those late fees.

Key to all approaches: talk frequently, so you both know what is going on–and also so that you can appreciate, and express that appreciation, how much the other spouse does for your mini-corporation’s financial well-being.

Because, remember, money matters in couple relationships.