How To Budget When You Make More Than Your Partner

Courtesy of Plume.
Household dynamics have changed considerably since our mothers were starting their careers and relationships. According to the Pew Research Center, in 2011, 23% of working moms outearned their husbands, compared to just 4% in 1960. While many of us strive to have an equal partnership and find a spouse who supports and encourages us, issues of money can still be a tricky topic. You might be married to the world's most progressive, emotionally attuned person — but the moment you start bringing home a bigger paycheck, the dynamic changes.

Farnoosh Torabi, a journalist and financial expert, recognized this issue; she's the chief breadwinner in her family. And, she found it was a problem no one was talking about. So, she set out to write a manual of sorts — When She Makes More — to provide practical advice for navigating these new, often rough waters.

Chatting with Torabi by phone, she explained the personal inspiration behind the book:

It really touched a personal note. I forever have been in this personal-finance space, giving people advice. I've always felt empowered financially.... However, this particular aspect of my financial life, being the breadwinner in my relationship...I was emotionally torn. My rational brain was telling me, you should be really proud of yourself. There isn't anything wrong with this. There's nothing to be embarrassed about.

But, on the other hand, I felt as though there was no community around this — that people didn’t want to talk about it, even my own mother. It felt as though I was committing a sin: marrying a man who made less than me. [I asked myself,] how is this going to work out? When do you want to have children? How will you be able to manage bringing home the bigger paycheck and being an attentive mother?
Torabi realized if she was concerned about this problem, other women must be, too. She thinks heterosexual men are groomed to believe they'll be the primary breadwinners, and when that changes, it can hurt relationships. Research shows that in 2011, 28% of Americans said they still believed it was "generally better for a marriage if the husband earns more money than his wife." While some people tried to argue that it's not an issue in 2015, Torabi knew it was.

The advice offered in She Makes More doesn't just apply to married couples. As more and more young women are earning higher degrees, striving to close the gender wage gap (which is just 93 cents to the dollar for women between the ages of 18 and 32), and rating their careers as a higher priority than men do (66% to 59%), heterosexual women are more likely to meet and marry men who make less. Serious conversations about finance should start before marriage. Torabi suggests using her book as an ice-breaker — sitting down in a casual setting and having calm and honest conversations about finance.

Below, an excerpt from her book that outlines her suggestion for how to balance shared expenses. Torabi doesn't suggest going the typical route of one shared account, but instead suggests having three accounts — yours, mine, and ours. While that might not work for your relationship, it's important to consider different ways of sharing incomes as well as encouraging open and honest discussions about money. 
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The Three Buckets 

Yours. After giving a corporate presentation one day on how to save and manage your money as a young adult, a married guy came up to me and said he was having a tough time agreeing on finances with his wife, who made more and “controlled all the decisions.” She didn’t let him spend any of his own money but bought herself stuff all the time. Fair? Turned out he had no independent savings account of his own. There was a “her” money bucket and a “their” money bucket but no “his” money bucket. I recommended that he establish his own financial spending account and that he consider using his money to cover longer-term savings goals for the family, such as paying for a vacation or the down payment on their next home. 

No matter how much money the man makes, he needs his own financial autonomy. He also needs his own “slush fund” for personal purchases and emergencies that he should pay for by himself. Besides, how else will he be able to discreetly buy you gifts? Plan for him to carve out 10 to 15 percent of his paycheck every month into his own personal account. For the gentleman who came up to me that day, I think the stickier issue for him was his marriage to a controlling wife. I sensed he felt like a failure in terms of financial “contributions” since she seemed to pay all the bills and wield all the power. And he wasn’t convinced he could hash it out with his wife. As relationship coach Alison Armstrong cautions, if either person assumes money equals power or a leg up in the relationship, you’re in trouble. He was nonetheless encouraged by my advice and looked forward to taking my ideas home. 
Mine. It is chiefly important for female breadwinners to maintain an account that is strictly hers for personal savings and/or spending (and takes into consideration the fact that she’s likely to live longer and pay more for items in general due to gender price discrimination). Allocating up to 20 percent of her paycheck automatically each month into this account reserves her the freedom to enjoy her hard-earned money. It can also help minimize money fights; if you want to make a purchase, you can use this account without having to ask or get permission. Practically speaking, this money can also provide a financial safety net in case of an emergency or hostile separation. Since we know that when she makes more there is a greater chance for divorce, this money will be the key to her financial security. 

Ours. This can be a shared account that pays for a joint goal, such as satisfying day-to-day family expenses or affording a big expense down the road, such as retirement. It can also include one joint credit card (no need for any more, really) that covers the family’s needs and wants and is paid off in full, from either the joint account or just her account, since she is the main financial provider. Make sure that you decide on a “price threshold” — the amount above which any purchases that you or he wants to make are discussed beforehand. I suggest $100 or $200 as the minimum threshold for conversation. So if you want to buy a $200 printer for the household, using the joint checking account — and you’re in Best Buy considering the purchase — have a quick phone call or text chat about it. Maybe you decide to hold off until the two of you can do an online search after dinner or check the Consumer Reports rating.      

Excerpted from When She Makes More (April 2015) by Farnoosh Torabi, with permission from Plume. © 2015
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