Friday, January 23, 2009

Coming Together

D and I got together when we were both in our 30's. We each owned property and had assets. It was and still can be a challenge figuring out what is "fair" and equitable from a respect point of view. We both have individual ideas for investing and asset allocation.

Some questions we came across included:
  • Do we split everything 50:50 even though we do not make the same salary?
  • Will we stay common law?
  • Is there any advantage of getting married if we are not planning to have children?
  • What are each other's financial goals?
  • How do we see ourselves living in 20 years?

We both agreed that things would have been much more straight forward had we met at a time when neither one of us had anything of value. Then it would mean we build it together. 50:50 split would be obvious and easy.

My previous post about my friends A & B was an example of how complicated things can be when there are egos and financial "hangups" involved.

I have read advice that recommended that in cases of non matching income, it would be fair to split expenses by percentage of take home pay. Thus if one person made 60% of the total income, they would be in charge of 60% of the expenses.

We tried this method at the start. To be honest, we may not have given it a real chance.

I admit I was hesitant about completely combining both incomes into what I call the "common pot". I was afraid of losing my identity and my assets. I didn't want to be in a situation where I would have to buy my house back from anyone should my relationship go sour.

I know of one woman who "bought out" 2 houses from 2 different men and found herself in her late 40's with minimal savings. D's own brother still talks about him having to buy his house twice after a nasty split up.

As my relationship with D progressed, I found that I wanted to share things 50:50. In the beginning, D was adamant in clarifying what he has brought into the relationship and that should things not work out, he would only take back what he put in. He wants things to be fair and did not wish to make it look like he is taking advantage.

D has gotten comments from his male friends that make fun of him (non malicious) as a "kept man". I did take offense to it even though I have been told that that is "guy humour" and he was told to not tell me about it.

D tells me that he gets razed about things because the guys are openly jealous of our lifestyle and that's why they make fun of him. He is witty enough to always provide a sharp retort but I don't get that. My girlfriends would not say such things.

As the years have gone by, as our relationship deepened, came an increased comfort zone and trust with each other's ability to manage money, allowing a true partnership has emerged.

So, do we have a prenup? Sort of. We have broad concepts on paper. Neither of us will end up with less should things not work out.

We also have wills in place. Being married has the added bonus of simplifying things from an estate perspective. And having both names on title for all properties ensures a seamless transfer. By doing this, we are taking care of each other now and later.


  1. I have not had to live through merging our financial assets. We met when we were young and our only asset was our earning potential.

    It's all in a common pot.

    If I were to start over in my current position, I would keep my assets separate and use a pre-nup/co-habitation agreement to protect my assets and the kidlets interest. Prenups are good.

  2. Middle Way,

    Thanks so much for sharing this. I too sometimes think that marriage is simpler (not easier, but simpler) if you marry young. I'm also in my 30s and have wondered how to handle the finances should I marry. Your post gave me good food for thought. Thank you!

  3. I came into my marriage with a large junk of money but my husband came into owning (out right) land about equal to that amount. Once married we opened a joint account and put both paychecks into that but I was hesitant to put his name and thus give him access to the large fund. Now we have each other's names on all the accounts and deeds.

  4. Hi Money Minder -- Your view interests me. If you don't mind, can you expand on it?

    Do you mean keeping your own savings and investments accounts in your name or keeping track of everything by percentage contributed -- even real estate?

    Do you feel our Canadian laws for child support are adequate?

    Hi Daphne!

    Thanks! It's one of those things that aren't taught or openly talked about.

    There are books out there (varying titles in the form of "100 questions to ask before you say I do") that do broach the subject but I feel it is still very much a hush hush subject because for some, it is very un-romantic!

    Hi badhuman -- I'm glad to hear it was a process for you as well. For me, it was a matter of trust and attaining a certain level of comfort with "exposing" myself.

  5. It's an interesting dilemma. Hubby and I moved in together about 6 months into our relationship. At the time we had a common pot for household expenses and everything else was separate. We had an agreement that if the relationship ended we would just walk away with what was ours.

    Since we got married (about 15 months ago) we have a new arrangement. Everything up to that point still belongs to the individual, but from the time of our marriage everything is considered 50/50 ownership.

    While we are living in the US, I'm the breadwinner and he's the home maker. This will probably change when we have kids, but for the time being I have a much larger earning potential. He often despairs that he's a kept man, but I'm sure he'll get over it one day. :)

  6. Hi livingmyrichlife!

    It was your comment on an earlier post about my friend A & B that prompted me to write about this.

    Your point about everything before marriage vs. everything after marriage being 50:50 makes me think. I'm going to work out what that would mean in our case.

    We have been working on "equalizing" everything (mainly real estate), meaning we want to actually own 50% of each. I wonder if your method would make things easier for us.