Both spouses should be empowered to manage the household money, writes Maya Fisher-French
Money is a big issue for many couples, so much so that it is the main cause of divorce.
But finding an equitable way to manage the household finances is a bit like finding the holy grail.
The main issues for couples around money are: a discrepancy in the amount each spouse earns; different views on how the money should be allocated; one spouse is a spender while the other is a saver.
There are few married couples who both earn the same income – invariably, one spouse earns more.
If they are parents, the father tends to be the main breadwinner because, in many cases, the mother has taken time off to raise the children or has chosen a career that allows her more flexibility, and therefore pays less.
Added to that, women on average earn less than men. The Women in the Workplace research programme run by the University of Johannesburg found that women earn 15% to 17% less than men.
To put that into perspective, a woman would have to work nearly two extra months a year to have the same income as a man.
This is due to many factors, including that women tend to select careers that are in the caregiving sectors such as nursing or teaching, which pay less.
Employers also view women of childbearing age as more likely to leave their employ, so they are less likely to try to retain them with higher salaries.
So, if one of you earns more than the other, especially if the reason is because you have children, how do you create a household budget and investment strategy that is fair – if you recognise that economic value is not the only value in a relationship?
One of the best models I heard about relates to a couple where the wife was a stay-at-home mum and the husband’s salary was divided equally between them.
The wife received half his salary in her bank account and, together, they drew up and contributed towards their household and personal budgets, as well as investments.
This is a very empowering way to manage finances for both spouses. It requires both partners to be aware of how money is spent and what provisions are being made for the future – this will lead to better decisions.
It also allows for reasonable discussions about how money should be spent without negative power role-playing coming into the relationship.
This, of course, only works if there is a household budget – as a couple, you can clearly see how much is needed to meet your basic needs of housing, electricity, water, groceries and insurance, etc.
In this model, you both contribute equally because you effectively both have the same income.
You can decide if you want to invest together or have your own separate investment plans and goals, although I would recommend you have a consensus on retirement planning because that is income that will be shared in the future.
You can also allocate a portion of your income to personal spending, where you can spend your money on things you enjoy but that your spouse may consider frivolous – as long as the bills are paid and the retirement savings are on track.
Other couples divide the household expenses based on percentage of income. For example, if one spouse earns 30% of the total household income and other 70%, they contribute accordingly to the joint expenses.
This requires trust and openness in the relationship, but maybe if you are unable to be open about what you each earn, then the problem is the relationship itself.