In Search of Gay Money: Secrets to Domestic Partnership and Money Bliss
As gays and lesbians writing about money, we’ve grown weary of reading all the personal finance content that’s written from the perspective of straight marriages. So at Queercents, we’ve turned the tables on money and relationship advice by asking: What if all of our favorite money columnists were gay? Would their advice be more relevant to our lives?
We think the answer is yes! And as such, this is our weekly series called In Search of Gay Money where we reprint their advice by swapping out pronouns and a few other words to make it seem like everyone is queer!
Secrets to Domestic Partnership and Money Bliss
By Janet Bodnar and Queercents
I was once asked to talk about finances to a small group of gays and lesbians attending a domestic partnership preparation program. As I observed the couples, I felt as though I were watching a scene from Oprah focusing on dysfunctional relationships. What I saw were three textbook examples of how money and partnership don’t necessarily mix well.
One man, Don, expressed annoyance that his boyfriend, Lewis, spent weekends at the mall shopping with his mother — a colossal waste of time and money, in his opinion. Lewis shot back that he had a job, and how he chose to spend his own money, and his Saturdays, was his business. He also pointed out that his shopping didn’t cost any more than Don was spending on his hobby, collecting mid-century pottery found on eBay.
Then there were Carla and Maria. They had been together for some time and had two adopted children. Their financial relationship was a non-traditional one, in which Carla was the breadwinner while Maria stayed home with the kids. Carla couldn’t resist needling her about having no income of her own and complaining that she couldn’t seem to run the household on the money she gave her. Maria retorted that she kept the household accounts and knew where every penny was going — and if they didn’t have enough to buy everything they wanted, it wasn’t her fault.
Sitting on the other side of the room were Peter and Gabe, recent immigrants to this country. Gabe was spending a lot of time and money scouting out native markets so that he could re-create the way of life he was used to back home. But what Gabe considered thoughtfulness Peter considered a wasteful extravagance — a revelation that appeared to take him by surprise.
I couldn’t help wondering whether any of these couples had a chance of making a successful partnership, given such obvious differences about money — and, especially, their apparent unwillingness to compromise. It wasn’t a question of, “Can these relationships be saved?” but, “Should any of them even be thinking about registering for domestic partnership status?”
What went on in the room that night is typical of scenes in households all over America. Merging assets and combining money-management styles that often conflict are among the greatest challenges couples face. The situation is aggravated by the fact that when it comes to money, as in so many other aspects of our lives, opposites attract. If disagreeing about money were sufficient grounds for ending a relationship, we’d be a nation of celibates.
For the sake of keeping peace, women are often inclined not to make waves. But ignoring fundamental differences can be perilous to your partnership. The trick is to address the subject in a way that’s not threatening either to the relationship or to your own financial well-being.
That doesn’t necessarily mean keeping your assets scrupulously separate, or setting out the terms of your partnership in a partnership agreement (although it could mean both). At a minimum, it does mean talking about money early on and being willing to compromise.
Defusing hot spots
Communication and compromise are critical to resolving money disputes with your partner. But you also need practical money-management techniques to cool off some of the hottest issues:
1. Spending too much. Sometimes a spender is in conflict with a saver, and sometimes two spenders stroll hand in hand to the brink of bankruptcy. In either case, each of you would benefit if you wrote down your goals — a new house, an RSVP or Olivia cruise — plus how much you need to achieve them and whether you’re on track. Once you see where you stand in dollars and cents, one of you may be convinced that you need to spend less, or the other may feel more comfortable about spending more.
Another solution is to allow each of you a slush fund to spend as you wish, with no questions or recriminations. Or agree that on purchases above a certain amount — say, $500 or more – you’ll consult with each other before buying.
2. Passing the buck. Whether by design or default, one partner generally ends up as the keeper of the books — a situation that can make the bookkeeper bitter at being stuck with a thankless task, or make the other partner resentful about being out of the loop. Sometimes the solution is as simple as taking turns managing the checkbook, or having regular conversations so that both of you are clear about what’s going on and resentments don’t fester.
Role reversal, in which each partner does something characteristic of the other, is another way to resolve financial differences. For example, a hoarder might indulge in a spur-of-the-moment purchase, or a spender might slip some money into an envelope and put it aside. Then you can compare notes and reward yourselves (not necessarily with money).
And if all else fails, you can always hire a bookkeeper.
3. Taking risk — or not. One of you treasures the safety of a bank certificate of deposit, while the other wants to take a flier on biotech stocks.
You can come to terms with different tolerances for risk if each of you realizes it doesn’t have to be all or nothing. To control an impulsive investor, set a limit on how much he or she can risk — say 10% of your assets. If you’re reluctant to move beyond the safety of a bank, take it one step at a time by investing in an index mutual fund — such as Vanguard’s Total Market Index fund, which spreads the risk by investing in the entire stock market.
If you still can’t reach an amicable agreement, you might seek investment advice from a neutral third party, such as a financial planner, who can act as a buffer to absorb some of the worry — and any blame.
4. Merging your assets. To pool or not to pool? There’s no single right answer to that question, as long as at least one of you is responsible for paying the bills and you’re both comfortable with the system you’ve chosen.
For the sake of convenience, expect to meet each other halfway. It’s easier to pay household bills from a joint account, for example, to which you both contribute based on your income. Also, each person should be privy to the big picture in order to be an equal financial partner in the relationship.
Saving domestic partnerships
Now let’s return to the three financially dysfunctional couples I introduced earlier. Can their partnerships be saved — or should they even sign and file the declaration of domestic partnership form? Yes, if the couples are willing to follow the advice I’ve outlined.
For Don and Lewis, who chafe at each other’s spending habits, the solution is separate “slush funds” with an agreed-upon amount of money that each of them can spend with no questions asked. But they should have a single account for household expenses, and they should consult with each other about major household purchases above a certain amount.
Carla and Maria, whose relationship was strained because Carla, the breadwinner, criticizes Maria for being unable to stay within the allowance she gives her, could benefit from role reversal. Carla should become more familiar with the bills Maria is struggling to pay. She might consider a part-time job that would help the family finances and raise her standing in their relationship.
Peter and Gabe need to talk more about their goals to make sure they’re in the open, and in sync. Gabe assumed that Peter would want him to re-create the meals, and the environment, of their home country. If that’s not important to him, he’d be better off spending time and money on other things that have a higher priority with both of them.
In each relationship, communication and mutual respect would go a long way toward making a successful partnership.