Create a Happy Marriage with this Money Strategy
NEW YORK ( MainStreet) New York City Police Officer Michael Teneriello says there's plenty of love in his marriage, because he evenly pools money with his wife, Diane, every month.
"She's a teacher, so we put both our paychecks into the same bank account and then we distribute the money to pay bills and go on vacation," said Teneriello. "I would feel sad, angry and betrayed if Diane was stashing money on the side."
With more than 20 years of marriage behind them, the Teneriello's financial strategy is working.
"Anytime you do things separate, it has a tendency to work its way into other decisions," Teneriello said. "There should be no secret funds kept for any reason if you have an honest and open relationship."
A study under development by an associate professor of business administration at Harvard Business School confirms that pooling resources is a viable way to stay married.
"A very strong predictor of marital satisfaction is the extent that you have pooled your money," Michael Norton, co-author of Happy Money (Simon & Schuster, 2013). "Eighty percent or higher is where it's really strongly correlated to be happy with your marriage."
The reality is that most husbands earn more than their wives. According to the U.S. Census Bureau, the median annual earnings for full-time, year-round women workers was $37,791 last year compared to $49,398 for men.
"If a spouse is bringing in 75% of the income, it is probably not fair or practical for the couple to split everything down the middle," said Jason Kolinsky, a certified financial planner with Kolinsky Wealth Management. "They need to go through each regular expense and find a proportional way to share those expenses."
In the event of conflict, taking a time-out can help minimize misunderstandings.
"All too often, one spouse possesses most of the financial information while the other conveniently and sometimes eagerly avoids it, because knowledge comes with responsibility," said Laurie Puhn, a lawyer and author of Fight Less, Love More: 5 Minute Conversations to Change Your Relationship Without Blowing Up or Giving In (Rodale, 2012). "To put yourselves in a safe balance for the future, have a five-minute conversation about the importance of sharing financial information."
The preliminary findings of Norton's study indicate that the benefits of sharing applies to unmarried couples who live together as well.
"The higher percent of money pooled is not only a predictor of being happy in your marriage, but if you are pooled and not married, it's a strong signal that you will get married at some point," Norton said.