My sister got married back in the '80's. I remember her telling me that she asked her friends "What do you do with two incomes coming in?" This is a question that I have heard many times, usually from people who have just moved in together/got married. When my sister asked her friends, below are the types of responses she got.
A. It's great having two incomes coming in, you can afford to go to a restaurant every week!
B. We pay the mortgage out of his income and the bills and food shopping out of mine
C. We pretend that his wage is the only one coming in, and we save mine.
Within a few short years, her friends started having babies. A pattern started to emerge. I've always believed that humans are creatures of habit, we get used to life being a certain way. You would expect that Couple A who thought two incomes coming in was great and went out to restaurants and overseas holidays would find it a shock to suddenly be on one wage while one of the parents takes some time off work to look after a baby. It's a big job getting used to the changes a baby brings, without also having to totally change your spending habits and mindset! I used to work in a bank and saw many Couple A's go from being happily married to coming into the bank arguing about money and who spends what.
Couple B also may find they have to change their spending habits, especially if the wage that was paying the mortgage was only just covering the mortgage repayments! Now on one wage, they have to pay the mortgage and bills and food shopping.
I have often seen friends who operate their finances separately (in other words, he has his money and she has hers) also arguing over money when a baby comes along, if they drop down to one wage. I remember hearing one work colleague complaining that her husband still spent his money the same way he did before baby came along (creature of habit), while she not only was not earning an income, but her savings quickly dwindled as she was still paying bills and food expenses out of her savings and buying stuff for the baby. After some harsh words, they reached a new agreement over who pays for what, but she still had to return to work earlier than she planned to as she ran out of money. I remember this colleague explaining how disheartening it was to not have money to go out for a coffee with friends, and her husband not being used to give her any for such a luxury, complaining about having to do so while he still spent money on his cars the way he had always done.
Couple C - Now I remember my sister saying at the time that they were about the only ones of her friends who weren't arguing about money! Surprise, surprise?!?! They were used to being on one wage. Couple C paid all the bills, food shopping, mortgage repayment and spending money out of the husbands wage. The wife's wage went into the mortgage as an extra repayment, helping to pay off their home sooner.
My sister followed the example of Couple C, as did my husband and I when we first moved in together. We had about 5 years together before we got married, and another 2 before children came along. In the meantime, we pretended my wage didn't exist. By the time we bought a house we had saved a considerable amount, meaning we didn't have to borrow much. And certainly by the time children came along, our financial habits had set and didn't have to change much. We still had to proceed with caution, as with me not working for the first two and half years and then only working part time since then, it's harder to save without that second income. We have followed the model of Couple C now for 15 years and have gotten used to it. We don't stress whenever there is a mortgage interest rate rise, and we don't argue about money.
I'm not a professional financial advisor, but I urge you to consider your own circumstances before following anything I have advised here. Think about your spending personalities and which approach would be compatible to you and your partner. Think long term - you might not be buying a house or starting a family now, but will you be in the future? Set your financial habits early in your relationship as they are harder to change later on. Not everyone will be happy following the model of Couple C, but from my experience, it works really well.
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