← All Of It with Alison Stewart
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Foreign.
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This is all of it. I'm Alison Stewart. For all of the conversations in today's show, we're taking a look at some of the different ways money can impact our lives. It can be a charged topic. Money is tied up with emotions, expectations, and relationships. And those relationships can get complicated when there are income differences involved. Maybe you and your partner earn very different salaries and you're trying to figure out how to split expenses fairly. Or you have a friend who perhaps recently found herself unemployed and needs to rethink group vacations or pricey dinners. A few weeks ago, my colleague David Fuerst hosted a conversation here on all of it with author and financial educator Farnoosh Tarabi about navigating income disparities. And when we first had this conversation, we took some phone calls. But since this is an encore presentation, we won't be able to take your calls today. David started by asking Farnooch why her most recent book on personal finance is titled A Healthy State of Panic.
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A
The idea is that fear can be a friend. We've often characterized fear as an enemy. And I'm terrified a lot of the time. And, you know, I'm getting things done. I'm getting my finances figured out. I have a career.
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C
So fear is a motivator.
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A
Yes, exactly. So it's, it's part memoir, part guidebook on how fear can be a tool in, in big life decisions.
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C
And how, how common is it for couples to earn very different incomes? And, and what challenges does that sometimes create?
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A
Well, right now we have, you know, we've evolved. It used to be, I guess if we ask this question, 50 years ago it was more common for there to be a single inc in a relationship. And now we have more couples, both of them working full time. You know, I'm very passionate about women's financial health. And so I've looked at, for example, female breadwinners in our country, and that number has grown over the decades where now about 16% of women out earn their male spouses. And I think to your point earlier about this economy being really uncertain, where even if you are on equal footing, there's a likelihood that if one of you becomes unemployed or if a friend becomes unemployed, now the relationship, the financial scale has tilted, and with that comes complexities. So the challenges are, how do we both feel like we're equal financial players in the relationship? I'm talking about married couples specifically here. Even if we're making different wages, how can we both feel like equal providers? I mean, money is not the only way to provide in a relationship. But so often we think it's the most important or the heaviest. And, you know, ultimately, if you have shared goals, how do you support them if one person's making significantly more than the other? So those are the complexities, but you can definitely work through them.
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C
How early in a relationship should you start having some of these conversations about money?
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A
I think that the smart time is whenever you're taking the relationship to, quote, unquote, the next level. And that may be that you are engaging in a big expense together. Maybe it's you're. You're going on annual vacations now together or you're moving in together. My husband and I had our first sort of big money talk where we actually shared things like bank account balances and credit scores before we were moving in. And now you're sharing in the household expenses together. If you're buying a sharing a pet even could, you know, prompt financial questions and decisions around what are we paying for, who's paying for what? So I think you'll. You'll know. And in the meantime, there's a lot that you can observe, David, you know, about each other's financial habits that can be informing.
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C
You know, what's the healthiest way for couples to approach some of these things, like splitting expenses when one partner earns significantly more than the other. Do you recommend joint accounts, separate accounts, a hybrid approach for couples with disparities? Does all of that change once you're married?
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A
There's no one size fits all approach. I think before you get into the technicalities of how many savings accounts do we have and whose names are on them, it's first really about figuring out what do we want to share in. You know, not every expense is going to be a shared expense, especially for blended families. Let's, you know, talk about modern couples, right there, maybe there may be a blended family. One person's making more than the other, but the person making more has things like alimony or childcare from, you know, a previous marriage. And so it gets very nuanced very quickly sometimes in a relationship. But I think first it's about figuring out what do we want to share in and what do we not want to share. And then for the things that we want to share in what, we created a joint account. But even then, it's not about, I pay, you know, for every dollar you put in. I put in a dollar. Right. It's maybe a percentage where the higher earner, where we're putting in each, you know, 20% of our incomes for this shared Pool of expenses, and then the rest we save individually. There are other arrangements, you know, in my own marriage where I make more than my husband. It's been where we've decided he's more of the saver and I'm more of the spender. So I cover a lot of the heavier monthly expenses. But his income saved can be very meaningful for our family. And that's the other thing that I want couples to consider is like, how can we ultimately both feel like we're providing value to this relationship? We're both, you know, contributing in a meaningful way to our goals, whether it's on a weekly basis or on a quarterly basis. So my husband contributes to our children's 529 college savings accounts, where a little bit goes a very long way, especially when compounded in an investment account.
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C
If you start that early. Right?
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A
Yeah, yeah, exactly. And you can reflect and go, you know what, maybe I was not the higher earner, but I helped our kids go to college. That's a great narrative. And so figure out, what do you want your story to be around? Money in the relationship.
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C
We're speaking with personal finance expert Farnoosh Torabi, and I hope I'm doing justice to your name. Let me hear you say it.
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A
Absolutely. Oh, it's so good. It might. My Persian parents are visiting right now, and they're like, they're giving you a thumbs up.
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C
Okay, well, that's very kind of you. And what if someone comes into the relationship with maybe more debt than the other person, perhaps from student loans or credit cards? How would you suggest we handle that situation?
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A
That's a really great question. First, I want everyone to know that what you bring into relationship in the form of debt, whether it's student loans, credit cards, a car loan, if it has your name on it, it still just your debt. Often there's this misnomer that now I'm married, so I've inherited technically my partner's debt. And while it can feel like a shared debt, it's not technically the other partner's responsibility until maybe you refinance it and you put both of your names on it. But just to want to clear that up first, what I have seen many couples do successfully, David, is say, you know, if our goal is we have all these goals, right, you want to buy a house, you want to buy. You know, we want to start a family, and this debt might be slowing us down, we want to agree to maybe accelerating the payoff. So what they may arrange is for the person with the debt to focus Exclusively on it for a short period of time, maybe six months, to put as much as of their income as they can towards this debt that is theirs, while the other partner takes care of more of the household day to day expenses and, you know, is supporting their partner in that way and really but supporting their joint mission in being able to achieve their goals faster. So the debt gets cleared exclusively by the partner that has it, but you're in partnership in doing so. You know, the other partner is footing a lot of the other bills more than they would normally.
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C
You're talking about a lot of ideal, healthy ways of handling some of these situations, but it doesn't always work out like that in, in real life. Right. Have. What kind of problems do you see pop up in these situations? And how would you cancel council handling that?
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Right. Well, specifically when she makes more. David, there are studies that find there is a higher likelihood for breaking up. I think there's so much behind that. You know, one is that our culture tends to expect more from men on the financial front. Pew has done research on this often and more recently they have found that still, even in our, you know, what we think is like a modern world, many Americans, most Americans think that it is still a man's responsibility to, to be the primary provider or the, or make more. And so that's a lot of pressure on couples when that paradigm is not their reality. And that can, if you, that wasn't modeled for you growing up and now you're in a relationship where you're making more or less than what was expected, that can, you know, be unsettling. It's like, how do we actually now manage our money? But more than that, like this makes me feel a little bit less than. If I'm, if I was raised to feel as though I have to be a financial provider primarily and I'm not, what does that say about my manhood, about my ability to provide? There's a lot of sort of, you know, deep rooted conditioning too, that we have to reconcile with. And frankly, you got to get over it. And how you get over it is you have to assume, you have to know that money is just a tool, it doesn't have a gender. And, and if you are a couple and you've made this commitment to achieve goals together and work, walk through life together, that, you know, it's a team effort. Every couple I've interviewed where there's been income disparity, especially where he makes less, when they can reconcile with that and they can put that to bed, that that sort of gendered notion of money, so many more chips fall into place. It is this, we're very stuck in these byzantine, you know, mindsets. And sometimes therapy helps. A lot of times therapy helps. There are financial therapists, actually who have certified financial certifications in financial planning. But in addition to that, they will help you through some of these emotional narratives that we're stuck on and get couples to a better, healthier place.
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C
We are speaking with personal finance expert Farnoosh Tarabi talking about how income disparity can affect relationships here on all of it on wnyc. And let's get to some of your questions, your calls, Jen and Park Slope, thanks for joining us.
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D
Oh, thanks so much for taking my call. This couldn't be more on topic for my life right now. And before I forget, my husband and I did address finances in couples therapy years ago. So we've always had different spending patterns. I tend to, you know, shop a lot more. He's really focused on savings and then we'll make some large purchases. We've been together maybe 25 years. Our finances have always been separate. We own a co op together. I was laid off about three years ago and it started this huge downward spiral of depression. I haven't gotten a job yet. And we're lucky enough to be able to live, barely live off one income. But I'm picking up all the slack I can with all the cleaning, the errands, vet visits and everything. But I'm definitely the less than person in the relationship now. And some of that's my own perception. But he resents that I'm not contributing financially. And we've tried talking about it, but it's, how do we handle this? It's really a problem.
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C
Jen, I don't want to hear you calling yourself less than. No, I really don't. But what an important question. What a great call. Thank you so much for that. And what would you say in response to Jen?
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Yeah, first I just want to say she's not alone in feeling that way. I mean, like I explained, these are really, it's hard, especially if this is your identity. You know, so much of our sense of financial, so much of our sense of self worth comes from our financial worth.
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Right.
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And, and that's unfair to ourselves, I think, to, to have that mindset. I want to mention to our caller and so many people who are doing the hard work of caregiving and, and housework and domestic work, there is a huge economic value associated with that. So while you may not be earning a paycheck that comes in the mail and drops into your bank account. The contributions that you're making for your household are six figures in, in value. And I know that may not be the same as, you know, going to a, a job job and, and, and, you know, working in the capacity that you were in the past. And I've been laid off. And I think sometimes in hindsight you look back and you go, it's the, it's what I needed to sort of rethink my career.
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C
So that's difficult to feel at the moment.
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It is, but it's three years now. She's post layoff. She said, you know, I would, I would want for her to look at this now as maybe, you know, that career was in the past and now maybe it's something new to try. And I, I find that when we are the breadwinners in relationships, there's a lot of pressure to just keep on keeping on and we don't get a break. And so while this break may not have been what she was on, on her terms, let's try to shift the mindset a little bit and think of how we can take advantage of this moment to think about what is it that I've always wanted to do that because I've been on this hamster wheel of earning and providing that I didn't have not been given myself that opportunity to think about that. And so, but it's hard. And I like that she's communicating with it. She's come so far. You didn't get this far to only get this. There's going to be something great for you, and it's your choice now what it's going to be.
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C
And Farnoosh, maybe you can respond to this as well. A question that we received in a text. Hello. My partner makes significantly less than me, and she feels guilty and overwhelmed when I pay more for our bills, even when I clarify that I'm more than happy to do so. What can I say to help her feel more relief rather than guilt?
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A
Hmm. You know, maybe it goes back to an earlier point we made about how to organize your accounts together. So if there are expenses that she wants to feel more of a partner in, more of a contributor to, then maybe, you know, she does contribute whatever she can from her income into a joint account, and that's earmarked for these expenses, whether it's eating out, travel, I think it's also remembering that, you know, partnerships are not just about give and take, that sometimes it's just about allowing the other partner to feel good in Providing, sometimes in being generous. And that generosity can be expressed in many different ways. Your partner likes to do it, maybe in treating her, and maybe she can't afford that on her own. But what are other ways that she can treat her partner in ways that don't even require, you know, buying big things or dinner? Maybe it's conveniencing him in other ways, like opening up his schedule, you know, giving him time back, or, you know, surprising him with some things that, you know, money doesn't solve everything. It's sort of like we kind of. What I'm hearing is that we're. We're comparing, contrasting based on dollars and cents. Well, you spent $10 here, and I did it. Now I feel like I'm not contributing. It's like your time is valuable, too. Are there ways that you can give your time to your partner, your emotional availability to your partner, your. You know, there's so many other ways.
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C
And. Anna in Tenafly, New Jersey, welcome.
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D
Thank you very much. I'm finding this all very interesting, and I would preface it by saying that my sense is that I might be of a different generation than many of the callers. I've been married for 43 years, and my husband and I, from the day we got married with virtually nothing, have had a joint checking account. Both of our paychecks have always been direct deposited into it. All of our bills are paid out of it, and we each make whatever discretionary purchases we want to make with the understanding that we basically share the same values. And to me, this conversation sounds very transactional. And I'm wondering if this is something that is becoming more of a problem, whether it's because of the economic situation in the country or the nature of relationships. But I don't know anyone with separate accounts.
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Suzanne, great question. And what about that?
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Well, I would respectfully.
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Sorry, that was Anna. Anna. Oh, my goodness. Anna. Sorry. Sorry. Great question.
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A
Well, I love that Anna was able to find a solution in a joint account that has endured so many years of marriage. I think that it's important for everyone in modern couples to have independence around money. You know, financial independence and financial autonomy is important for everyone in a relationship. And that doesn't mean that having just because you have joint different accounts means that you're not in it to win it together. It's more so that often when couples come to me with disagreements, with arguments, lo and behold, we learn there's one joint account. It's really hard for couples to communicate around money, especially when we're coming to relationships. With our own financial practices, practices and habits and stories. And not to say that we can't work through that, but sometimes having your own account, it provides a boundary that's really healthy that says, this is my money. I get to use it for what I want. And we can talk about what that is. You know, I'm not going behind my partner's back, but we're going to earmark our own separate accounts for things like gifts and treating ourselves and just having our own independence with it. And then, of course, that you can have a joint account for joint expenses. But I think nowadays couples, they're getting married later in life, and by that point, they may have earned, amassed some wealth or maybe they have real estate. Maybe they have, you know, assets that they want to protect. More and more couples are getting prenuptial agreements. It's not just for the wealthiest of couples. It's, you know, marriage is a contract. It is actually a transaction. So to treat your money in a little bit like that, I don't think is unloving or not compassionate. It's. It's practical, and it does, in practice, alleviate a lot of the stress and arguments that couples have around sometimes frivolous things like, oh, I can't believe you spent X on sneakers, or how much did that new iPhone cost? You know, it's. We're all working hard, and we all deserve to have a piece of our own money for our own discretion. That's my opinion. But I think it plays out pretty nicely in most couples in those relationships.
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C
I can't believe I spent that much on sneakers the last time, by the way.
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A
No judgment. I don't judge, you know.
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C
Well, thank you. Thank you. That's very kind. I had so many names to look at that I said the wrong name coming out of Anna. But since I mentioned Suzanne, let's hear from Suzanne calling from Philadelphia. Welcome to all of it.
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A
Hi.
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C
Hi.
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D
Thanks for taking my call. Farnish. Thank you so much. I just love this conversation. My story kind of patterned the previous caller. I was exactly like that. My husband and I married in 83. You know, I was fresh out of graduate school. He had just graduated from college. He was an engineer. I was a teacher. So from the get go, he pretty much made 70 to 80% more than I did. But when we married, we combined all of our money, we paid all of our bills, and we worked that way for 27 years of marriage. And it was okay in hindsight, but not really okay, because 27 years after being married, we decided to separate and Divorce. And it was at that time we were preparing to sell our home, and we were still in the same house. And he said, you know, it's only fair that, you know, since I'm making, at this point, 70% of our combined income, I should pay the 70 and you should pay the 30. Well, my goodness, when I saw it play out in my checkbook, because we had opened up joint, you know, single accounts, and I was like, wow. And I was able to actually save money in the year that, you know, we were getting separated, divorce, selling the house, and it really leveled the playing field for me. And I only could think about, had we done that for the 27 years we were married, I would have been in such a better financial situation. And, you know, we separated amicably. It wasn't like we were at each other's throats, but had we done that, I think I would have been. I was able to get a house, but it would have been easier for me. I would have been able to have money in the bank for my children. I would have been able to travel more easily. Like, the list goes on and on, right? So we had love for each other, and that was definitely there. But I think I'm agreeing with Furnish that having that separation would have led to more respect. Not that he didn't respect me, but I did so much of the household stuff, too. I think it just would have made me feel better.
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C
Farnoosh, that. That's really. I'd like to hear you respond to that. A lot of people are commenting about things on either side of that topic right now.
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A
I mean, there's so many schools of thought, and I understand where, you know, the. The one bank account mentality, why that works for some people, but I just feel like, you know, just to echo our listener here, not only does it, I think, earn you, makes you feel more respected, but I think it gives you more optionality in when times get tricky. You know, let's be real, like, 50% of couples end up divorcing, maybe more. And so in those moments, my goodness, wouldn't it be helpful to have your own credit card, your own bank account, your own credit score, so that you can start to rebuild your life that much faster? But even while you're married, it's. It's helpful. It's to. It's. It's. Again, I. Not to sound like a broken record, but financial autonomy, my goodness. It's not just a nice phrase to say, like, in practice, it means that you have options, you have more freedom, you have More room to play. And that's sometimes what couples are just looking for. They're just looking for that permission to go spend like they want and not feel like they're being financially parented or they. Everything has to be a discussion. And now you're bringing up your past. And, you know, money's very emotional, so just creating a healthy boundary like that in the form of a separate bank account. And this can be where you have your joint account. So it's very transparent. And that's something I want to mention, I didn't yet, David, is that all couples should have transparency around their money. So you know what's in the joint account and then the individual accounts and all the other accounts. There are apps that can help you with this to put everything on one dashboard. You should know each other's logins.
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C
Yeah. You're not advocating for hidden accounts.
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Of course not.
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C
You're talking about transparency.
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Yeah, but it's so easy when, say, there's one earner in the household or there's one financial provider or the person. There's one person that's managing all the money. That's a very traditional way of doing it, but it still happens. And in that process, the other partner is, is in the dark, and that can be dangerous.
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C
We're speaking with personal finance expert Farnoosh Tarabi, and I want to read this text that we received. We discussed finances as well as other relationship issues with a therapist before we became partners. We are both savers and have never had an issue about it. Sometimes he made more, sometimes I made more. Each partner paid a percentage based on income. Today is our 37th anniversary. Well, first of all, happy anniversary. Thank you for sharing. Thank you for sharing that. What's the key in that text? Farnoosh saying that we are both savers. They both have the same kind of mentality to begin with.
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A
They're an anomaly that Michigan University of Michigan has done a study on this, and they find that often spenders attract savers and vice versa.
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C
Oh, interesting.
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A
Financial opposites attract. And so to find your financial partner in that sense is, is rare. And, you know, hold on to that. But I also think the key word was therapy.
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B
Ah.
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C
Ah.
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B
Really?
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I, I, my, my light bulb went off when I, when I heard that. I think couples that engage in therapy, especially around their money, when there is, when there are differences of thought and differences in how we were raised around money, can be instrumental in finding common ground and avoiding arguments.
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C
And let's see if we can take another phone call. This Vanita calling From Skillman, New Jersey. Welcome. Oh, Vanita dropped out. Oh, that's so sorry. Let me see if we can go to another call. Nancy, thank you for joining us on all of it today. Calling from Suffolk county, is that right?
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E
Yeah, that's correct. So similar to the text message you just read, I've been married for 42 years. We didn't therapy, but my husband and I agreed on a joint account. So it's yours, mine and ours. So we had separate accounts and we based our what we saved and what we needed for vacations, for food, for, you know, rent, for whatever on salary that we made. And our salaries fluctuated as the years went on. Sometimes I made more, sometimes he made more. So similar to the text message you read just before, and it works. You know, I have my money that I, you know, discretionary money that I could spend and, you know, we discuss it, but it's, you know, unimportant to him. If I buy, you know, outfits or extra shoes or whatever I buy or give, give money I get, I give a lot of money. I donate a lot of money. So. So it worked.
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C
It worked.
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A
I mean, it worked. What can I say? I think our work is done, David. We figured it all out, all listeners.
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C
That's wonderful. Do that so we can finish by feeling like we wrapped it all up in a nice tidy bow there. But obviously some of these questions are very difficult. You could read more about all of this in some of your books. Your most recent book is called A Healthy State of Panic. And let me just mention once again, I think that's a fantastic title.
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A
Thank you. Thank you so much. And if you're interested in female breadwinner dynamics, I also wrote a book called When She Makes More, and that one might be of interest to our listeners, especially on this topic.
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C
I'm so glad you mentioned that. That's called When She Makes More.
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B
That was David Firth's conversation with author and financial educator Farnoosh Tarabi. And that is all of it for this hour. We'll have more money talks after the news, including a look at the challenges that Gen Xers face as they head into retirement and how a changing climate has also changed the risk calculations of home ownership. That's all coming up on ALL OF IT after the news.
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A
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