Monday, February 04, 2008

The Wealth Gap in Relationships: Too Big? Too Small?

Here's a question I've been thinking about, regarding financial inequality in relationships: if you were going to have a partner who made more money than you, what kind of difference would you be comfortable with? If you made $75,000 a year, do you think it would be harder to be with someone who made $150,000 a year, or $1 million a year? Would the source of their income make a difference, i.e. whether they worked for it, or inherited a big nest egg? How might this change depending on the actual incomes involved? Is the difference between someone making $25,000 a year and someone making $75,000 a year going to cause more or less stress than the difference between people making $100,000 and $300,000? And does it make a difference if the relationship is gay or straight, and whether it's a man or a woman who makes the higher amount?

Let's say you were seeing someone who made more money than you. You don't know exactly how much more, but guess it is maybe two or even three times your own income, but not more than that. You want to feel like there is a balance in terms of who pays for things, but can sometimes feel like the person who makes more should pay more. But you're both considered middle-class. Maybe one of you is more upper middle class, and enjoys a few extra luxuries with that extra money, but you're both in a position where you work hard to make money, worry about saving enough to support your retirement, and feel like you are surrounded by people who make more money than you.

Then let's consider this alternative: you're seeing someone who was born into a wealthy family. They have some sort of trust fund whose income will comfortably and even luxuriously support them for the rest of their life. You yourself are solidly middle class, with some savings and a decent job, but no hope of ever inheriting any significant wealth. You might not be experiencing any financial hardship, but you know you have to be careful about money in order to stay financially secure.

In which of these situations, if either, would you feel more comfortable saying "hey, you know what? I can't afford to do X, Y and Z, and if you want us to do it together, you're going to have to pay for it." Assuming that the wealthier member of the couple is willing to say "Of course I'll pay for X, Y, and Z. Doing it with you is more important to me than the money," could you just accept that, or would you feel guilty?

And on the flip side, what if YOU are the one making more money? What kind of gap would bother you if you were seeing someone who made less money? How much more money would you have to have before you would feel comfortable paying for more than your share, or would you pay for everything without even thinking about it?

28 comments:

Anonymous said...

I have been in a relationship where I made more than my mate, and although I liked to save, he liked to spend. I would offer to pay more sometimes, but as the man, he often felt he had to pay even though he couldn't really afford it (used credit cards). It was tricky. I've never been in a relationship where the guy made more than me, and that makes me sad. I want to live the kept life for once.
Tough questions for a Monday. :)
-Tasha

DogAteMyFinances said...

I've never dated a guy who makes more than me, but I do know quite a few.

In my opinion, if a guy is going to be threatened by how much money I make, he isn't go to support me, and it's not going to work.

I wouldn't judge guys by how much money they make, but I would judge them for, say, not going to college because that shows an incompatible level of ambition.

Fabulously Broke in the City said...

I have dated plenty of guys who haven't made more than me... but while it isn't an issue for me, their laziness is.

Let me explain...

If I earn a fair amount of money, and he earns much less, but has the ability to educate himself and earn more (and shows the potential/willingness to), but doesn't do anything about it because I'm his 'sugar momma', then it's over.

It all boils down to their laziness...

But generally the guys who've made less than me always feel inferior and try to pay for everything and then feel resentful that they don't earn as much, or they go the total opposite and treat me like a meal ticket.

Anonymous said...

As others have said, it's all about the compatibility of attitudes and goals: if you both have similar levels of ambition, and similar financial goals (i.e. you both understand "saving for retirement" to mean roughly the same thing), I think the rest works itself out. My salary is about half that of my boyfriend, but because we have very similar attitudes toward spending and saving, we don't find money to be a source of tension.

T'Pol said...

Your post instantly reminded me of a phrase which I had learned as a kid while I was learning the English Language: "Birds of a feather flock together". I do not know if it really fits the situation but, I just remembered that.
Substantial differences would bother me but, I can stomach a difference of may be up to a quarter of my salary? In my culture, a man earning less than a woman can easily become a pain in the neck. Macho men of my country (however well brought up and civilized they may be) will never admit that they feel weird about it but, they will, deep down. I guess that explains why I am 41 and unmarried:)

Anonymous said...

I feel a little bit like the first anonymous poster. I make more than 2x my fiance's salary, but he is definitely spendier than me. He claims he makes too little to save, but he has enough for "toys" and other things I consider frivolous (CDs, DVDs, fancy electronics, eating lunch out every day). Our finances are still completely separate, but I worry that when they get combined, he is going to spend my salary as well as his on these things that I think are a total waste, or things that I deny myself because I know it is important to save. Reconciling our financial attitutdes is something we are working on, and we've made progress, but it is definitely a challenge.

Anonymous said...

I earn about 3 times as much as my partner, but because she has similar ideas about money and saving (she's very frugal) and is a professional (an attorney, like me) money is never really an issue. I don't mind paying most/all of entertainment/travel costs, etc. because I want to do those things w/her.

Anonymous said...

My boyfriend makes less than I do, but is in a better place financially than I am right now (I'm still working towards debt free while he already is and has built up relatively substantial savings). We tend to balance each other out with who pays for things though. We're long distance, so most of our "dates" are weekends or longer away and the general rule is usually whoever had to pay for the plane ticket is exempt from paying for meals and activities. When we both fly somewhere to meet up, I'll usually book and pay for hotel rooms and he'll pick up the rest.

I also have a male friend who any time I visit insists on paying for my meals even if I'm already inconveniencing him by asking to crash in his guest room and letting him drive me around. I know he makes more than I do, but I always try to sneak in paying for a meal here or there (I have to be quick, and he usually argues) because to me it otherwise feels like I'm taking advantage of his friendship.

ichimunki said...

My partner earns about five times more than I earn. i think we gradually settled into a pattern during dating. He pays for the rent and utilities. I pay him $600as a contribution for the rent. He generally brings home dinner from work because he works late and they comp his dinner. I eat a fairly small dinner so a small side dish works. I pay for any clothes, other meals, household cleaning, laundry, socks, undershirts, etc. We try to split the meals from takeout but I have noticed that he has been paying more lately. We both save a bit of money each month because we are not big spenders.

Shawnna said...

My partner makes more than twice as much as me. I do feel guilty when he takes me out to super expensive dinners and such, and I can't contribute because I make so much less AND I have a ton of student loan debt. He had everything handed to him in terms of cars, gifts, and education before he graduated from college, and I'm a little resentful of that. It also creates a little friction between us because his understanding of the value of a dollar and mine are very different. Overall, I'm okay with making less. I'm an artist, so I'd be fooling myself if I ever thought I'd make as much as he currently makes.

Anonymous said...

As a lesbian, I wonder about the differences between gay and straight assumptions when it comes to this issue. I worried about it in dating my partner, who is finishing dental school. I just finished a PhD in history, so my earnings are pretty low, and will never equal hers. I suspect in a few years she will earn 3 times as much as me, and it will probably stay at that ratio. I do feel that I don't contribute as much, and worry about the power differential in our relationship. I also worry about getting used to our combined income and then breaking up and going back to just mine, especially after having children.

Andrew Stevens said...

I make ten times as much as my wife. We're married so the issues you talk about simply don't come up. (We don't do the your money / my money thing which would obviously be a horrible injustice to my wife.)

Anyway, I suspect this matters a lot more to women than men. I doubt you'll find many men being too concerned about "incompatible levels of ambition" or "laziness" like the above commenters. Perhaps they should be, but by and large, they aren't.

NZ girl said...

DogAteMyFinances said... I wouldn't judge guys by how much money they make, but I would judge them for, say, not going to college because that shows an incompatible level of ambition.

A bit judgemental don't you think? My partner never finished high school let alone college but is one of the most intelligent people I know. He is a plumber (it is his own business). Not only can he do that but he know various other trade-like skills, things I have no idea about. He and I flip-flop in who earns more and we are both okay with whoever is on top for the moment. If anything I am the one who wants to earn more than him.

stephanie said...

I am a recent college graduate. I have a decent job (I don't make a lot of money, but I have great benefits which allow me to save a lot of what I do make) and also made good money waiting tables and bartending through college. As such, I usually, if not always, have made more money than people I have dated. It doesn't bother me that I make more, but it does bother me that I also tend to be much more responsible with my money. From past relationship experiences, I have determined that I will NOT be able to have a successful relationship with someone who is in a large amount of debt (especially if they do not make efforts to pay it off) or someone who wastes all of their extra money. I don't mind contributing more to the relationship financially, but only if the person I'm dating is making an effort to do well for themselves. I believe that someone's money is theirs to do with as they choose, and I am NOT going to let myself stress out about someone else's finances or lecture them about what they should be doing, but I'm also not going to let myself get into a serious relationship with someone whose financial goals are contrary to mine (or nonexistent!).

Anonymous said...

I think it's more important to have the same attitudes towards money than worrying about the eventual differences in wages. If one person is a big spender and the other is frugal, that is bound to create problems. I don't mind making more money than my husband, and neither does he. As long as he loves doing what he does, that's what matters to us.

Anonymous said...

I make twice what my husband does, but since I handle all the money, he doesn't even know it. It would bother him (a lot) if he realized how big the difference was.

It doesn't bother me at all - what does annoy me is that I work twice as hard as he does, and still have all the housework/shopping/laundry/bills to do, as well as doing about 80% of the work involved in taking care of our 4 kids. So I guess it's really about equal effort and commitment rather than equal $$$.

Anne

Ryan said...

On the guys side. I have dated females who did have some money. I feel extremely awkward if they pay just because they have the money. But it wasn't money they earned, it was from a wealthy family. I feel not just about it being equals for both but from a guy's point of view it is not right. I hold onto the gentlemanly view of yes paying for dinners and things of that sort. I am totally not against a female earning or anything like that, just as a guy it does feel very weird to have a girl paying your way in dates and other things.

Now for family, salaries would be combined so i would not bother me.

Anonymous said...

I once dated a guy who earned less than half of what I did and complained all the time that he never had any money. When I pointed out that he could take advantage of some training programs, etc. and try for a promotion he pretty much scoffed the idea off because everyone where he worked "hated" their supervisors and he didn't want to become one of "them". Whatever, his lazy a@@ was history.

I think at a certain level I'm ok with income differences...but you do have to willing to work for the life you want to live and not expect things to be handed to you.

Chief Family Officer said...

My husband and I make about the same amount of money, but even if I weren't working, money wouldn't be an issue since we really have reached the point where everything is "ours" and there's no "mine" or "yours". When we first moved in together, it was a little awkward, because even though we were earning the same amount, I had student loan debt and no savings, while he had savings and no debt. But he made me feel like we were a team right from the start, and that went a long way toward making me feel comfortable about using "my" money to get on stable financial footing and "his" money to pay bills.

Strange Bird said...

When my boyfriend and I met, I was working and he was in grad school. He's about to graduate, and I just went back. I will probably go back to earning quite a bit more than him within the next five years. It's a little bit of a problem because I come from a very socially conservative family, and although I don't consider myself to be, there are still certain values that I've grown up with that are a little hard to shake--like that, if there are children, I should be the one to take time off from work and/or reduce my hours to care for them, and he should work longer hours to pay for them. It's pretty unlikely, though, given that I will probably be the higher earner. It's ridiculous to me when I say it out loud (or write it out, whatever), but it's definitely something that I grapple with.

Anonymous said...

My significant other and I are in this situation at the moment. I'm a law student, and my only source of income is student loans, so I'm trying to live as frugally as possible. He, on the other hand, started his career in June, and is earning a pretty decent salary. I have to admit, I find it frustrating when I can't afford things that he can, or when I have to ask if he can pay for dinner, etc., because I'm waiting for the next installment of my loans to arrive. I've had to get used to saying "If you want to do this, you have to pay," but I don't like it one little bit!

I think what saves us, though, is the fact that I'm typically the spender in the relationship, whereas he's naturally frugal - so, although he's making more money, he tends not to suggest that we do very expensive things.

It will be interesting to see how this dynamic changes once I'm done school, as I'll probably be making more than him within 3-5 years of graduating.

Amy K. said...

This was a huge source of personal turmoil when we first moved in together, when we bought the house, and, really, it still flares up once in a while. I hang a lot of my independence on being able to pay an equal share, and by equal I mean straight-down-the-middle, 50/50.

However, he makes almost 2x my income (65K vs 115K), and would happily just pool our money and not fret about how much each of us pays in. We budgeted for our house based on 2x my income, because I was adamant about paying half of everything. And then I totaled my car, and suddenly had a car payment and higher car insurance, so I had to cut back on my discretionary spending. I got really resentful of his discretionary purchases, but he had so much discretionary money because I was keeping the bills to an appropriate level for just over half is income, so he had a HUGE pool of fun money. Finally, I snapped, saw reason, and agreed to split expenses based on income. It's not quite the one-pot plan he'd love, but it's equality in a different light, one that I can deal with.

Now, if he made 5x what I make, how would I feel? I have no idea - probably pretty freaked out, and I'd probably need to prove my worth, my independence, my value. I know that I'm just proving it to myself, but it's still important. I need to feel like an important contributer to the situation, and money is a very tangible gauge of that.

Anonymous said...

I make more than twice what my boyfriend makes and I know it bothers him a little bit even though it doesn't bother me. I am happy to pick up the tab for drinks or dinner now and then. He is a professional musician and I'm a lawyer, so it's unlikely that he'll ever make substantially more than I will and I am okay with that. However, I have a ton of law school debt and am trying to live frugally so our lifestyles are pretty similar. Also, we are in a same-sex relationship so maybe the old fashioned rules don't really apply to our relationship. We're talking about moving in together and once we are splitting rent and household expenses I will probably be contributing more each month than he will, which is fine. We are very open about money and I think that will really help us going forward. Great topic for a post!

mara of portland said...

my sweetie makes significantly more than I do, and like Amy K. above, I feel that I need to assert my hard-won equality!

we've been together a few months now, and we have an arrangement on who pays for what -- we trade off meals and visits, keeping it roughly even. I would feel uncomfortable with him paying for high-ticket activities or gifts at this point, even though he's offered. I do not want to feel like I'm being bought. maybe I'll lighten up about it later. I feel like a frugal drudge for not wanting to do special expensive things, but if we ever decide to go on a fancy vacation, I want to enjoy it with a clean conscience, not feeling like I'm taking unfair advantage of his higher income (or spending my money on something extravagant that I shouldn't).

on the bright side, we have very compatible views on personal ambition, saving, spending, what money is for, etc. I don't feel at all uncomfortable talking to him about financial matters. I guess it will make for some interesting conversations if we progress toward moving in together someday!

Anonymous said...

It is important to me to be with someone who is financially successful. Period. I would resent a partner who did not fit my definition of 'successful.' However, coming from a rather poor background, my definition of financially successful is probably not what you think. And after putting my DH through grad school it is amazing how my financial goals have changed. I now value quality of life so much more than sheer amounts of money.

My spouse works and I'm a SAHM and it doesn't bother me in the least bit that I don't bring in income. Not having to work (for money) is a huge luxury that I am currently loving.

When I was single I rarely paid for dates. I never asked or demanded that my dates pick up the tab, it was just something they (and most people that I knew) did.

I think the most important thing is to be financially compatible, and be willing to compromise in areas where you are different, to achieve financial security.

beth said...

I read about a couple in this situation, and they handled it by having a "date wallet" - each kicked in some agreed upon amount, and took turns handling the funds. I thought that was brilliant.

Anonymous said...

My (same-sex) partner earns about 1/3 more than I do, and also has a private income worth more than my salary. She owns our house outright, lent me money towards my car, and pays for more than I do for all holidays, meals out etc. We had arguments intially where I have insisted on paying my own way but it's just not practical if we want to continue living the way we do so I gave in and let her pay the majority.

She would rather pay and enjoy life, and it's fine by me. I am able to treat her sometimes and buy her presents when I want to, and save a decent chunk for the future. I love her dearly, and love our life together and realise how very lucky I am.

Anonymous said...

My boyfriend makes around $500,000 and I make around $40,000, so the difference is very noticeable. We keep separate houses by choice (we both prefer to live alone, plus I have a daughter from a previous marriage and while he gets on fine with her, he's also childless by choice so moving a kid in seems a bit ridiculous) and our finances are not pooled, again by choice (mine). He has the luxury of being able to save far, far more than me *and* have a lot left over for discretionary spending. I, on the other hand, have no hope of buying a house where I am on my salary (south-east UK), and while I don't live paycheck to paycheck by any means, I have very little discretionary spending money while I try to meet savings goals.

He would love to spend more money on me or on my behalf than he does, but I have a big problem with feeling kept (stemming in part from my disastrous marriage) and need to know that I am able to run my life with my daughter on what I earn, without relying on anyone else. I also feel guilty if I ask him for money - although it's the sensible thing to do on some occasions, I really have to steel myself to do it and spend a long time justifying it to myself and to him.

The way I get around it (in my head, anyway) is that he pays for things we would not have had if he weren't paying for them - he's just paid for a lovely fortnight's holiday for the three of us that I would never have been able to afford, and did not *need*, and would not have missed if we didn't do it - but it was very, very nice. That's fine by me. He's also very good at justifying paying for things for me - for example, he pays the running costs for my car, as the only reason I really need it is to be able to get back and forward from my job from his house when I'm there - from my flat it's an easy walk. I still don't like mentioning to him that I need to get it serviced, and about half the time I pay for it myself anyway, but he now knows that he needs to ask me, which has put paid to that cunning plan.

He's got a magnificent knack of paying for stuff without letting anyone else notice (he does this with everyone - he earns vastly more than any of our circle of close friends, and is a master at, for example, spiriting away restaurant bills before anyone else has seen the total). He also understands what it is like having very little money, having spent the first five or six years of his working life living like a pauper. This helps a lot when I have to explain that, really, I would be much more comfortable if he didn't pay for this thing that I don't need, because I'm having trouble with my head about it - he's been there too, and knows what it's like, and understands my need to be able to say that I pay my own way.

So, I do feel guilty about him paying for things, but we talk about it (incessantly sometimes - poor chap) and he knows when to back off and let me be for a bit because I tell him when I'm getting wobbly about it. He definitely does the "I can afford to pay for business class tickets (or a fancy restaurant, or a night at the theater or whatever) for all three of us, and I would much rather you came with me, so please will you let me pay?" thing, but he also understands if I say no and always checks during and afterwards that it's still OK. I'm getting better at letting him do it - this has been helped by him basically being an open book to me as far as his finances are concerned, and me believing him when he says that he genuinely doesn't notice the difference when he pays for a meal or car repairs or whatever, and realising that I am able to run my own life without his help.

A little bit of me thinks I should grow up and let my boyfriend spend his money how he chooses to spend it - he's not irresponsible by any means, and clearly able to work it out for himself - but I think I'd turn into a different person if I did that. It will be interesting to see what happens when I start earning more - I am in the process of training for a much higher paid job, and once I start earning (a bit!) closer to what he earns, I think I will feel better about him paying for some things - because I will be able to return the favour. But it works now because we talk about it.

I have an friend whose new boyfriend makes obscene amounts of money - he sends his second helicopter to pick her up from the enormous house he bought her in th country, which she loves and he hates - and she doesn't understand why I don't let my boyfriend at least help pay the rent on a nicer place to live. He'd do it like a shot, but I can't let him, and she really doesn't understand that. Shrug - different people.