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Gays and Financial Planning

So, this past weekend my mom bought a new iMac for the family computer… GO HER!

But, she’s not telling my dad about it till the credit card bill comes. This was brought up between Constantine and I while we were driving somewhere this weekend. I mean, does that really seem like the right way to do it? If you are spending the family money, you should really discuss it with the other family people before you go out and buy it, right? This happens all the time in my family and it’s really quite frustrating.

So Constantine and I were talking about it and it’s been on my mind since… How would you handle the financials in a gay relationship? When you are straight and married, there’s precedence for how these things would work out in the legal battles of divorce, especially if there are children.

I have a few ideas on the whole matter. First, if you are just living together, a newly formed household, after only dating for a year or whatever. Money matters should probably be kept separate. This would be a time of testing still to be sure you are compatible. Once you move in there’s tons of things that can change or you might realize while you are just dating. Did you know that he or she gets a $5 cup of coffee every morning? Did you know that even though they say they are making and saving a ton of money that they actually just spend it all?

I don’t really feel like it’s my place to ask to see my partners financials until we are very serious. IE although I have an idea of how much Constantine makes and what he spends, I wouldn’t flat out ask him to see. These are pretty personal things, and although I feel you should ask BEFORE you move in together, sometimes that just doesn’t happen.

During this first year or so of living together, the household expenses should really be split based on how much money the person brings in. Lets say that person A brings in $100,000/yr and person B brings in just $50,000/yr. Your rent is $1,000/mn. In this situation, person A would pay 66% of the rent, or $666. While person B pays $333. This will tend to keep things fairly equal to how they were before the move in and they should both still have a fair percent of income to live on. It would be unfair to make person B pay an equal share in the rent in this case because it would take a larger portion of their income.

Also during this time, you should really try and discuss any major purchases with each other before they happen. Even though the money is still technically, “MY” money and not “OUR” money, this will help you to work out the kinks in money spending. In this case, person A may be used to buying Gucci clothes and eating $40 lunches where as person B may be used to buying Old Navy clothes and taking lunch to work. During this time you can work out how the family money should be spent. Should person A still be getting $40 lunches and person B be taking lunches to work after the merger of money? Probably not as this would build up anger over the years between the two.

After a sufficient amount of time, the money should be merged. By now you should both be pretty close to being on the same page. Do we still spend all that money on Gucci clothes, or do compromise and both get cheaper but still nice clothes at the Banana Republic?

How do you handle big purchases like cars? Do you both get new ones at the same time, do you stagger them? It’s all so confusing!

All this stuff is really pretty standard between gay and straight….

But all this brings up the idea of, what if we split up? How do you un-merge a gay relationships money? Should both of them be allowed to get half of everything as if this were straight? What if it’s 20 years later and now person B is making $200,000/yr while person A is still only making $100,000/yr? And what if this huge increase in person B’s income is only because person A supported them while they got a masters or other education? On the other hand, what if the increase in income was all because of smart choices before the two got together?

This is all very twisted, in most cases people would say, “well what about a pre-nup”, etc.

But are those even really fair? Do they hold out? For me, personally, they are just asking for failure with those. It’s as if you are admitting straight out the door that you are expecting failure.

These are all just the millions of other thoughts that have been flying around my head the last couple days. I wish there were easy answers!

7 replies on “Gays and Financial Planning”

Ya know what I was thinking the other day — I look forward to the day when society looks back and thinks that not allowing gay marriage is an absurd thought. I mean — today, we think it was ridiculous that at one point in time women weren’t allowed to vote. Just a thought!I don’t like the idea of divorce and splitting $ 50/50. I think you should leave with exactly what you came in with.

It may be different for us since Rick and I are married, but we have three bank accounts. We each have an account. Plus we have an account to take care of our investments. For the most part, we invest my salary and we live off of Rick’s salary. We have a legal corporate agreement that basically says that if the corporation dissolves, we split assets equally. Right now I am earning far more than Rick is, but one day in the not too distant future when I am no longer able to work, he will earn much more than I do. It works for us, but then we are totally committed to one another.

I look forward to that as well. Thankfully we can at least have the ceremony, and as a_trick_mind pointed out, using a corporation is a good way to go. Although it also does create a few issues in some senses.
I think that if you haven’t been together very long, that leaving with what you came with is a good idea. But what happens when you have been together for 10-20 years? How do you decide what you came with?

Hey, I hadn’t thought of a corporation. It’d be interesting to sit down with a lawyer and accountant to see how that would play out tax wise and stuff.

Good idea! 🙂

Gay or straight, the issue of money within a relationship is certainly a major topic of discussion. Looking back, when I was engaged my wife and I opened a bottle of wine for an evening of “full disclosure”. We essentially put all the cards on the table and reviewed our financial situation (debt, income..etc.). I suppose that if either of us were in a bad situation financially, the other could get out before the “big day”. Once we were married it became a single “pot” of income and debt.
Reading the story about your Mom, I can’t see myself in that situation with the way we bank. At any given moment I can log into our accounts and see where the money is going. This is very tempting especially during Christmas. If I wanted, I can see if I’ll get those shirts from the Quiksilver store or the gift card from Apple. 😉
While I am no expert on how a Gay couple can protect themselves in the event the relationship sours, I am an expert with respect to traditional marriage. Or as I like to call it…The business of love.

David, Thanks for the comment. I agree that there should be full disclosure before you get married. That’s also why when you are just “living” together, or whatever it should be fairly mixed, but not completely together. That way you can really see how each other spends money.

Once you are married, everything should be in one pot, etc. As you said.

My dad could log on and check the balances, etc if he knew how to do anything more then just play solitare on the computer! 🙂

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