There’s no doubt prenups have a bit of a scary connotation. We often hear about them in the context of big high-profile divorces, like that of Amazon founder Jeff Bezos and his wife of 25 years, MacKenzie Bezos. Planning for the worst time of our lives when we’re often at one of the best can also often leave us feeling conflicted.
But the reality is, money is the number one cause of divorce in Australia, according to Relationships Australia. And ignoring the ‘money chat’ only makes it worse, with two out of three couples who avoid talking about money arguing about it instead.
Prenups aren’t for everyone. But figuring out how to talk about money early on in your relationship can help you avoid the need for it too.
Mamamia spoke to five people who are engaged or married about how they organised their finances with their partners before their wedding and whether they considered a prenup or a different financial agreement.
Here’s what they had to say:
Janine
“My partner and I combined our bank accounts as it was the best way to save for a property and get the best interest on our savings.
“We have always said that if anything happens between us we will go 50/50 – we don’t have that in an official document but we both know each other and know we would keep that true no matter what – no nasties.
“It also helps that neither of us will inherit billions, so didn’t need to worry about a prenup.”
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My (now) husband and I bought a house together when we’d been together less than a year. At the time we were both acutely aware that it was early and considered a prenup, but it was $1500 minimum, so we decided on an personally agreed plan instead.
I (the female) had a higher salary, and also had the deposit saved, so we decided that if it didn’t work out, we would sell the property, I’d take my deposit and we’d split the profit 60/40 my way as I was putting in a higher proportion of the repayments.
10 years on, we never needed that contingency plan. But if we split now, it would be about what is the most equitable situation, with the kids needs at the absolute forefront.
How does financial abuse start?
I imagine for some people it starts after they get married and agree to keep some of their own wages in their own account to spend how they like.
This is a fair and reasonable system when both earn similar amounts of money. However, if one stops earning money then they become financially dependent. Implicitly, they have to ask their partner to pay all the expenses for both of them. Most people accept that they don't want their partner to go hungry or to kick them out because they can't pay their share of the rent/mortgage. However, it gets trickier when it comes to discretionary spending. The primary breadwinner will also be asked to pay for their partner's clothes, hobbies, grooming, etc. The primary breadwinner's wage has not increased to cover their new financial responsibilities. It all comes out of their discretionary income and they start feeling resentful and suspicious that they earn all the money, and spend relatively little of it.
Now put in reality. Women are the most likely to reduce their income and future earning capacity by having children and/or taking on extra caring responsibilities. Women are also most likely to be financially abused.
For example, some men genuinely believe that it's fair that they give half their wages to their dependent spouse: she pays all the bills with her half, whilst he spends his on his normal recreational activities. Sometimes the split is 60:40 or 70:30, but whatever the split only she is required to pay the bills with her portion. Soon she's in the unenviable position of having to beg or explain why she needs extra money at Christmas and the start of the school year.
I suggest married couples start as they mean to continue. For better, for worse, in sickness and in health, the wages are pooled and both have equal access and responsibility for spending it for the benefit of the household. There is little 'my' money, and lots of 'our' money. Shared financial priorities reduce the conflict, but avoiding conflict by maintaining your own account doesn't help in the long term.
In short, I think it's a bit sad if you can't trust your partner financially. If both parties don't want to pool the money, then maybe there's a problem.
I totally agree. Far too often when I see couples who are having relationship problems, or people who have just come out of a relationship split, the phrase 'my money' shows up. And yes, it's usually the male partner, since more often than not, the female partner has stopped paid work to care for children, or is working reduced hours.
When faced with this, I often ask that partner to calculate how much it would cost them if they had to pay someone to care for their children and house every week. Sometimes we calculate it. It makes a mockery of the phrase 'my money'.