Marriage income disparity - when a wife earns more

Marriage Income Disparity – When Wives Earn More

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Did you know that it’s becoming more common for the women to be the breadwinner in their household? In fact, nearly 50% of women are earning as much or more than their husbands according to TD Ameritrade’s Breadwinners SurveyTalk about a reversal of marriage income disparity.

Even with the results of the survey, it’s hard for me to count the number of mixed-gender couples I know where the woman makes substantially more. Maybe they just don’t talk about it?

Let’s not forget about the gender wage gap that exists between women and men. That being said, women breadwinners exist.

This is a post written by my dear friend Mrs. Miller of Millers on Fire. I love the fact that she earns more than her husband and that they make it work.  Personally, hubby makes more than me- this is our marriage income inequality.

But I know he would love to be in a position where I earned more than him.

As our FI plans constantly change and adapt, there was a point where he was going to stay home with our little one while I continued to work. We shared parental leave when she was born and he loved being home with her for 4 months.

But I realize that not every relationship is as open about money as ours is. So I really appreciate Mrs. Miller’s take on marriage income disparity, female breadwinners, and how to navigate these issues in your relationship.

Okay, back to Mrs. Miller.

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I earn twice as much as my husband

Recent conversations about income inequality and the wage gap prompted a conversation about wives who earn more than their husbands. Although it’s not typical, it’s becoming more common. There are interesting dynamics couples face when wives earn more than their husbands. 

The income disparity in our marriage is something we talked about early on in our marriage. In fact, we actually discussed it openly while we were dating. It was important to me that we were candid about our financial philosophies and positions.

When we began dating we shared costs. Sometimes he paid for dinner and other times I did. We split costs for high ticket activities like concerts or snowboarding. While planning for the wedding, we equally contributed to the wedding. He sold his stocks and I used money in my savings account.

Once married, we discussed our goals. I knew that splitting things evenly didn’t seem fair. Dividing household expenses based on income also wasn’t the right move for us. In the end, we pooled both of our incomes together in order to pay for expenses, save for our goals, and build wealth. 

Avoiding marriage income inequality pitfalls

When one spouse outearns the other, financial imbalance and income inequality can lead to difficult conversations if one person feels powerless. If one person in the relationship earns significantly less than the other, this can lead to tense conversations, marital issues, and possibly resentment if not addressed head-on. 

Neither spouse should feel insecure about their income. When the wife is the breadwinner it can bring particular feelings of self-awareness not just with her spouse but also from the outside.

Having honest conversations about money, financial goals and household responsibilities are key to avoiding common pitfalls.

Not being realistic about marriage income disparity

Conversations about money can be stressful and sometimes embarrassing. Nevertheless, these conversations are key to avoiding unrealistic financial expectations.

Rather than splitting living costs 50/50, I recommend couples consider dividing living expenses by percentages. 

For example, if rent is $1,500 and one spouse earns $4,000 and the other earns $2,000 splitting $1,500 in half, will leave the lower earning spouse with less for other financial obligations including saving for retirement. 

If one spouse brings home 25% of the household income, consider making their portion of the living expenses 25%. 

In the Miller household, we don’t divide living expenses that way. Instead, we have one pot of money. We prioritize maxing out our retirement accounts. Because we have a shared financial goal of financial independence, this allows us to grow our savings and investments faster. 

The merging of income may not be an option for you but find a fair system that will work and benefit each of you. 

Not talking about financial goals

When I first learned about the FI/RE journey it was obvious we had to make changes to the way we were spending and saving money. When I presented the idea of early retirement to my husband he was right on board. 

Who wouldn’t be interested in retiring before the age of 65?  

Once we had a clear goal in mind, we began to discuss the necessary changes we had to make in order to achieve early retirement. 

First, we had to decrease our discretionary spending, then we went full throttle on paying off our debt, and lastly, we had to increase our investing. 

Since we had a common goal it was easier to come up with joint ideas on how to reduce our expenses.  Neither one of us wanted to cut out all discretionary income. 

It was important for us to enjoy the journey to financial independence. I was willing to cut down on my clothes and shoe shopping and he was willing to reduce the amount he spent dining out. 

We both made sacrifices in order to reach a financial goal.  Whether your goal is to own a home, take month-long vacations each year, or finally own a Tesla Model X be sure not to leave your spouse behind. 

You don’t have to give up on your individual goal but discussing financial goals as a couple will deepen your partnership and accelerate making your family dreams come true. 

If you outearn your spouse, be careful not to give more weight to your financial goals. You may earn 70% of the income but decision making should be pretty close to 50/50. 

Not being transparent about your spending with your spouse

If you earn more money than your partner you may feel entitled to spend more money than your spouse. In fact, you may feel that you shouldn’t have to explain your purchases to your loved one. The truth is, this may foster feelings of resentment and cause distrust. 

Financial infidelity is betrayal. Financial secrecy can have huge impacts on a relationship. It’s important to have open dialogues about money to ensure you are on the same page about spending and purchases. 

Income disparity shouldn’t mean power imbalance

Be sure not to control your spouse’s spending. Marriage is about teamwork and compromise. According to the Breadwinners Survey, 32% of millennials believe that the more money you contribute to the relationship, the more say you should have over spending decisions. (Insert palm to forehead emoji here.)

Income disparity shouldn’t equate to a power imbalance. One of the pitfalls we avoid is not communicating openly about money. We make decisions together. 

My husband and I have the same amount of spending money each month. Like Maria, I hate what my husband spends his fun money on.

But in the end, it’s a way for each of us to use that money any way we want. Judgment free.

Sometimes, I will treat myself to a spa day but most of the time I just tuck that money away in my brokerage account. Although I have made my share of mistakes, I have learned the power of investing. 

Whatever amount discussed it should feel fair to both.  Although I earn more than my husband it didn’t feel fair to me to spend more than he did. 

Building wealth

Okay now this might be a tricky one for some. This is how we deal with wealth and the marriage income disparity. 

Those of us on the FIRE journey are saving and investing about 40% or more, of our income in order to quickly achieve financial independence and possibly retire from the traditional workforce early. The higher one’s savings rate, the faster you can achieve your goal. 

At the start of our FI/RE journey, I calculated that if we each contributed the maximum to our retirement accounts every year, we could invest about $61,000. According to my calculations, we would reach our FI number in about a decade.

However, if we invested more, we could accelerate our journey. 

Making the maximum contributions to retirement accounts was fairly easy for me as a high-income earner but it ate up a lot of my husband’s income. It would require most of his paycheck to go into a retirement account. 

I couldn’t contribute any more to tax-advantaged accounts and it made cents (see what I did there) for him to take advantage of the pre-tax savings rather than me investing into a brokerage account. 

After we’ve invested in our tax-advantaged accounts, I also contribute to an after-tax brokerage account. I have some individual stocks but most of my brokerage account is made up of index funds. 

Mr. Miller has the ability to work overtime and also earns a bonus. We agree that he use the majority of that money to fund his own taxable brokerage account. He prefers to pick stocks.  

Our investing styles are different.  This was a sticking point for us at the start. I prefer to invest in index funds and he prefers to actively invest. In the end we each get to do what feels most comfortable for us with our individual taxable brokerage accounts.

For the record, I’ve outperformed him 3 of the last 4 years! (Love ya babe!)

In closing

Our situation may not be typical. We shared costs pretty evenly while we were dating but once married it didn’t make sense to do that. 

Tackling debt, increasing savings, and contributing to both of our retirement accounts is important to us. 

Once we learned about a path to early retirement we drilled down on our financial goals and began mindfully investing in our future. We set a clear financial goal. The dream is to one day reach financial independence together and make work optional. 

I am the financial house manager and maintain the “Miller Family” spreadsheets. Although we do have separate investment accounts, we talk about our goals often. We have joint checking and savings accounts and make big financial decisions together. 

At the beginning of our marriage, we’d have financial meetings, but now everything is automated and very little changes. When there is a financial change or a goal needs updating we talk about it during a “State of the Union” check-in.

Simply, financial independence is our goal. We each have investing accounts in our own names and discretion over how we invest it but in the end, the accounts belong to both of us. It works for us.

In our household, there is marriage income disparity. I make twice as much as my husband does and we’re okay with that.

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12 thoughts on “Marriage Income Disparity – When Wives Earn More”

  1. I like your way better than figuring out how to apportion costs between two spouses. My wife earned half of what I did, she was a public school teacher, I was a chemical engineer. Later she became a stay at home mom. We considered every penny either of us made to be joint income. We combined all our accounts, except the retirement ones that can’t be combined. Even when I received a seven figure inheritance from my side of the family it immediately went into a joint account and became ours. To me marriage is a permanent partnership. If we did somehow split up then we’d each get half of everything and I’d know she had plenty of assets to live a great lifestyle, as would I. But for 42 years we’ve been solidly married and don’t have plans to change that! I did have female engineers working for me and in both cases their spouses were making much less, sometimes had trouble keeping jobs. They seemed to feel awkward at company functions since most of the males in attendance were high earners, but maybe it just seemed they felt that way.

    1. Steveark – I’m like you, we have always 100% combined our finances. And to be honest never really calculated how much more hubby made than me. He has always made more and that hasn’t bothered me. But he would be exstactic if I earned more than him but that just doesn’t happen in our chosen professions.

      I know how we manage our finances wouldn’t work for everyone, but it works for us and that’s all that matters.

      Happy to hear you method has worked for you and your wife for so long. Hopefully hubby and I make it to 42 years one day too.

  2. Great, encouraging piece. My husband and I have always combined our finances and it’s worked well for us. I handle our money and he’s very happy to avoid that task! I know it’s not the right arrangement for every couple but it’s kept things simple. I’m a SAHM but I think he would be fine if I made more than him. We look at the household income and that’s where we start with our spending plans. Thank you for sharing.

    1. Ana – I manage the money in our relationship too, hubby wants nothing to do with it. But we do talk about money a lot so that it very helpful.

      Happy to hear you found a system that works for you too.

  3. Thanks for the read! My parents were like you, combining everything into one pool of money and spending from that. Many years later, they’re now getting divorced. The experience I’m having with them now regarding arranging the division of property and assets makes me really wary of pooling everything together with a future partner!

    1. ChasingFIRE – you definitely need to find a system that works best for you.

      When I was in university I remember an older friend of mine telling me so make sure that things were in my name, not just my future partner’s. She was going through a divorce and everything had been in her husband’s name. She had no credit history which made things very tough. It was also easier for him to take advantage of her. So a bit of a cautionary tale there too.

      Hopefully, your parent’s affairs get sorted soon.

  4. Great post! I am about to move in with my boyfriend, and he is in a PhD program so making a LOT less than me. How to split costs has definitely been on my mind! We aren’t married or engaged, so he thinks we should split costs evenly. I mostly agree since he seems fine with it, he will catch up to me in earnings when he’s done with the program, and he was the one who wanted a nicer (more expensive) apartment! He is still paying less than he would for an apartment without me with roommates, so it works out. However, I do think that there are some costs I should pay more for. When we were doing long distance, we split the costs proportionally to our income, because those were relationship costs, not individual cost of living. He wants to pay half of the parking cost for my car, since he will use it some, but I’m not so sure about that (I usually pay insurance, maintenance, registration, gas, etc). My car feels like my financial responsibility, and I still want him to be able to have spending money on top of his living expenses. We came into the relationship with various furniture, and I feel like we might keep just buying pieces on our own as needed? E.g. his desk is his purchase, but I want a new couch so I will buy that.

    Obviously I still haven’t sorted it all out, but I’m confident that we can find something we are both comfortable with! I would love to hear more from non-married co-habitators on what has worked for them.

    1. Jess – my first thought is that maybe you will want to consider a co-habitation agreement of some kind. Although I never had one when I moved in with my then-boyfriend/now-husband, I have friends that have successfully used them.

      At the end of the day you will want to do what feels best for you both. And whatever you start with doesn’t mean that it can’t change as you get used to living together. It’s okay to be flexible and adapt.

  5. My wife and I do combined finances, and I couldn’t imagine doing it separate. In everything in life, the power of combining into a team is worth more than just double. By combining everything, we’re 100% together and working towards the same goals.

    When we first got married, I made about 50% more than my wife. I changed careers and started making 25% less, and recently my wife changed jobs and got a 250% pay increase(!!). I must say that I couldn’t be happier that my wife is making much more money than me.

    1. Kevin – I’m with you. We do all of our finances together and couldn’t imagine otherwise. But I realize that the combined method doesn’t work for every relationship.

      Congrats to your wife on the 250% pay raise – that is AMAZING. And I’m so happy to hear how happy you are that your wife earns more.

  6. We’ve been fortunate to have our incomes flip flop over time. Early on, she was still in grad school while I was working. Naturally, I was making more money.

    Eventually, she finished school with her PharmD and at least initially was ahead on the income ladder. I passed her sometime later as I found some success starting a business (or two).

    Over the last few years, things have flipped again as I’ve scaled back my work and started a form of semi-retirement. As she’s moved to part-time work this summer, we’re getting close to equal again.

    In all that time, I don’t think we’ve ever done a sort of “pro-rated” apportionment of the bills. But we’ve been fortunate: we’ve never really had to. At times, certainly, one of us might handle the larger, more lavish expenses (think travel or fancy dates). But for at least since we were in our careers, we’ve underspent our income so much that either of us could afford our lifestyle without trouble.

    I think that apportioning things exactly might remove some incentive (you make 70% of the income, you pay for 70% of the computer game I want to purchase) from either partner earning more money. It could cause some angst about one person paying more in absolute terms for particular purchases.

    Most importantly, partners need to do what works for them.

    1. Chris, you are absolutely right – partners need to do what works best for them. I always thought that when you were married all your finances were joint. Then I met more people in the personal finance space and learned my beliefs were not 100% accurate. There are so many different ways to manage money as a partnership.

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