According to a recent study by Fidelity, 43% of couples don’t know how much their partner earns.
“While the majority of couples (72%) say they communicate exceptionally or very well, more than four in 10 (43%) failed to correctly identify how much their partner makes.”
I’m not 100% of the wording of the question that generated Fidelity’s result, but I’m pretty sure that I’d count us among the 43%.
But unlike the undercurrent in Fidelity’s report (that this is a sign that we’re not on the same page financially and will impact our expectations and preparations for retirement), being in the 43% on this doesn’t really concern us. We genuinely don’t think the lack of insight into our spouse’s earnings is indicative of us not being on the same page financially in the least. And we don’t think it should be for most people.
So About That Wording…
If the question is forward looking, asking what our spouse will earn in this year, I can guarantee that Mr PoP couldn’t tell you what I will earn this year, nor could I tell you what Mr PoP will earn this year. Bonuses, commissions, non-cash compensation… all of these things end up impacting our gross income most years and neither of us really care enough to want to forecast (or worry) about these issues.
And if Fidelity’s question is backward looking, other than holding up our W-2s when they come in and taking a mental note of who won the “Battle of the Sexes Paycheck Edition” that year (a result I often don’t even share with Mr PoP since he cares even less than I do – which is tough to do since I don’t care all that much about who makes more), we don’t think about our gross income all that much (I always have to refer back to our W-2s or taxes to fill out our yearly shareholder letter) and we certainly don’t think about our spouse’s gross income.
What’s Yours Is Mine And What’s Mine Is Mine
Thinking about what each of us earns isn’t really how our relationship is wired. We often joke that “What’s yours is mine and what’s mine is mine”, but the reality is that everything we earn goes in to one big pot that we truly think of as “ours”. Legally we have individual 401Ks and individual Roth IRAs, but whenever we’re looking at those balances we look at them combined. Thinking about assets in a divided manner just isn’t the way we’ve organized our financial life, so why would we think about income in a divided manner?
Even on a combined basis, though, we really don’t pay all that much attention to income, especially gross income.
Income? How About Spending?
You see, from our point of view, keeping close tabs on your income only matters when you’re spending most (or all, or >all) of it. We don’t base our spending on our income. Those 50/30/20 and other percentage based budgeting plans always seemed like a load of cr@p to me since we’ve had hugely varied incomes over the course of our marriage, and varying our spending based on that income never seemed to make a whole lot of sense. Instead, our spending is based on our wants and our needs. And we do track our spending diligently. As long as our income is high enough to take care of those wants and needs (and I’d put saving for our future at a healthy clip into both of those categories), we’re not going to think about the exact income number a whole lot.
So to Fidelity, I say we’re proudly in the 43% that don’t know their spouse’s income. And we’re pretty happy with that.
What about you? Are you in the 43%?