Author Topic: Implications of partnerships with different sized mustaches?  (Read 7384 times)

highwayskies

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Implications of partnerships with different sized mustaches?
« on: March 13, 2014, 07:57:22 AM »
I just read a post from someone who represents a now-single-income partnership, and it reminded me of my own situation with my wife, leaving questions...

I've crunched a lot of numbers (which I'd be willing to share if it helps) and it seems that it's possible for me to pay down the mortgage on a 2-family house I own, the rent from which will more than meet our needs once owned free and clear, in about 2020.  I say "our" needs, because I've totaled our collective annual spending, and we're both able to be covered by this rental income (of mine).  My wife wants to contribute as well, however, and is making all the right decisions alongside me to work her mustache too.  She has mentioned she didn't want me covering everything, but her "on paper" FI date is lamentably far away.   

Our collective annual spending: $33k (and this is living with a parent to keep costs super low)
Monthly requirement: $2750
Rental income: $2600 + $750 from other property = $3350

Her net worth: -$40k (school loans)
Her income: $28k pre-tax

For us to contribute evenly, she'll have to work and I won't (have to, but will, surely).  This seems unfair to both of us, but is that just "life?" 

In a way, it's fun to plan with her how to really sack away money, and get a savings growing "from scratch," as if starting over again myself with better knowledge, but I see her frustration side-by-side with me, much closer to FI (though, admittedly, I've been working on retirement through RE for a long time).

I'm not entirely sure my question is financial, or marital!  Does anyone else here have very different situations with their significant other who wants to contribute as well?  How do you handle it, whether in FI or on the way?

Spork

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Re: Implications of partnerships with different sized mustaches?
« Reply #1 on: March 13, 2014, 08:07:28 AM »

Bottom line is: whatever you both agree on is fine.  It doesn't have to be 50-50.  Some types of jobs pay more than others.  Some jobs don't pay at all (and still provide a lot of value to you both).  It's not a competition.  It's not a race. 

There are tons of ways someone can contribute other than salary.  All you have to contribute is value. 

I personally think it works out best if everyone in the partnership thinks all of the money is "ours."  (And, the state I live in will back me up legally... whether that matters or not.)  I've tried it both ways.  The "yours and mine" ended in divorce.

Spork

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Re: Implications of partnerships with different sized mustaches?
« Reply #2 on: March 13, 2014, 08:16:24 AM »
What does your wife feel she brings to the family? I make less than my husband, but I think I add a lot of value in terms of running our lives, planning the investments, doing all the housework, keeping everything running because he works 80 hours a week, etc. Does your wife feel she needs to be making money to be a valuable member of the family?

This is exactly what I was trying to say with "There are tons of ways someone can contribute other than salary.  All you have to contribute is value."  My wife is an awesome cook.  She does TONS more around the house than I do.  She manages our money in a way that has historically been extremely successful.  She grows lots of veggies...  The list goes on.... 

bogart

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Re: Implications of partnerships with different sized mustaches?
« Reply #3 on: March 13, 2014, 08:44:50 AM »
When my husband and I married, we brought about equal annual incomes to the partnership, and the following assets/debts:

Me:  assets:  paid-for vehicle, $8K in 401K; debts:  0
Him:  assets:  2 teenagers; 1 home; $10K in 401K; vested in pension system (not yet eligible, but an accessible resource down the road); debts:  $12K in CC debt, home financed 90% LTV and needed work (new roof, assorted other); impending college costs.

We replaced the roof ourselves, paid off the CCs, kept saving for retirement (mostly mine; he's largely relied on his pension plan), and paid to put the kids through school and find their way to financial independence -- a long process for one involving issues like pre-existing health condition and difficulty getting affordable health insurance (we made sure she always had health insurance).

By the time DH qualified to RE within his pension plan, our incomes had each increased, his by about 80% of baseline and mine by about 110% (so enough that my higher earnings were noticeable, though not vast).  Now that he's retired, his income is about 30% of our household total (mine provides the other 70).  We have a young child (and a (step)grandchild on the way :) !), and when I posted on a different board the other day about who takes care of your kid when school's closed, I used the word "priceless" to describe DH's availabity to do that 3 times in 2 paragraphs.

As my mother grows older, I look at whether we want to organize our home/lives so that she can live with us, either temporarily but long-term (e.g. for several months if she needs to recover from a health crisis), or full-time.  DH's parents are deceased, so if we decide to take on this responsibility, it will be on behalf of my side of the family, not his.

I have always understood DH and I to be a team working toward shared goals of various flavors, certainly including but far from limited to FI.  Obviously in our case a lot of that has involved caring for and providing for kids, and I don't know if kids are part of your household or whether you want them to be -- or whether you can envision yourselves caring for aging parents. 

To summarize:  For me personally, I cannot imagine limiting my understanding of what DH and I each contribute to (or cost) our household, either now or looking at the longer term, to our financial inputs/outflows.

amyable

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Re: Implications of partnerships with different sized mustaches?
« Reply #4 on: March 13, 2014, 08:54:19 AM »
Financially, my husband and I operate as one big person instead of as two individuals. We have one life and lifestyle together. Thus all income is our income, all debt is our debt, and all assets are our assets.

This is how we treat it, but I think anything is fine if you're both OK with it.

When we first got married, I owned my car and had about $15K in the bank with no debt.  My husband had about $60k in student loan debt, which we've just started to pay off aggressively these past two years.  He made a lot of mistakes early in life, but he had it a lot harder than I did. 

I have no desire to retire early, so it's entirely possible he'll retire before me. 

highwayskies

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Re: Implications of partnerships with different sized mustaches?
« Reply #5 on: March 13, 2014, 09:12:46 AM »
I'm down for us to retire together on the fruits of what has historically been assets of mine.  I suppose what I'm addressing is her want to contribute combined with (or versus) her desire to work. 

She loves her field and wants to work, so isn't exactly dying to be "out of the rat race."  She's also in school (finishing in May).  At present, I own my own business, totally control my hours, and have lots more free time than she does.  In this free time that I have and she doesn't, I take on home, dog (no kids yet, but headed in that direction), financial, etc responsibilities.  In this phase of our lives, I'm pulling extra weight while she finishes school, which I'm very happy to do!  I don't think the feeling of unevenness is one she's comfortable with.

Similarly, looking forward, if one is working and the other not because of FI, the one with all the time will be able to contribute even more (finances, child-rearing, gardening).  I could foresee a possible scenario in which I'm FI (at which time I'll be the main source of income and simultaneously the stay-at-home dad) and she is working (because she likes it, and to feel like she's contributing), meanwhile feeling like she's not contributing meaningfully enough, financially or at home. 

Maybe the question is how to get her started in RE, or somewhere where her money works for her, freeing her time as well.
« Last Edit: March 13, 2014, 09:21:31 AM by highwayskies »

Spork

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Re: Implications of partnerships with different sized mustaches?
« Reply #6 on: March 13, 2014, 09:23:44 AM »

Maybe the question is how to get her started in RE, or somewhere where her money works for her, freeing her time as well.

She may just fall into it when she sees you getting extra time to do the things you want: gardening, child rearing, etc.

...or she may want to work forever.  Some people do.  My dad still works at 84.  He doesn't have to and works at a loss because he likes it and because he can.  I think he'd shrivel up and die if he didn't. 

Prairie Stash

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Re: Implications of partnerships with different sized mustaches?
« Reply #7 on: March 13, 2014, 10:06:59 AM »
When you RE do you envision spending your time alone? If you did, why did you get married?

When I reach FI I plan on travelling and spending time with my wife.  That's my goal, achieve FI so I can spend time with her.  I don't care about FI, its the part after that's important.

gobius

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Re: Implications of partnerships with different sized mustaches?
« Reply #8 on: March 13, 2014, 11:02:45 AM »
When you RE do you envision spending your time alone? If you did, why did you get married?


I suppose he could work more so they both hit FI sooner, but plenty of people retire before the other spouse.  Sure, if he plans to travel like you then it would make sense to wait, but if not I don't see why he couldn't retire first and perhaps find a side job to help her get there sooner.  Or do whatever he wants.

Prairie Stash

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Re: Implications of partnerships with different sized mustaches?
« Reply #9 on: March 13, 2014, 11:59:26 AM »

[/quote]

I suppose he could work more so they both hit FI sooner, but plenty of people retire before the other spouse.  Sure, if he plans to travel like you then it would make sense to wait, but if not I don't see why he couldn't retire first and perhaps find a side job to help her get there sooner.  Or do whatever he wants.
[/quote]
Well the OP said he would keep working, that's not open for assumptions then.  I took it as a rationalization question, is it fair to contribute unequally (since he'll spend more of his time working)? My thought is it's fair because you're working towards your ideal situation which includes the other person.  It might not be everyone's ideal, that's cool. 

I'm pretty sure everyone realizes they can do whatever they want.  My opinion was meant to add the basis for my perspective, so he can empathize with my response (not blindly follow). Substitute your own goals for FI, travel is just a metaphor similar to when people ask you for coffee, you can always choose tea or something else.

gobius

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Re: Implications of partnerships with different sized mustaches?
« Reply #10 on: March 13, 2014, 12:34:12 PM »

For us to contribute evenly, she'll have to work and I won't (have to, but will, surely).  This seems unfair to both of us, but is that just "life?" 

In a way, it's fun to plan with her how to really sack away money, and get a savings growing "from scratch," as if starting over again myself with better knowledge, but I see her frustration side-by-side with me, much closer to FI (though, admittedly, I've been working on retirement through RE for a long time).

I'm not entirely sure my question is financial, or marital!  Does anyone else here have very different situations with their significant other who wants to contribute as well?  How do you handle it, whether in FI or on the way?

I guess I don't know enough of your situation to know if it's fair.  From what you wrote, I would say so since you have been planning longer than she has.  However, "fair" isn't always "what makes everyone the happiest".

My situation is probably similar to yours (I make 2x as much, have more assets).  I had to support myself a lot more too (I paid for my own stuff since high school, including my STEM degree, while her parents helped her through college and still do sometimes).  If I am able to FIRE first, I will probably leave my career and find something new at lower pay, then perhaps help her on the path to FIRE, but I will likely not extend my current career so we both reach FIRE at the same time.  Granted, I am not as passionate about my job as my fiancee is about hers and I wouldn't do a lot of traveling until she was done.  I would still contribute my half of expenses (I pay 2/3 now) and would take over all household duties if I didn't work FT (we split them now).

YMMV of course.  Things may change and she may start making more than me, and if she had the chance to FIRE first while paying her half of the bills, I wouldn't begrudge her for it.  In fact, I would cheer her for it and let it motivate me even more.  We don't have kids, though, and keep our finances separate.

gobius

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Re: Implications of partnerships with different sized mustaches?
« Reply #11 on: March 13, 2014, 12:52:08 PM »


I suppose he could work more so they both hit FI sooner, but plenty of people retire before the other spouse.  Sure, if he plans to travel like you then it would make sense to wait, but if not I don't see why he couldn't retire first and perhaps find a side job to help her get there sooner.  Or do whatever he wants.
[/quote]
Well the OP said he would keep working, that's not open for assumptions then.  I took it as a rationalization question, is it fair to contribute unequally (since he'll spend more of his time working)? My thought is it's fair because you're working towards your ideal situation which includes the other person.  It might not be everyone's ideal, that's cool. 

I'm pretty sure everyone realizes they can do whatever they want.  My opinion was meant to add the basis for my perspective, so he can empathize with my response (not blindly follow). Substitute your own goals for FI, travel is just a metaphor similar to when people ask you for coffee, you can always choose tea or something else.
[/quote]

I gotcha now.

I may have misunderstood him then.  I thought they were saying it was unfair that he didn't have to work but she did.  If I read what you wrote correctly, they think it is unfair that he has to work more to make them both financially independent (pulling more than his own weight financially).  Based on context you are probably right, and your response makes more sense now.  I suppose I would find it unfair, but if I were in his situation and liked my job enough I would probably do it.  In my current situation I would probably quit my job, then perhaps find something new and help her reach it quicker and give myself something different to try.

AccidentalMiser

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Re: Implications of partnerships with different sized mustaches?
« Reply #12 on: March 13, 2014, 01:12:19 PM »
I could foresee a possible scenario in which I'm FI (at which time I'll be the main source of income and simultaneously the stay-at-home dad) and she is working (because she likes it, and to feel like she's contributing), meanwhile feeling like she's not contributing meaningfully enough, financially or at home. 

Maybe I've just been married too long, but this is a somewhat foreign concept to me.  Please don't be offended, I'm just thinking "out loud".

Everything in life can't be put in a ledger.  I cannot even conceive of viewing our life as "her 'stache" and "my 'stache".  We work together and decide together about life issues like working and money.

I understand that couples have radically different views of working, money and contribution.  Is this an issue you've discussed with her or are you also just thinking "out loud" here?

highwayskies

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Re: Implications of partnerships with different sized mustaches?
« Reply #13 on: March 14, 2014, 08:42:02 PM »
"When you RE do you envision spending your time alone? If you did, why did you get married?"

I envision time together!  Relationships and experiences are the whole point of life, and, for me, the entire motivation to RE.

"fair" isn't always "what makes everyone the happiest"

Very real way of thinking of things, and totally true.

"Everything in life can't be put in a ledger."

Great outlook, and I wholeheartedly agree!  My wife got into some debt issues early on, and is working her way back.  Meanwhile, I had good fortune, good credit and investments, and support from family in ways she didn't.  I have ended up in a very comfortable place (my own boss, control my own schedule, etc).  I'm excited to benefit together from the good position we can now be in together.  In weaker moments, though, this is guilt- and envy-producing for her, and it's something we deal with.  This is the very real, human, response I am curious about how others handle.

"In a marriage, it's not yours/mine, it's ours..."

Cool, I'm ready.  We're newlyweds.  I'm sure over time you've all come to master this, but I invite us to talk about the moments it's hard and hurts (on either end) (if you can remember them)?

AccidentalMiser

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Re: Implications of partnerships with different sized mustaches?
« Reply #14 on: March 15, 2014, 07:13:44 AM »

Cool, I'm ready.  We're newlyweds.  I'm sure over time you've all come to master this, but I invite us to talk about the moments it's hard and hurts (on either end) (if you can remember them)?

Just keep talking to each other and best of luck to you.  The key to happiness is managing and communicating expectations.


Emilyngh

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Re: Implications of partnerships with different sized mustaches?
« Reply #15 on: March 15, 2014, 07:29:38 AM »
It's not clear to me why the two of you have to contribute evenly?

If I thought about my sitch like how you seem to think about yours (each person saving out of their own earnings and basing their retirement on when they can support their half of the bills on their savings), I would be able to retire  in my 30s (possibly in just a year or two) and my dh wouldn't be able to retire until he's in his 60s.   

When I met my dh he had no savings, had a hefty child support obligation, and student loan debt.   He also had a decent middle class income, but has since quit his job to stay at home with our daughter, so he has no income.

But, we have always thought of our finances as joint.   So, we will both reach FI at the exact same time.   And in reality, there's a decent chance he may never go back to work and effectively have a life very close to those who are retired as soon as DD is in school FT in a couple of years.   So although "his" share of net assets/income are actually way lower than mine, odds are actually he'll probably be living a "retired" style of life before I will be.

Emilyngh

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Re: Implications of partnerships with different sized mustaches?
« Reply #16 on: March 15, 2014, 07:35:37 AM »


Maybe the question is how to get her started in RE, or somewhere where her money works for her, freeing her time as well.

I don't understand why this would matter?   You said she likes her job and wants to work.   If this stays the same, then why should she RE?   And if the point is to have the $ to RE if this changes, why does it matter if this money is from "your" or "her" earnings?    If you have enough as a couple to RE then she's still free, no?   

GetSmart

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Re: Implications of partnerships with different sized mustaches?
« Reply #17 on: March 15, 2014, 08:32:27 AM »
"Everything in life can't be put in a ledger.  I cannot even conceive of viewing our life as "her 'stache" and "my 'stache".  We work together and decide together about life issues like working and money."

^ ^ I agree with this wholeheartedly.  It's difficult not to think of "yours, mine and ours" when you're just starting out because you only had to think of yourself until now.  It will be become much easier and more blended as you get older.

I'd be wary of the 50/50 thing.  Years ago a friend was in that situation, where her husband made 3x her salary yet they split all expenses 50/50.  That marriage did not last long and he walked away with 2/3 of his salary and she had zero.  I see the same thing happening now - the 50/50 split - with a young couple I know.  I think it's a recipe for disaster.

It might make you feel better to split things by percentage of income - this might be a Suzie Orman thing I can't remember.  Or perhaps she contributes everything she makes now to pay off her student loans and you float the rest until she catches up.

Caoineag

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Re: Implications of partnerships with different sized mustaches?
« Reply #18 on: March 15, 2014, 08:38:22 AM »
...
Cool, I'm ready.  We're newlyweds.  I'm sure over time you've all come to master this, but I invite us to talk about the moments it's hard and hurts (on either end) (if you can remember them)?

Ah the newlywed phase. It does take awhile to go from yours and mine to ours.  We were slow learners (okay, okay, I was the slow learner). I think it took us at least 5 years to fully merge our finances and run it as 1 big person instead of as two separate individuals. When we realized that running everything together was way more efficient and better at displaying the big picture, we finally converted over. As we are now in year 10 of our marriage, we can't even imagine trying to do it the other way now.

So I guess that means I was in the position your wife is in now. I was a bit envious of his head start (his family helped him start out, I paid for everything myself, etc) in life and really didn't want to drag him down with my debt but in the long run, I realized that it was a partnership and we would sink or swim together.

gobius

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Re: Implications of partnerships with different sized mustaches?
« Reply #19 on: March 15, 2014, 07:53:26 PM »

^ ^ I agree with this wholeheartedly.  It's difficult not to think of "yours, mine and ours" when you're just starting out because you only had to think of yourself until now.  It will be become much easier and more blended as you get older.

I'd be wary of the 50/50 thing.  Years ago a friend was in that situation, where her husband made 3x her salary yet they split all expenses 50/50.  That marriage did not last long and he walked away with 2/3 of his salary and she had zero.  I see the same thing happening now - the 50/50 split - with a young couple I know.  I think it's a recipe for disaster.

It might make you feel better to split things by percentage of income - this might be a Suzie Orman thing I can't remember.  Or perhaps she contributes everything she makes now to pay off her student loans and you float the rest until she catches up.

Doesn't the ERE guy split expenses 50/50 with his wife?  I think he even recommends it.  It seems to work well for him as far as I know (granted I haven't seen recent stuff by him).  I've seen a lot of people who got divorced, and none of them had split expenses (or at least never mentioned it being a reason for the divorce).  In fact some have gotten screwed because the other one took money from the shared account before ditching.

I'll admit that I still see things as "mine" and "hers" and for anything that we share we split costs (currently it's based on income but now that she is getting a better job it will probably be 50/50).  I don't keep a ledger or anything and our expenses are low enough that each of us can easily afford our portions of the expenses.  If we have kids (or perhaps even after a few years of marriage if we don't) we will combine everything, but I'm not comfortable with it right now.  I may be more risk-averse than most and don't blame others for combining. 

In a few years I may be one of those saying I don't see why we didn't combine earlier.  However, we are both happy with separate now.  Partially it's because I have a goal for ER and she hasn't until very recently.  I think that's part of why Jacob of ERE split expenses.

MKinVA

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Re: Implications of partnerships with different sized mustaches?
« Reply #20 on: March 15, 2014, 08:14:21 PM »
It will work out the way it works out. Things change over time in life and sometimes I'm paying more and sometimes he is. For instance, if you retire early, do you really want to start liquidating investments when it might be smarter to let them grow and live off her income for a while. Most couples I know where both have income split various bills relative to income (I pay the utilities, you pay the mortgage; I buy the family's clothing, school supplies, school fees, you pay for vacations). What is really important is that you both feel responsible for each other and will take care of each other no matter what. That's where you need to get to. Once there, who pays for what isn't important anymore.

Weyfarere

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Re: Implications of partnerships with different sized mustaches?
« Reply #21 on: March 15, 2014, 08:27:16 PM »
"In a marriage, it's not yours/mine, it's ours..."

Cool, I'm ready.  We're newlyweds.  I'm sure over time you've all come to master this, but I invite us to talk about the moments it's hard and hurts (on either end) (if you can remember them)?

I've been married seven months. One of us had some debt; the other didn't. We knew ahead of time we would combine finances; that decision wasn't difficult. Soon after marriage, we put each other's names on all bank/brokerage accounts other than IRA/401(k). So, once we decided *our* debt should go away, we threw our combined resources at the debt and made it happen. We still have friction sometimes over different degrees of debt aversion, etc., but I'm not aware of any envy or resentment over one of us starting "ahead" of the other.

RobertBirnie

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Re: Implications of partnerships with different sized mustaches?
« Reply #22 on: March 15, 2014, 11:58:00 PM »
"In a marriage, it's not yours/mine, it's ours..."

Cool, I'm ready.  We're newlyweds.  I'm sure over time you've all come to master this, but I invite us to talk about the moments it's hard and hurts (on either end) (if you can remember them)?

Financially, my husband and I operate as one big person instead of as two individuals. We have one life and lifestyle together. Thus all income is our income, all debt is our debt, and all assets are our assets.

When we first got married it was our goal to do the one big person idea but at the time I hadn't completed college 100% and needed one good year to finish it where I wasn't working. This was pretty hard on our relationship, as my wife had been working a few years at that point and had issues dealing with the college lifestyle of interrupted evenings due to homework plus the fact that she essentially married a bum. Now that the time is past we're back to the one big person ideal, its 'our' student loans now and 'our' income. She's a teacher and I'm a programmer, so I think she's made a dividend on her initial investment. We both work 40 hours and don't compare pay-stubs. We only have one FIRE date.

I think you have to be careful of "contribute in other ways". Although its true that people can, and I know a stay at home mom does more in a day than I do at work. But I don't like the idea that one person's time should be seen as more valuable and the other has to do extra to make up some how. There needs to be something more equal sounding.

kaetana

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Re: Implications of partnerships with different sized mustaches?
« Reply #23 on: March 16, 2014, 02:28:05 AM »
My personal view is that it doesn't matter so much HOW money is split or not split between the two of you; it's more about making sure you've discussed WHY and that you're both on the same page.

In my marriage, my significantly older husband makes much more than I do, but you wouldn't know it because all the money we earn belongs to both of us. He has access to everything I do, although due to our differing individual strengths, I do the day-to-day management. I am the mustache-grower and he just follows my lead in most things, although he knows he can always bring up something he doesn't like. That's something we discussed at the beginning and several more times after marriage, and we're both very comfortable with the situation.

However, I know other couples who do it differently: one friend does a 50/50 split, and my aunt and uncle do a proportionate split according to their income. And it works for them! No way is universally "better". You just have to talk to your wife and figure it out for yourselves.

highwayskies

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Re: Implications of partnerships with different sized mustaches?
« Reply #24 on: March 16, 2014, 06:51:48 AM »
Love where the conversation has gone; thanks all, for sharing, and for advice!