A while ago the women over at Klunkerchen started a blogging carnival. The topic – “Money and Relationships” – really interests me because it applies directly to us. After all, we have money and we’re in a relationship! It’s taken us quite some time, but now our contribution is finally ready. Since the entire blogging carnival is in German, we thought it would be appropriate to write our contribution in German. But since not all of you read German, here are my words of wisdom in English too. Enjoy!
Do you have joint or separate accounts?
Both. We have joint accounts for our apartments. Since we bought them together it would be really complicated to manage them using separate accounts. We also have a joint current account for our shared day-to-day expenses. But we also each have our own current accounts for our personal expenses. (Mr. W has just as little interest in funding my book habit as I do in supporting his addiction to gadgets). We also have separate brokerage accounts. I’m quite conservative and prefer to stick my money in the MSCI World and forget about it. Mr. W on the other hand likes to invest in individual stocks in addition to his ETFs. It’s all a game to him, but he’s only allowed to play with his own money!
Have you agreed who’s allowed to spend how much money on what? What are your values here? Are you similar or is this an area in which opposites attract?
No, not really. But we’re both pretty frugal by nature and don’t have any expensive hobbies. So it’s never happened that one of us has spent a serious amount of money on something and then got into trouble with the other. We both feel that it’s possible to have loads of fun without spending a ton of money, so this area of our life together is pretty harmonious.
Do you earn different amounts of money and do you try to compensate for it? If so, how?
Yes! At the moment I’m not earning anything at all while Mr. W still has his active income from his consulting work and his (mostly) passive income from his website. He’s planning to stop consulting by the end of the year though. For a long time I had a problem with not earning any money anymore and with living off my husband, but I’ve got over that now. It’s not like I sit around all day not contributing anything to the family. Like I already said I don’t waste money on designer clothes or the latest iPhone. I work pretty hard for the family – I just don’t get paid for what I do.
We used to split everything 50:50 until I took a huge pay cut to have the kids. That meant I could no longer pay half of all our shared expenses. I also could no longer afford to pay half, but only a third of the down payments for the last two apartments we bought. But that was ok. Precisely by working less I enabled Mr. W to continue working full-time and to build up his website at the same time.
How are you going to provide for yourselves during retirement and have you put provisions in place in case you split up?
We’ve minimised our traditional pension coverage as much as possible. I’ll get a tiny state pension (as of December 1st 2050!). As an employee I legally had to pay pension contributions for about 10 years. I used to have a couple of other pension plans that I opened without really knowing what I was doing. Once I realized how useless they were I cancelled them and stashed the money in the MSCI World instead. Mr. W also opened one or two private pension plans when he was young and didn’t know any better. He wasn’t able to cancel them completely but at least he managed to stop paying into them.
Our apartments are our real pension. We have six of them. Even with the high rate of tax in Germany we’ll have enough rental income to be able to live very comfortably. Especially here in Romania where the cost of living is so low! (We have no personal allowance in Germany since our main tax residence is Romania.)
In the event that we split up, the purchase contracts for the apartments specify which of us owns how much of each apartment. So it’s a pretty clear cut thing. We haven’t made any special provisions for the eventuality that we split up. However, I can imagine that we’d just buy each other out of different apartments so that each of us would end up owning three whole apartments instead of six half apartments. But hopefully it won’t come to that!
And for everyone with kids: How do you manage this area? How do you compensate for the fact that one person has to work less or not at all because of the kids? Or will always be behind in their career because there was a period when their main focus was on the kids? On the other hand, it’s also interesting how the other person deals with the pressure of being the sole breadwinner. And are you insured for the eventuality that this person is no longer be able to earn money?
Like I said above, I don’t work at all anymore and Mr. W is currently winding down his consulting work. Career in itself isn’t important to us. I can’t imagine anything worse than spending 40 years trying to climb the corporate ladder. I’m just not that type of person, that’s not my world.
Instead, it’s important to me that my kids are happy and that they grow up to become good people. I also want to do something for my community that isn’t necessarily profitable but is nevertheless valuable. Lots of important things are simply not done because they wouldn’t bring in any money. But those are precisely the kind of things I enjoy doing now (like giving German lessons in a children’s home and organizing FI meetups where likeminded people can exchange ideas).
Now that we’re financially free, money doesn’t play as big a role in our lives any more. We don’t think about it all the time. Instead, we have the time and the freedom to enjoy our kids and to work on our own projects – both together and separately. That’s good for our relationship.