Five ways to stay on an equal financial footing if your spouse earns more than you

Sandhya Unni, 48, an entrepreneur in Dubai, set up a digital marketing company during the Covid-19 pandemic and earns significantly less than her husband, Unni Madhavan, 53, who has been running a business in the UAE for 11 years.

“My husband is the higher earner by a large margin. There is more than a 50 per cent difference in our incomes,” Ms Unni says. The couple have two children, a son, 23, who is at university in Canada, and a daughter aged 18.

Mr Madhavan calls the financial shots in the relationship because he earns more and takes the lead on big-ticket purchases such as buying a car, office or investing in property in their home country of India, Ms Unni adds.

“Although I nudge him on where to make investments, eventually the decision is his,” she says.

She takes care of household expenses, such as paying for their maid and groceries, while her husband foots the bill for major costs, including rent and the loan instalments for their respective offices in Dubai.

Only 20 per cent of couples participate equally in financial decisions, with 70 per cent of men taking the lead when it comes to long-term financial decisions, UBS found in its recent Own Your Worth report, which polled 1,500 couples.

Overwhelmingly, male respondents to the survey believe they know more about long-term finances than their spouses.

More than 80 per cent feel it is their responsibility as husbands to make long-term financial decisions for the household, while 70 per cent do not trust their spouse to make good decisions, the survey found.

But there is good news. Among men who take the lead, nine in 10 wish their spouse was more involved in long-term financial decisions. More than eight in 10 believe including women in financial planning and investment briefings would increase their engagement.

In the past, Ms Unni says she and her husband experienced tension in their relationship because of the difference in their incomes. However, they have since overcome this difficulty.

In 2006, for instance, she was keen to buy an apartment in India, while her husband was against it. However, he eventually agreed to the purchase “but it is sort of a sore thumb that still sticks out”, she says.

“I would have bought the property single-handedly if I had the money, but my income at that point did not allow me to,” says Ms Unni.

Then in 2010, Mr Madhavan invested in land in India, even though his wife was not keen on the decision. He went ahead with the investment because he had sufficient funds to do so, Ms Unni says.

“He is the authority on all major financial matters in the family," she says. "Although it has come to a point where I do not need to rely on him, there are, however, times I wish I did not have to ask him before spending because that is an old-school way of thinking.”

Although the couple have separate bank accounts in the UAE, they have given each other power of attorney. However, they hold joint accounts for their investments in India.

Meanwhile, Sineesh Vasudevan, 32, an Indian branch manager in the UAE's retail industry, admits to earning between 25 and 30 per cent more than his wife, Rahi, 27, a customer service executive in the logistics sector.

“I am in charge of paying our house rent, utilities, groceries and other miscellaneous expenses," Mr Vasudevan says. "I rarely use my wife’s salary.

“She usually uses her salary for social expenses, date nights, adventure activities and holidays.”

The couple, who have been in Dubai for three years, have separate bank accounts and no financial commitments back home, so they set aside 30 to 40 per cent of their salaries every month for savings, gold investments or holiday expenses.

“My wife does not need my permission to spend because she is financially independent," says Mr Vasudevan. "It is a great support if your partner is working because it offers you a financial safety net.”

He once used up his entire salary before the month was over because he had to pay for driving lessons. However, his wife stepped in and paid for the remainder of their expenses that month, he points out.

“We are financial partners as well. She supported me when I was unemployed for three months,” Mr Vasudevan says, adding that he is a spender and his wife is a saver.

The National spoke to personal finance experts on how couples can remain financial equals when one partner earns less than the other.

Communication is key

Do not hide what you earn from your partner. That includes underestimating or exaggerating what your income is, says Carol Glynn, founder of Conscious Finance Coaching.

“Be honest and sensitive," she says. "Many of my female clients fear their partner will not be comfortable with the fact that they, as a woman, out-earn them."

It is always important to be open and honest about your finances as a couple. However, some people can find it hard to discuss money, which can cause tension in the relationship, according to Georgina Howard, a chartered financial planner at The Fry Group.

“It is good to find a common ground and start somewhere when the time is right, otherwise this can cause money inequality," says Ms Howard. "Full financial disclosure will aid a healthy relationship and being honest about how different scenarios make you feel.”

Divide household finances

Couples need to decide how the household finances will be divided.

A common way is to apportion costs based on income. “For example, if the income split is 30:70, then the household expenses are split 30:70,” Ms Glynn says.

However, communication is important – both parties must feel heard and know their opinion is taken into account in the financial decisions, she says.

Joint account vs separate accounts

If spouses cannot make equal contributions towards family expenses, it may be best to open a joint budget account, finance experts recommend.

You each pay into the account the agreed amount and that is where all the spending is paid from, taking care of household bills, rent, food or dining out at expensive restaurants, Ms Howard says.

“Even though you may pay different amounts, you feel equal. Review this regularly to ensure there is enough money each month to cover the spending and adjust accordingly to see if it is working for each party, otherwise this could build up and money problems are one of the biggest reasons for divorce,” she says.

Meanwhile, some couples prefer to maintain separate finances. In such situations, they should, however, discuss some shared responsibilities.

“For example, if you buy a property or have children together, you will need to consider how this [affects] you financially," Ms Howard says. "Taking time out on maternity or paternity leave and living on a reduced income, the cost of childcare or someone staying at home and giving up their career to bring up the children is equally as important as earning the money.”

Be sensitive towards your partner

When one person in a relationship earns more than their spouse, this can sometimes make the one earning less feel insecure because they cannot contribute at the same level, Ms Glynn explains.

“Make all financial decisions together," she says. "It is not a good idea to allow one person in a relationship to make all the financial decisions. It is important that both partners feel valued and their opinion counts regardless of income levels.”

Experts also recommend consulting with a qualified financial adviser who can help couples budget and save together.

“A financial adviser should be an impartial figure," Ms Howard says. "Ensure you choose a qualified financial planner who has both your best interests at heart.”

Avoid financial cheating

When one person earns more than the other, this could cause spending concealment from either party. The partner who earns less may, in some cases, cover up their spending, while the partner earning more may not want to flaunt purchases.

“Creating a budget early on can bring these areas into discussion. A strong budgeting position will reduce concerns about how money is being spent by both people,” Ms Howard says.