The financial practices and
perceptions behind separate systems
of household financial management
Dr Katherine Ashby,
Faculty of Law and Social Sciences,
SOAS, University of London.
Overview

Why investigate money management

Money management of cohabiting couples

Qualitative findings

Survey study findings

Conclusions

Directions for future research
Why investigate the household financial
management of unmarried cohabitants?

25% of all unmarried heterosexuals in the UK aged
16-59 yrs were cohabiting in 2002 (National
Statistics, 2004)

Current policy debates surrounding the legal
financial rights and obligations of cohabitants

How money management fits in

Stack versus Dowden (2007)
Money management of cohabiting
couples

Cohabitants are more likely to use separate systems
of money management (Elizabeth, 2001; Vogler,
2005).

Independent management - no joint sources of money

Partial pooling - income paid into separate accounts,
joint pool for household expenses

Qualitative study with 18 cohabiting couples: explored
meanings and practices behind separate systems
Behind the category labels: Meanings
and practices

14/18 used IM

3/18 used PP


Potential for variation in
financial practices
Money held in separate
accounts could be seen
as ‘belonging’ to both
partners

Three ownership
groups
-
Shared
-
Blurred
-
Distinct
Ownership perceptions
Separate financial entities
DISTINCT
Viewed and treated money in an independent way
Paid back any money they borrowed
Own responsibility to pay for joint expenses
Less clear sense of who owned the money
Viewed money as really there for their partner and for
BLURRED
the relationship
Give versus loan money
More flexible about paying for joint expenses
Expressed a very strong view that all (or nearly all) of
COLLECTIVE
the money coming into the household was jointly owned
Joint decision how the money in each account was used
Separate accounts were not private
Summary and implications of
qualitative findings

Diversity hidden under category labels of IM
and PP

Imply a level of separateness many couples do
not have

Moving beyond typology to include perceptions
of ownership
Survey study

Conducted online

190 cohabitants

Divided into 11 sections, including detailed look at
financial arrangements and perceptions of
ownership

Female viewpoint

Dual earners, without children
Ownership perceptions in the survey
study

8 items averaged to
create a measure of
ownership perceptions
(a =.88)

Categorical variable
also created by
dividing the scale into
3 categories: Shared,
blurred and distinct



“I would say that overall
I see the money that I
earn as money for the
relationship, rather than
just my money”
“I would say my partner
and I usually just give
rather than loan each
other money”
“We see ourselves as
separate from each
other financially”
Money management system by
ownership perceptions
Regression

Hierarchical logistic
regression analyses

Predictors of
cohabitants using
separate systems
making equal or
different contributions
to joint household
expenses

First step:
children under 18 years
(yes/no) &
- earning disparity (one
partner earns a great deal
more, one partner earns
slightly more, earn roughly
the same)

Second step
- ownership perceptions
(scores 1-5)
Regression
Summary of regression predicting equal contributions towards joint household
expenses (compared to different contributions)
Predictor
B
SE
Wald
Exp (B)
statistic
95% confidenc e
interval for Exp
(B)
(a) Children under 18 years
Lower
Upp er
0.26
0.88
0.9
1.30
0.23
7.31
-3.13
1.10
8.17*
0.04
0.01
0.37
-2.44
1.09
5.01*
0.09
0.01
0.74
1.14
0.31
14.46**
3.14
1.70
5.78
(yes)
(b) Earning disparity (one
earns a great deal more)
(b) Earning disparity (one
earns slightly mor e)
Ownership perceptions
* p < 0.05. **p <0.001
a) The reference category is ‘no’ children under 18 years
b) The reference category is ‘we earn about the same’
Predicting equal (compared to different)
contributions

Cohabitants who earn roughly the same amount
as their partner, and perceive money as more
distinctly (separately) owned are more likely to
make equal contributions towards household
expenses.

When one partner earns a great deal more than
the other and money is perceived as more shared,
cohabitants are more likely to make different
contributions.
Meanings and practices behind
separate systems

Vogler et al (2008) - separate systems reflecting a
desire by higher earner to retain greater access to and
control over money?

Looking at practices and perceptions behind category
labels in detail indicates this is not always the case

Earning disparity and different contributions

Extent partners feel they have separate control seems
to depends on how they perceive ownership of money
Summary and conclusions

Limitations

Strength - detailed financial information

Typology not always able to capture how those
using separate systems perceive and handle
money

Qualitative study provided rich base of data from
which to develop survey study
Directions for the future

Rigorous testing in future research

Fruitful and novel way of capturing detailed
financial information that researchers have
not previously been able to capture in
quantitative research