A couple of weeks ago the Wall Street Journal published a great article about the crux of our company's mission entitled, “The Best Ways for Couples to Manage Expenses.”
This couldn’t possibly be more relevant to Smoov.
We figured we’d share some soundbites from the article and provide a little Smoov color commentary.
Ultimately as we have said before, there is no silver bullet to managing shared expenses in your relationship, and every couple is in a unique situation that requires the appropriate attention and personalization when it comes to managing finances - but because it’s such point of contention for relationships, our goal is to ease the process and provide tools that facilitate the conversation.
This snippet from WSJ embodies that:
“Money can be one of the most contentious aspects of a relationship or marriage. One in five couples identifies money as their greatest relationship challenge… of course, there is no single right or wrong way for couples to divvy up their finances and financial duties.”
One in five, aka 20% of couples. When you think about how many people are in relationships that certainly seems like a lot. Smoov is here for them to navigate this challenge so the next time there’s a survey like this they say that deciding what Netflix series to watch as their greatest relationship challenge. Shameless plug for these folks to sign up for our waitlist to start using Smoov to ease the pain.
“We don’t have to ask our partner for permission to make the occasional luxury or experiential purchase… Giving each partner a safe financial space—where they can have some money to do what they want when they want without having to ask—is a really important step to a healthy marriage when it comes to money… Neither of us wanted to feel judged by our financial purchases nor be told what we could or could not buy."
This is one of the major benefits of maintaining separate bank accounts and credit cards - financial autonomy and privacy. Let’s not forget about the occasional gift for your significant other that usually lands better as a surprise. Now obviously this is one perspective but it’s true that autonomy, independence and privacy are held in high regard in our culture - particularly in younger generations. We believe this trend is only going to increase as Gen Z continues to push upward in the workforce and into mature committed relationships.
"The 50-50 setup leaves neither of us feeling like we’re doing more than the other. We also make close to the same salary, so it feels fair."
What this perspective is highlighting is the underlying emotional tension that can compound if not addressed. Of course the 50-50 setup doesn’t make sense for every relationship, but ultimately it’s about finding what setup does work based on your respective financial situations. For example, in Smoov users can set a default split percentage of their liking, and override that default for certain expenses if need be.
"We figured what the total would be and then figured our proportionate income for the household. For example, my income accounts for 70% percent of the total household income. So, if our monthly bills are $4,000, I would contribute $2,800, or 70%, each month to the joint account and she would contribute her $1,200, or 30%. We did it this way so it would be fair and no one would feel like they are over-contributing or under-contributing, because it’s all relative and subjective."
This context is great for us. From a product standpoint, Smoov is going to allow users to add their annual incomes - understanding that this information is still not shared in some relationship stages, but if users want to they can - and Smoov will automatically suggest an optimized split ratio for shared expenses. Even if it’s not income based, users can adjust their contribution percentages.
"I did all of the finances at the beginning of our marriage. However, this inequity turned into a weird dynamic where my spouse felt like she needed to ask for permission to spend money."
Another great perspective on the underlying emotional conflict that can arise when these arrangements don’t allow for mutual financial independence.
"We are not just partners in life; we also have a partnership in our finances."
Another theme that seems highly relevant for younger generations. For couples getting married later in life, having built independent wealth as well as learned about the risk of marriage and likelihood of failure from the generations before us, there is significantly more awareness about what type of commitment marriage is - it’s not just about love, the reality is that it’s also about managing finances together in life and building towards mutual goals.
"We have a dollar amount above which discretionary purchases for the household are made jointly."
Another shameless product plug - in Smoov, users can set a threshold where any transaction over that certain dollar amount can be automatically pushed to their shared expense list.
The fact that WSJ is talking about these challenges and concepts is massive validation for the work we’re doing.
Excited to share some product sneak peeks in the coming weeks.
Until next time - take it easy and keep it Smoov.