My wife and I got married in 1968, and in the 50-plus years we've been together, we've never had a single fight about money. There were deliberations, but never any fights. I get asked all the time: "How do you do it?" The secret, I tell them, can be summed up in three words: It's our money.
I realize this isn't the case for most couples. But having spent my entire career in employee benefits, finance and retirement counseling, I've witnessed a handful of misguided ideas about marriage and money.
In the early 60s, less than 25% of married women were employed, which led men to believe that any overtime pay they earned belonged solely to them. It was rare for couples to discuss their conflicting attitudes toward money — and if they did, they often found themselves caught in an antagonistic gridlock.
That sort of attitude led to a lot of tension in marriages — and it's still prevalent today. In fact, arguments about money are still one of the top predictors for divorce. But the way I see it, differences over money should never come as a surprise when you're married.
As anyone who's been married for several decades can tell you, financial compatibility is an essential element to any successful marriage. One miser and one spendthrift will have a tough time agreeing. That doesn't necessarily mean the relationship is doomed, it just means a serious conversation about financial goals and values must take place immediately. Having financial peace in a relationship is a matter of mutual respect and responsibility. The objective is to work on having a similar money mindset moving forward.
I'm 75 and my wife is 79, and we've maintained a peaceful marriage — thanks in large part to our shared views on saving and spending. She knows as well as I do where we stand financially. Any money that comes in is considered as our money, regardless of who brought it in, and we manage it together.
I retired in 2010 as vice president of compensation and benefits for a Fortune 500 company. My wife (also retired) and I live off my pension and our Social Security benefits, but our money philosophy has remained the same. We have several joint checking and savings accounts. Once money goes into an account, it's apportioned among many others. For example, we have an account designated for travel, and another for fixed monthly bills, which includes utilities, taxes and HOA fees. Our checking accounts are mainly used to pay credit card bills.
This compartmentalized approach is our way of budgeting. But here's the thing, we also know that neither of us is going to spend more we can afford. If there's something significant that we need or want, we'll wait until we've saved enough to pay in cash.
Many financial experts will advise against joint accounts. Call me old-fashioned, but I wholeheartedly disagree. In my opinion, insisting on a strict division between the money that each party earns is a sign of not being fully committed to the union.
If both parties are constantly questioning each other's financial decisions, it's unlikely that the relationship will last. I can understand a working person wanting a sense of ownership to some degree, but a marriage should be built on complete trust. Insisting on "your money" and "my money" violates that commitment. (Besides, there will be plenty of time for divisions in the divorce process.)
My wife and I don't consider ourselves wealthy. We're financially secure because we made sure our goals and values aligned before entering the dominion of marital bliss. That said, it does take a lot of hard work. We have four children who all went to private colleges. They worked campus and summer jobs to pay off their loans. My wife and I remortgaged our house (twice) and even started a part-time business to cover the remaining costs. That meant working 16 hours a day between two jobs.
My point is, if you sort out your differences early on and agree to say "it's our money," you'll live happily ever after or hold hands in bankruptcy court. Either way, you'll be in it together. But if your money differences are extreme, proceed at your own peril. Based on what I've seen, major changes by either party are unlikely.
Keep in mind that this advice is coming from someone who's been married for more than 50 years, so unless your relationship is intended to be permanent, the "mine is mine" approach may be better.
Dick Quinn is a financial blogger and MarketWatch contributor. Before retiring in 2010, Dick was a compensation and benefits executive at an S&P 500 Company. His previous blogs include Healthy Change, Saving Ourselves and Required Irritation. Follow him on Twitter @QuinnsComments.
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