Love, money and this economy

Make Me Smart February 13, 2024 Transcripts

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Kimberly Adams 

Hello, I’m Kimberly Adams. Welcome back to Make Me Smart, where none of us is as smart as all of us.

Kai Ryssdal 

I’m Kai Ryssdal. Thanks for joining us everybody. Tuesday today, February 13. Valentine’s Day Eve. So, we’re going to talk money, this economy, and romance and how they shape one another.

Kimberly Adams 

Yeah. So, you want to know more about how the economy and the economic circumstances somebody might be in can influence people’s love lives and how couples are navigating all of that today. So here to make a smart about this is Julia Carpenter. She’s a personal finance reporter at The Wall Street Journal. Welcome to the show.

Julia Carpenter 

Thanks for having me.

Kimberly Adams 

So, before we get into the nuts and bolts of it, how different are the economic circumstances of singles versus coupled people in this economy right now?

Julia Carpenter 

I’ve written quite a bit about this because the gap we see between single people and married people has been slowly widening over time. And I think for a lot of people, they just say, well, that’s math. You know, of course, two people make more than one person. You know, that’s just how it’s always been. And while that’s true, to a certain extent, there is this widening gap between what a single person can amass in terms of wealth and security, and what a married couple can amass. And what I’ve also found is that cohabitating couples don’t get anywhere close to what married people are able to get.

Kai Ryssdal

Wait, keep going on that.

Julia Carpenter

Yeah, I know. It’s interesting. It’s interesting. And as a cohabitating person, believe me, I think about this quite a lot. We’re not quite sure what it is, it could be that there’s obviously a tax advantage to getting married, it could be that certain kinds of people get married, and certain kinds of people cohabitate for longer. If you are someone who is combining your wealth, which we know is a path to just absolutely skyrocketing your combined wealth, then that’s means you’re likelier to be married than it is that you’re cohabitating. Cohabitating people often still keep their finances separate.

Kimberly Adams 

Okay, well, now I want to know more about that. When it comes to married people or cohabitating people like what’s the landscape right now? In terms of people who had been living their own independent financial lives, actually choosing to join finances, because I know I hear from a lot of my peers that, you know, even if they were to get married or remarried, you know, the joining of the finances is a little weird.

Julia Carpenter 

Right, right. And it’s an interesting question because it’s something that people have very strong opinions about. It’s a very personal decision, obviously, to lump your finances together with someone that you’re dating or married to or wanting to marry one day. Some financial gurus say that you should never do it. Suze Orman is has very famously said you should never do it. But what the data shows and system data from the St. Louis Fed and the other Federal Reserve sources is that people who combine their finances are able to amass more wealth. And there’s a lot of behavioral science research that shows that people who do it are happier in the long run. They find that they are more satisfied in their relationship. And that could be because they’ve been able to amass more wealth, maybe that’s, you know, those two things are linked. Or it could be just that they feel that combining finances means that there’s more trust in the couple, or there’s more transparency in the relationship, something that gives them a greater feeling of security.

Kai Ryssdal 

Hmm. So, you know. So, it’s interesting actually. When we got married, my wife and I, she wanted to keep her accounts separate. And I said, fine, babe, whatever you want to do. And then slowly but surely, they all merge together and it’s one pot of money, and I’ve said this before on Marketplace, and I’ve said on this podcast, she’s in charge of every dime that comes in and out of our house. And I could not be happier.

Julia Carpenter 

Yeah, I’m so curious if either of you still have any sort of separation there.

Kai Ryssdal 

No, it’s all one giant pool of money to coin a phrase.

Julia Carpenter 

That’s interesting. It’s something I definitely see interviewing couples of different generations is that younger people embrace that this is more of a spectrum. You know, it’s not all one pot of money or all separate. They have, you know, one combined savings account, one shared credit card, but then maybe one person has a credit card that the other person isn’t on, or one person has a savings account the other person isn’t on. So, there’s sort of a blending of this approach.

Kimberly Adams 

That’s so funny because when I was married that’s exactly what we did. We had our joint savings and our joint checking. And then we each had our own separate checking’s and savings that like no questions asked, do what you want with your money. And we actually laid out and said, okay, here’s how much we need to pay our monthly bills every month. We’re going to put a set percentage towards our joint pot. And then a set percentage towards our own stuff to make sure everything is covered. So yeah, it was absolutely kind of that divvying up.

Kai Ryssdal 

And then when the marriage ended did it make the disentangling easier must have right?

Kimberly Adams 

It was so much easier. Yeah.

Julia Carpenter 

I’ve been living with my girlfriend now for almost, I mean, 2025 will be 10 years that we’ve been living together. And we have a shared credit card and a shared savings account. And another shared savings account that is, everything we put in there, is earmarked for a down payment for a house that we still haven’t been able to buy. But hopefully one day.

Kimberly Adams

Good luck.

Julia Carpenter

Yeah, I know. Thanks. Thanks. And then we each have our own cards, but we go over them together. We have what we call a money date, which I’m a huge proponent of. I’ve espoused a lot, and we go over them. We go over what we spend on those cards with each other, which I think kind of helps a little bit.

Kai Ryssdal 

But why have them separate than if you’re going to?

Julia Carpenter 

You know, I know it’s such a good question. We’ve talked about it before. There’s already the combining for so many couples, is this mental hurdle. You know? You think, oh, it’s going to be so much work. No, it’s not that much work. It would not be that much work to just open a new checking account, and we both have those cards. But for some reason, combining the savings already felt monumental. And of course, we did it in five minutes, probably less. And then getting on this credit card. We were like, oh my god, I think we each had it on our to do list for probably years. And then when we finally did it, I was like, okay, well, that was easy. So maybe one day we’ll slowly whittle down bit by bit. But I think for both of us, we like having our it’s what it’s exactly what you were describing Kimberly, like we both like having our separate cards just for little things. But we do. Yeah, we go over it with each other. So, it’s really more of a formality.

Kai Ryssdal 

You know, I think when we got married, my wife wanted to keep her separate accounts. And I don’t know that. We’ve never talked about this. I think she just wanted that sense of security that she had worked for a while and earn this money, and it was hers by God, and she was going to keep in her name. And I was like, whatever you want to do, babe, that’s fine.

Kimberly Adams 

Yeah, I think that also has to do. Oh, sorry. Go ahead, Julia.

Julia Carpenter 

Oh, I was just going to say the research about the satisfaction is so fascinating to me. Again, I do think that some of these, some of these things are kind of self-selecting, right? So, if you are more satisfied in your relationship, and you say, well, that’s because we combine money. And maybe you were a person who really values the ease of that or doesn’t have the past experiences that make that a scary thing to do, or an intimidating thing to do. But one of the things that they said makes them so much more satisfied in this relationship is the transparency. But also, the sense that they’ve both given up that autonomy. So now they’ve sort of given up that autonomy, and it creates this sense of trust that they’re both in this together, which I thought was really interesting.

Kimberly Adams 

I will say, but I want to follow up on another point you made, that it does make it easier to buy surprise gifts.

Julia Carpenter 

Oh yeah, I know. I know. I wrote a story about the spending limits that couples have with each other, you know, don’t spend more than $200 without talking to me or something. You know, these different rules that people have. And one of them was so sweet. The husband wanted to buy his wife a birthday gift. She wanted to buy her an indoor aerial silk trapeze. It’s like such a cool gift. Yeah, it’s such a cool gift. And he actually spoiled the surprise and told her. So many comments, so many comments, so many emails from readers saying, why did he spoil it? Oh, my God, he should have just sat on it. And I mean, he said I had to spoil it. This is our rule. This slightly exceeded our spending limit. And I had to tell her, and I just thought that was such commitment. I would have kept it a surprise.

Kai Ryssdal 

He’s a stickler. I will say I have not surprised my wife with a gift in 25 years because she gets the credit card statements? Yeah, totally.

Julia Carpenter 

That’s so funny. Yeah.

Kimberly Adams 

I want to hear more about this money date. What is it? And for people who might be interested, how does one go about it?

Julia Carpenter 

I was interviewing so many different couples in the course of writing about relationships and money and how we discuss our finances in our relationships. And when I would interview people who said everything’s going well, we have a great system. You know, we’ve found a way to fight about money in a good way, in a healthy way. And we found a way to resolve that fight in a good way. They all cited the money date as one of their secrets to success. So, I thought, oh my god, I have to learn more about this. And then I started doing it in my own relationship, and now I’m a huge proponent of it. Basically, it can happen anytime that you want it to happen. It doesn’t have to be weekly, monthly. The frequency is totally up to the couple and totally up to what works for them. I interviewed one couple who has it every year on their anniversary. They do one big money date a year. They go out to a nice dinner and then they come home, and they check in with each other on their personal financial goals as well as their goals for the household. And then they review any big purchases or any big issues that are coming up like, okay, how are we doing our taxes this year? Alright, we’re doing them that way. Great. Are we buying that car this year? Okay, we’re going to play it off till next year. Great. I do it where my girlfriend and I both sit down and we review the credit card statement, and we go over our upcoming purchases for the following month. So, we’re going to a wedding in March in Chicago. And so, this last money day that we had, we sat down, we bought our flights, we reviewed how much the hotel block was. And we committed to spending that much for this room at this hotel for this wedding for this person. And then went through the credit card statement. Cheers each other with a glass of wine and then probably watched trashy reality TV.

Kai Ryssdal 

Okay, it sounds so clinical.

Julia Carpenter 

It definitely is. It definitely is. And I think what keeps a lot of people from doing it, and what definitely kept us from doing it is that I feel like our time together is so special and rare. We both work very demanding jobs; we both have a million things going on. But I thought oh, you know, what I don’t want is for this time that we have just us to be fighting or to be dry or to be boring even. But it’s actually really nice. It’s really nice. I felt so connected to her. I felt very excited about this wedding we were going to, which before I had, you know, had it on my calendar, but not really had the time to think about it or plan for it. If anything, the planning for it felt like a bit of a chore. And I was putting it off. We got excited about it. And then we actually felt accomplished. And a lot of the researchers I interviewed when I ultimately wrote a story about this and about why it works. All these researchers said that they often talk to couples who say that it increases their intimacy and their connection because they feel again, like what we were talking about the combining of the finances, they feel like they’re in this together. There’s this sense of trust and security. You’re talking about the future together, which for many couples is something that makes them feel more confident in their relationship and more confident and where the relationship is going. And so ultimately, something that seems clinical and dry, which is I mean, no one likes paying bills, that part is going to be clinical and dry. Ultimately, it’s a good thing. It makes people feel better about themselves and about their partner and about them as a unit.

Kimberly Adams 

So, you mentioned sort of going out to a fancy dinner to do this. And I have to mention that going out at all has become a lot more expensive. Can you sort of zoom out to the broader economy and talk about what it’s like sort of living a relationship and the economy that we’re in right now?

Julia Carpenter 

I think any relationship right now, the maintenance of it is just a little bit more work than people expected in the past. And I think even friendships, I talked to a lot of people who say, making new friends or making new connections with people cost them money now and more money than it used to, you know, joining a new club or finding a new gym or creating a new hobby. All of these portals into meeting new people and creating connections with people that cost more money than it did two years ago, going out to drinks, going out to dinner, anything that you do, other than sitting at home and going through the credit card statement, which is free. That costs more money now than it used to. And it’s something that weighs on people. I have interviewed plenty of people who are dating right now, who say, you know, it used to be that you joined a couple apps, and you could meet people now these apps all have paid tiers. These apps have special levels of membership, so many different things on the horizon that I think a handful of years ago people didn’t know to expect.

Kai Ryssdal 

Who, this is going to sound bass, but it actually reflects all of that stuff. Who pays when two singles go out on a date?

Julia Carpenter 

It’s so individual and so personal. Every time I interview someone about this, I get a different answer. There’s no consensus. I truly, truly think it’s about, not to sound not to sound flip, but I think it’s all about vibes. You know, I’ve talked to so many people who say, if I’m not into this, I’m paying for my own drink and bouncing. You know, and I also hear many people who say if I am into this, and I’m buying the next round, you know, to try and sort of keep them there a little bit longer, find out more about them, you know, hold their interest for just even one more round, so that I can learn more about this interesting person, that I think. It’s so personal though it’s so personal. I interviewed a woman recently. She’s a younger person, and there’s been a lot made about how Gen Z and Gen Alpha have this, you know, sort of radical, radically egalitarian approach to gender roles, you know, we’re living in a post-Barbie world, etc. And she was still adamant that she would never pick up the tab on a date. She really felt like it was the other person’s job. And I was really surprised. I mean, I felt like that that attitude would have been applauded by my grandmother, but I didn’t expect it coming from somebody so young. So, it just shows that it’s so personal and individual, no matter what generation you belong to where you live, what you do any of those things.

Kimberly Adams 

I mean, I’ll ask one more thing about that, then we can let you go. Because a lot of this does have to do with gender. And I get that it’s very, like heteronormative. But this idea that women, women’s economic standing has changed over the generations, and especially when you’re talking about women dating men, this assumption that men are always doing better, and therefore they should pick up the tab is kind of being upended. And yet in society, you know, culturally, you’re still sort of trained for what that person was just telling you.

Julia Carpenter 

Absolutely. And I mean, one of the things that’s fascinating to me, and I really want to do a story about this, is single women are the fastest growing group of first-time homebuyers. There is this huge. Yeah, I know. I’m like, okay, they can do it. I can definitely do it. But I feel like there’s really been huge, yeah, thank you. Thank you. There’s this huge upswell. And we seen all of this data about how for millennial women and millennial men, their earnings are roughly equal, or even sometimes millennial women are out earning their male counterparts. So, there is this difference in that generation that changes how we date, changes how we talk about money in our relationships.

Kimberly Adams 

So much more to do but out of time. Julia Carpenter is a personal finance reporter at The Wall Street Journal. Thank you. That was all super interesting.

Julia Carpenter 

Thanks. Great to talk to you all.

Kimberly Adams 

I’m a millennial woman who was a first-time homebuyer when I was single. I feel very seen. Yeah. And I was, you know, it’s funny when she was talking about how different people approach paying for a meal. You know, I sort of bounced between like feeling like I should split it or, you know, let the guy take care of it. But you know, a surefire signal that I’m just done with the interaction is me just volunteering to pay for the whole thing.

Kai Ryssdal 

Oh man. All right, everybody. Listen up. If you know or socialize with Kimberly Adams, that was the tell right there, people.

Kimberly Adams 

That’s the tell. How is uh, have you noticed your date nights getting more expensive?

Kai Ryssdal 

Oh, yeah. Are you kidding? Totally. Absolutely. Look, it’s really hard to go out and sort of entertain and do that all that socializing stuff right now, price levels, as we know not to get all inflation. But they’re sticky. It’s happening.

Kimberly Adams 

Absolutely. Yeah. It just stays up there. Okay, well, have you all ever planned a date to talk about finances? I’m also very curious if you’re single, have how you manage the who pays for the date dynamic, or you know, anybody who’s searching for less expensive data ideas. If you have advice or suggestions, share all that with us. We’re at 508-827-6278 also known as 508-U-B-Smart. We will be right back.

Kai Ryssdal 

All right, we’re going to do some news. Kimberly Adams, you’re going to go first.

Kimberly Adams 

Yes, because mine has to do with what we were just talking about, which is relationships. Very interesting opinion piece in The Washington Post by Rhaina Cohen, who the headline is “Marriage has a monopoly on legal benefits. And it shouldn’t.” And so, you know, Julia was just telling us about a lot of the economic benefits of marriage. And a lot of those are tied to the legal benefits of being married that are literally locked in to the code. One part of the says, “the United States privileging of marriage through its omnibus package of more than 1,000 federal rights and benefits, fails to address not only the time people spend single before or after marriage, but also the record-breaking share of Americans who have never married. It also fails to acknowledge that some people simply aren’t that eager to marry, including the many who are single by choice.” The article goes on to talk about all of these relationships that are friendships very close, where people like make the decision to take care of each other as platonic friends but have no rights for each other. Also, pieces of legislation, including a law in Colorado that has it’s called the Designated Beneficiary Agreement that allows you know, quote, “any two adults, regardless of the kind of relationship, they have to exchange important medical and financial rights and protections.” There’s also the federal government, which allows the federal employees to take leave to care for any individual related by blood or affinity, whose close association with the employee is the equivalent of a family relationship. And there’s a lot of research showing the benefits of marriage for people’s mental well-being and emotional well-being, what it does for kids, what it does for families, and all of that stuff. But there is a growing share of this country that is single, is probably going to remain single, and has other kinds of relationships that have value to them and might be lasting. And I do think it’s probably time for a reassessment of how some of these perks and benefits are distributed in society.

Kai Ryssdal 

Yeah, I don’t think it probably is. I think just is. I think just is. You know?

Kimberly Adams 

Yeah. Yeah, it is. You know I like to caveat everything. Oh, I take lots of stands.

Kai Ryssdal 

So, here’s mine. It’s a little dorky. But I’m going to timestamp this right now. So, inflation, the inflation number came out today, the CPI came out. It was hotter than everybody had expected. And of course, the markets today you’re going oh my god, the end of the world is nigh. So first of all, Wall Street grow up. But the Federal Reserve is at some point in the next three to four months going to start cutting interest rates. And I think when it does, the Federal Reserve is going become once again, a political football. And you’re going to see specifically from Donald Trump because Biden has a track record of actually not doing this, as do most presidents going back to at least Clinton, of leaving the federal loan. Donald Trump is going to start accusing the Fed of playing political games. And I just want to timestamp that right here. Because that’s not what the Fed does. And all you have to do is listen to Jay Powell’s words from 60 Minutes last week, integrity is the only thing we have. We will do anything we have to do to maintain that and just watch for it. It’s going to come. It’s going to come like June-ish.

Kimberly Adams 

I feel like every single presidential cycle people say this, you know, that the Fed is doing X because they want X political outcome, regardless of what the Fed does. Okay, that is it for the news. Let’s move on to the mailbag.

Mailbag

Hi Kai and Kimberly. This is Godfrey from San Francisco, Jessie from Charleston, South Carolina. And I have a follow up question. It has me thinking and feeling a lot of things.

Kai Ryssdal 

Nova and I were talking the other day about the Apple Vision Pro. That headset thing. Nova, more than me, but, you know, still I was negative. Nova was very negative about it. Half empty, technically, in the terms of the game. Anyway, we got this.

Owen

“Hi, my name is Owen. I’m calling from the far north of Quebec. There are so many applications for people with disabilities that really are interesting, especially I was thinking of people who are hearing impaired and who could get subtitles. A lot of technologies end up being produced for entertainment or commercial consumer reasons. And the applications that benefit people come afterwards because it’s so expensive to build these technologies and make them useful. Y’all take care.”

Kimberly Adams 

Very good point. Very good point.

Kai Ryssdal 

Far north of Quebec, and he says y’all, how about that?

Kimberly Adams 

Did they not say y’all in Quebec?

Kai Ryssdal 

Not in the far north. Y’all is a southern thing, right? I mean, you know, y’all.

Kimberly Adams 

No, I don’t know anything about Quebec. It’s north. Okay, one more. Grits from Kentucky sent me this message on X, which I rarely check, so it’s a couple of weeks old, but Grits sent me this message, which said, “I’m listening to all these reports about great and economic indicators, but deeply negative public perception of this economy. Is anyone focusing on the possibility that it’s related to widespread PTSD. We went through collective trauma, courtesy of the pandemic, etc. And then just kind of picked up and moved forward. It seems like maybe the economic perception has nothing to do with the indicators, and a lot to do with a general depression.” And I hadn’t thought about that, about just people being emotionally unable to feel like things are better when we’re all still traumatized. And I thought that was really interesting.

Kai Ryssdal 

You know, I think it came up in the early days of this podcast. We didn’t have a chance to grieve the before times, right? We just went straight into the pandemic. Five stages of grief was not happening, right? It was just boom. So yeah, interesting thought.

Kimberly Adams 

Athen we were supposed to bounce back to save the economy. You know, get back out there. Start spending again, save small businesses, and it’s like yeah, but yeah.

Kai Ryssdal 

All right. We had as we always do, with the make me smart question, what is something you thought you knew later found out you were wrong about? This week’s answer comes to us from Misty Heggeness. She’s an economics professor at the University of Kansas, also the author of the forthcoming book, “Swiftynomics: Women in Today’s Economy.” Here you go.

Misty Heggeness 

“In 1957, economist Gary Becker published the economics of discrimination. The basic core of his theory assumes discriminatory behavior is rational. It goes away on its own accord within market systems because of inefficient behavior. When I wrote a piece for Fast Company last October on the clash between Swifties and hardcore NFL fans, I argued that Becker would once again be proven wrong, but I was wrong. See, women are often limited. The minute we entered a space traditionally dominated by male power, we’re often pushed out, and that’s what I expected to see happen to Taylor Swift. Instead, the Chiefs coach Andy Reid and NFL Commissioner Roger Goodell came to her defense. I’m sure there are many reasons but there’s one big one. A recent analysis by Apex marketing group showed that Taylor Swift added the equivalent of $331.5 million in brand value to the NFL and the Kansas City Chiefs. That’s definitely more than a handful of angry dads, Brad’s and Chad’s could ever contribute. Economist Gary Becker may have been right all along. When discriminatory behavior clashes against the bottom line, the bottom line will win.”

Kai Ryssdal 

Show me the money.

Kimberly Adams 

You’re supposed to scream it louder. Show me the money! Okay. We want to hear your answer to the Make Me Smart question. Our number is once again 508-827-6278. You can also call us at 508-U-B-Smart. It’s the same number.

Kai Ryssdal 

Make Me Smart is produced by Courtney Bergsieker. Ellen Rolfes writes our newsletter. Today’s program was engineered by Jayk Cherry. Brian Allison’s going to mix it. Our intern is Thalia Menchaca.

Kimberly Adams 

Ben Tolliday and Daniel Ramirez composed our theme music. Our senior producer is Marissa Cabrera. Bridget Bodnar is the director of podcasts. Francesca Levy is the Executive Director of Digital. And Marketplace’s Vice President and General Manager is Neal Scarbrough