ONE HOME, TWO BUDGETS:
More Young Couples Opting for Separate Accounts

November 25, 1997

Since the end of World War II, Japanese couples have been for the husband to bring home the paycheck and to hand it over to his wife, who managed the household funds. But this model is losing sway among younger working couples, who are increasingly keeping separate household accounts to manage their incomes. This trend is affecting patterns of consumption, promoting individual purchases of consumer durables as well as separate uses of travel and other services.

Double Incomes Mean New Budgeting Styles
In many large households prior to World War II, the male head of the family controlled the household budget. But following the war, the spread of the nuclear family gradually did away with these extended households and patriarchs. Men went to work as "salary men" and had their paychecks deposited directly into bank accounts. For the most part, husbands worked and wives took care of the house and household budget, creating a strict division between the breadwinner and the homemaker. The paycheck would come under the control of the wife, who would dole out a fixed allowance to her husband. But recently this postwar model has grown less pervasive as the number of women holding jobs has increased. The new, rapidly spreading family model is now run along the lines of an equal partnership, with the husband and wife handling their own incomes separately. This trend is especially pronounced among couples in their twenties and thirties.

This equal-partnership household can take a variety of forms. One 29-year-old woman working for a bank in Tokyo sets aside a fixed amount each month to go toward living expenses, such as food and rent; her 32-year-old husband does the same. She says there is no need for either of them to know how much the other makes. Apart from this model, where each spouse pays a certain amount each month, there are some couples who pay an amount in line with each partner's salary to cover their common expenses. And some couples divide the expenses among them: The husband may cover housing and utilities while the wife buys food, for example.

A burgeoning number of Web pages and Internet chat rooms are dedicated to the exchange of information relating to these ways of handling household budgets. A think tank affiliated with a major bank carried out an Internet-based survey on home-budget management from March to May of 1997. The survey found that a slightly higher share thought that in cases where both members of a couple have a substantial income, it is better to maintain separate accounts unrelated to household expenditures, rather than pool all income in a single household budget (48.9% of respondents preferred separate accounts, while 47.5% chose the unified budget). Another think tank with ties to a chemical manufacturer found in a 1995 survey of two-income families that 36.4% of couples in their thirties split household expenses more or less right down the middle--the highest figure for any age group.

Consumption Patterns Also Affected
A couple's decision to approach their household budget as equal partners is generally based on their having two solid economic bases. This is, of course, tied to the increase in double-income couples. The average age at which people marry has risen, according to Ministry of Health and Welfare surveys, from 26.9 for men and 24.2 for women in 1970 to 28.5 and 26.3, respectively, in 1995. More couples consist of two people who have reached relatively high income levels and who do not wish to see a drop in their standard of living following the wedding.

For women, too, a steady income serves as a hallmark of their own independence, making them shy away from the idea of quitting their job. Fewer women are making the move from workplace to home after getting married: The Ministry of Labor reports that the ratio of married women with gainful employment has jumped from 41.4% in 1970 to 57.1% in 1995. And working women who bear children take advantage of maternity leave in order to remain in the workforce. The Labor Ministry's figures also indicate that the gap between men's and women's salaries is closing: In 1995 a woman earned an average of 62.5 yen for every 100 yen earned by a man, compared with only 58.9 yen in 1980.

The desire for private space also factors in the current trend toward separating aspects of a couple's finances. The generations now in their twenties and thirties, who matured amid increasing home ownership and a decline in the birth rate, often had their own rooms. They tend to dislike the interference of others in their own space and they feel strongly about using their money as they see fit even after marriage. The desire to manage their income without interference has helped to give rise to this trend toward separate wallets. For some years now, women's increasing presence in the workforce and the rise in the age at which they marry have led to a boom in single women purchasing their own homes--property, as well as income, has become a factor in the management of household budgets following marriage and spurred the partnership-based budgetary thinking. Couples also find bothersome the paperwork needed to establish joint ownership of property owned by one partner prior to the marriage, giving them one more reason to opt for separate accounts within the home.

These changes in household budgetary patterns are affecting patterns in consumption as well. A household budget account plan offered by one major bank, which lists the names of both husband and wife in the passbook and includes two separate cash cards, has attracted tens of thousands of double-income couples as customers. A think tank affiliated with an advertising firm opines that couples with separate wallets will feel freer to exercise their own wills, which will in turn lead to greater financial liquidity. Sales of consumer durables, such as televisions, stereos, and even automobiles, which used to run along lines of one to a household, are now increasingly aimed at one unit per person. And travel agents' and other services are being consumed more and more by married individuals rather than couples.

Unmarried Japanese are also leaning in greater numbers toward separate household accounts. A survey carried out by a private think tank reveals that 43.9% of unwed men and 47.4% of unwed women hope to maintain separate budgets after marriage regardless of their expected income. The equal-partnership approach to household budgets is set to continue its upward trend.

Ministry of Foreign Affairs

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