My Husband Loses Money On Stocks—And I Don’t Mind

My husband loves to play the stock market. He picks what he considers to be up-and-coming companies that few people have heard of yet, or undervalued blue chips, and buys up their shares. As he puts it, he likes feeling like he has an "ownership stake" in companies.

Sometimes, his strategy pays off. His initial investment of $5,900 more than doubled between 2005 and 2007. He bought Apple at $65 a share and watched it climb to $190. The start-up 24/7 RealMedia doubled and he sold it before it plunged. His oil companies enjoyed record profits. But he often loses big, too.

Even before the October 2008 stock market crash, his investments had lost a third of their values from their peak. He erred in choosing the GPS-seller Garmin, which enjoyed great success until it lost ground to cell phones and other handheld devices. His investment in AIG, the insurance company that got a giant government bailout in September, fell to half of what he paid. First Solar, which develops solar technologies, went from $260 per share to below $100, but he still believes it's going to make a comeback.

I'm not so sure about that. But I also don't really care. And that is the beauty of our money system.

It's not that it's not my money, too—it is. But after realizing, as many couples do, that our financial habits aren't identical, we decided that creating a mix of separate and joint accounts would be the only way to let him invest in the stock market while I ignored it. Some couples need separate bathrooms or even beds; my husband and I needed separate investment accounts.

Here's how it works:  For the most part, all of our money is combined. We share checking accounts, credit cards, long-term investments, and savings. But when it comes to his stock market account, I don't get involved. It holds the same cash that it did when we first got married, but if we ever need it—in an emergency or to buy a house—then it will revert back into our common funds.

We didn't always have such a drama-free arrangement. Shortly after we got married, I argued that we should keep more of our money separate. I had a savings account that I started building up at age five; couldn't that remain under my name only? But at the same time, I wanted him to share all of his pre-marital savings. In her book Flux, Peggy Orenstein describes a similar urge, and points out how unfair it is: "Too often…particularly in the early years of our marriage, I viewed my earnings as mine and Steven's as ours. I wanted to be equal partners, but… I also wanted him to take care of me."

We should have had the big money talk—in a coffee shop. Financial experts say that just as you don't want to bring up sex suggestions in the midst of an intimate moment, you also don't want to talk about money habits when you're in the middle of a big transaction. Bringing up the subject on "neutral" territory like a coffee shop can help avoid flared tempers.

After much discussion—and one heated argument on a long car ride—we reached the conclusion that it wasn't right for one of us to hoard our savings while the other shared his. Since we had the same, generally frugal outlook on spending and saving, we decided we could accomplish our shared goals just as well, and with a lot less paperwork, with one account. I didn't want to go out to dinner and wonder if I needed to offer to pay, or calculate how to split the costs of a weekend getaway.

And since we're both so cheap that even buying a cup of coffee requires an internal debate over whether it's worth the cost, it works. No one's getting mad about the other person's wayward habits. (Well, except when it comes to my pedicures and his cable, but we've both learned to accept those splurges.)

There was the one tiny area of the stock market where our habits diverge. Where he sees opportunity, I see potential disaster. A bad experience with dot-com stocks in my early 20s (they crashed) has left me yearning for safety. It turns out we're pretty typical for our genders. Research shows that men tend to make riskier investments, while women prefer more conservative ones, which is why married couples who balance out each other's natural tendencies tend to do better with their investments than single people.

But we should have expected conflict. Bonnie Eaker Weil, relationship therapist and author of Financial Infidelity, says we tend to be attracted to our "financial opposites," so savers are drawn to big spenders and vice versa. We do it, she says, as a way of balancing our own impulses. While the contrast can lead to disagreements, it also helps lead to a balanced end result, so don't be afraid of differences, she says.

Once we figured out how we differed when it came to money, we devised a strategy to handle those differences. For me, it was keeping investment accounts separate; for others, it may mean sharing all accounts or keeping all accounts separate.

We quickly realized that if he kept a separate account for that one activity, then we could bypass hours of debate over whether he should invest in a riskier stock or safer bonds, or whether he should take money out of our savings account to put it in the market. In return for this freedom, he wouldn't put any additional funds into the account, and he would liquidate it if we ever needed the cash.

It's turned out to be a winning arrangement. I don't have to worry about whether First Solar has made its comeback or if Big Oil is reporting its earnings. When he complains to me about the fact that he lost $500 during one day, I can sympathize instead of getting angry. And our rule about not adding more money to his stock market account has saved us thousands of dollars in losses from the market's recent downturn. In fact, in November, my husband's account briefly fell below its initial $5,900 level—a sign of just how far the market has fallen. He's sad about the losses, but not nearly as sad as he would be if I had been upset, too.

Kimberly Palmer writes the Alpha Consumer blog (www.usnews.com/alpha) on personal finance at US News & World Report.