Thoughts on Polyamorous Financial Independence
Freedom includes both loving whom you wish, as well as the power to walk away when needed. Polyam finances are important to both forms of freedom. Maintaining multiple intimate relationships requires solid finances to strengthen them.
To my utter joy, personal finances are varied and personal. There's no right or wrong answers, only choices to make. It's a realm of trade-offs. Polyamorous finances are no different in this regard. Though they are much less established and published about.
In this article on my blog I'm going to explore my thoughts on polyamorous finances in relation to financial freedom (aka financial independence/optional retirement).
Like many others in the community, I dream of having my polyam commune. It's one of my big plans, which will require a significant amount of money to fund a large household. I'm inspired largely by my youth on the family ranch.
To get there I'll need to develop my financial savvy and train up my partners' skills. Also along the way, I need to navigate personal finances with partners that may come and go.
How do we handle money? By pooling it or keeping separate funds? Do we live together? What's "fair" in our relationship agreements? How do you keep the ability to walk away?
The prevailing attitude amongst polyamorous circles is that the focus is on individuals within relationships, rather than the group of relationships. That people come first, not the group – though I imagine polygamists have a different view.
That is not to say that everyone is autonomous or solo poly within individual-focused relationships: being entwined or autonomous is a separate decision.
The Basics of Polyamorous Finances
When we say the individual is the focus of polyamorous relationships, what we mean is that each person is responsible for their own well-being. That involves asking for others to provide what you need. Though, others may not always give you that assistance.
The finances of individually focused polyamory are thus about what is best for the individual. You look after yourself, because the first rule of rescue is to not add to the victim count. You cannot give from an empty cup, and so on.
On the other hand, you can have a group focus that provides for the needs of as many of its members as possible. The cost is that individual desires will be set aside for the sake of the group's benefit. Though in return the group is responsible for caring for each individual.
After determining the group versus individual focus, then comes the question of entwined or autonomous people.
Entwined financial decisions come in a variety of forms, be it shared car payments, shared living arrangements, marriage & joint taxes, pooled assets such as money and investments, co-ownership in businesses, and so on.
Of course a classic question of entanglement is whether or not you have joint accounts. I wrote about those in particular with this article:
In brief, I recommend avoiding joint accounts as the sole basis of finances, especially when you consider polyamory. Joint accounts are useful tools, but I recommend that almost everyone carries individual checking accounts and only use joint checking accounts when it makes sense to.
As a converse to entanglement, autonomy is about the ability to self direct and be self-sufficient. To act as you wish, more or less when you wish to.
Autonomous people in polyam relationships are more likely to have their own living arrangements, individual retirement plans, independence for making day to day plans, and so on.
Types of Polyamorous Finance Arrangements
There's a few different approaches to polyam finances that are worth mentioning as de facto archetypes.
There's the two extremes of individual and group focused finances: fend for yourself, and all-in pooling. Both carry risks and significant downsides.
With fending for yourself, everyone has completely separate finances. There's no opportunity for mutual benefits or synergies. It's brittle because it lacks financial support that relationships typically provide.
If anyone deals with an onset of disability or suffers a hardship, it's helpful to have a network of support to fall back on:
Sadly a fend for yourself approach to finances leaves plenty of room for failing partners when they suffer their hardships in life. Everyone needs help at various points in their life, and fending for yourself isn't conducive to that.
At best, fend for yourself gets put aside when the going gets rough. People shift into more supportive structures when circumstances change. At worst though, fend for yourself is an excuse for people to act in pure self-interest and abandon others.
On the other extreme, there's all-in pooling of resources where everyone contributes into the common pot. This commingling of funds complicates accounting and risks gift taxes, especially when people need to deescalate or walk away.
Then comes the approach of core and satellite, which has a core to finances (sometimes a marriage, sometimes a person) that supports satellite partners. That support often comes in the form of housing, but sometimes it's money or groceries or co-signing loans.
It is likely that my dear lady, my husband, and I will all form this arrangement when my dear lady moves in with us. She's most likely to remain a dependent who relies on our support.
There's many significant pitfalls to core and satellite arrangements. For one, power dynamics are heavily skewed in favour of the "core" and care needs to be taken to avoid abusing this power. Avoid making decisions unilaterally.
Another problem is that satellite partners may feel de-prioritised, as if they were "lesser" partners due to their diminished entanglement.
Finally, there's proportional contribution to joint pools, which is the approach of contributing a percentage of your income to each shared pool with partners.
For instance, I might contribute 50% of my take-home pay to my dearheart's joint account for our housing whilst he too contributes 50% to the joint. Then I might contribute 15% to my dear lady's joint account for groceries, as does she. The residual (leftover money) can be saved or spent on yourself.
This approach is what I generally recommend in my article about joint vs. separate accounts.
The Dream of Being Independently Wealthy and Having a Polyamorous Commune
If you're new to my domain, then you may not be aware that I am chasing financial independence: that is to say, I'm working on becoming wealthy enough to be free from traditional work, for life. Some people consider this "optional early retirement."
For me, financial independence will not take the form of a life of leisure or travel.
Instead it will be about securing the foundation for me to fill my life with wonderful people and build things that benefit others. I'll never stop working for a better world:
In my youth I spent a few years at the family ranch with frequent visits from friends and family. It was incredible to host friends and their families for months or years at a time, and led to many memories and stronger relationships.
Couple those points together, and it makes sense why I too share the dream of building a polyamorous commune.
However, it's important to lower your expectations about dreams like this!
Living in close proximity to many people is incredibly difficult, and can lead to both bettering yourself and burnout. There is always minutiae, drama, and friction when people are involved.
There's ways of mitigating those facets of friction.
A commonly discussed dream amongst the polyam community is to get enough land to build multiple tiny homes on. That helps with privacy and having places to retreat to.
Ownership in such a commune is a complicated and touchy subject though. Mortgages don't go well with multi-partner arrangements, so good luck getting funded if you're not wealthy enough to pay out of your own pocket.
Then, do members buy into the property? What happens to their stake if they die and someone inherits from them? Or if they need to leave, how do they get their stake back? Do you need to sell the entire property to fund their departure? If so then you have a nuclear option to contend with, where a single person can disrupt the entire commune.
Or if you leave only a central entity (a person/marriage/dyad) in ownership of the property, you have yet another power imbalance that makes for friction. What do you do when people living on the property leave with outstanding damages? Who pays for repairs? Do you arrange it so that people living on the estate pay rent, and rely on tenant laws to govern your relationship? What if the nominal owner has a falling out with the rest of the people?
I'm not going to touch upon ownership models in this article, such as housing co-ops or having a legal entity own the property. Suffice to say that ownership is a complicated subject at best.
In my case the ranch had multi-stakeholder ownership of the property, with different percentages of ownership between my family members. This caused significant amounts of stress as things like capital improvements (i.e. building the solar array) changed ownership percentages over the years.
On the positive side though, the tight ownership of the ranch meant that some problems could be easily addressed with people who stayed there. My mother could be a benevolent dictator at times.
We had several examples of interactions on the family ranch:
For one, the ranch foreman lived on the ranch for free room and we gave him a stipend for food and supplies. In return he managed most of the landscaping and outdoors of the ranch, as well as the animals.
On the other hand though, we had an acquaintance we gave a room to. They agreed to help with the outdoors work, but in the end they never actually did so. This is yet another concern you have to face with a commune: people that are perceived as not doing their fair share of work.
Worse still, you also need to have plans in advance about how you will handle serious problems in a commune. Addiction, assault, scorched-earth bridge-burning exits, malingering, and more.
If you're not thinking of catastrophes and how to handle them, then you're not prepared to actually live the dream. It takes a lot of communication to reach a consensus on how to address problems.
Of course, one of my salient lessons was that when there's less money at stake, people are more willing to be graceful. This is why people being independently wealthy is so important to me, it gives us the power to walk away from situations that don't serve us.
After all, you can only negotiate when you have options and alternatives.
Cost Efficiency of Shared Living and Entanglement
If the goal is to get everyone to financial independence quickly, there's an obvious approach: entangle everyone together to get the cost efficiency of shared living arrangements.
For many, roommates are a necessity rather than a lifestyle choice. It's often nicer to be flatmates with people you're intimately involved with, though not always. I have an article about my dearheart husband and I getting a roommate, here:
In short, if everything is harmonious this kitchen table approach is a way to stack savings quickly. Living efficiently with multiple people in one unit helps fight the rising housing costs of the market, as the bill gets split multiple ways.
Things like groceries benefit from economies of scale too, especially if you have people dedicating their time to cooking for others.
In many ways, it seems as though society is not set up for solo people to navigate it. I often lament that society is prejudiced against solitary people. Especially when it takes a polyam household's worth of people just to resemble functional adults.
With all the benefits of shared living and entanglement though, there's always one downside: the golden handcuffs.
The deal of efficient living may be so sweet that it makes it difficult to walk away if things become toxic.
I don't want to trap people together in a household. After all, financial independence is all about being able to walk away from what doesn't serve you.
The Power of Walking Away
Every time an entangled relationship is formed, there should be some thought about how to handle disentangling it.
At a minimum, there should be a "moving cushion" or "walkaway fund" or "deescalation budget." In the business world, this might be called a severance package.
It's kind of like the standard advice in the personal finance community about having an emergency fund: it's an awful mess to need one and not have it. Better to prepare for it in advance of the actual emergency.
Basically a walkaway fund is a pool of money set aside for a partner to get out of the entanglement. Sometimes this will mean a few hundred dollars for moving costs, other times this will be a few thousand dollars for rent whilst they get situated in a new place.
Money is one part of the fund, but really the point is that there's a commitment to handling deescalation cleanly with partners. This may involve staying friendly, helping move them out, and more.
After all, polyamorous relationships are not usually measured as "successful" because of how long they last. They're successful based on the joy and fulfilment they bring to each person.
Sometimes that means having short romantic ties with a clear ending, such as when moving away to a different city. Other times that means on-and-off relationships as circumstances fluctuate throughout life. Or it could be a short romantic relationship followed by a lifetime of friendship.
There are no rules to polyamory, only the agreements people honour together.
Which is why walking away is not a bad thing: it's a great thing!
Walking away means you've recognised that you all will be even better apart, and that perhaps the seasons of life have shifted such that you may move on.
Fairness In Polyamory and Wealth
I've rarely cared about perceived fairness in polyamory, since life is unfair. There's always ways of framing the imbalance inherent to multiple relationships.
For instance, what about late joiners who develop relationships long after I've achieved financial independence? They may benefit from compounding growth and have an easy path to financial independence when compared to those who struggled alongside me for the early years.
Yet that "unfairness" of faster FI is counterbalanced by the years they "miss out" on. Newcomers will never have as long a time with me that my longer-term partners have had.
Which unfairness outweighs the other? Well, that depends entirely on the people perceiving it and what matters to them.
You have to address perceived unfairness wherever it comes up, and do what is possible to fulfil unmet needs that are uncovered by those insecurities.
That's because fairness is not about getting equal treatment.
Giving two partners a hundred dollars each isn't necessarily fair just because it's equal amounts; some need more, some need less.
Instead fairness is about giving people what they need, within reason.
There's a huge variety of approaches to polyam finances, and I imagine my thoughts will grow more nuanced with time and experienced.
That said, individually focused finances are a great way of scaling relationships up and down whilst still preserving the fundamental right for partners to walk away. Without the ability to walk away, relationships are more fraught for friction and ulterior motives.
Besides that, having a polyamorous commune is both a dream widely shared by the community (though not by everyone!) and a practical way to stack assets faster with efficient living.
Those upsides may make a commune worthwhile, despite all the risks of living in close proximity with so many people.
Entanglement has its upsides, too. I've written about being entwined before in this article I shall call to your attention: