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Here’s an excellent question from a Get Rich Slowly reader.
While I try my best to “get rich slowly” I have one huge issue: a husband. My husband likes to spend money. I’m referred to as the “Thrifty One Who Won’t Allow Me To Buy Stuff” and he’s referred to as “That Jerk Who Buys Stuff”. Do you have any advice for couples that need to have the other half put on a strict budget without making them feel like a child?
The number one topic couples fight about is sex. But the number two topic is money. Kris and I rarely fight about money, and I believe it’s because we keep separate finances. Many people find this strange because they feel that it fundamentally undermines the nature of marriage, but it’s one of the best choices we’ve ever made. This system works for us because:
- We have no children,
- Our salaries have always been roughly equivalent, and
- We’ve found a way to split household bills evenly.
I’ve always been “that jerk who buys stuff” in our marriage. (Though that has changed dramatically in the last two years.) My wife has always made smart financial decisions. Because my money was my money, and her money was her money, my poor choices did not drain her savings. Now that I’m making smart choices, we do have a joint account for use solely as an emergency fund.
What advice do you have for a couple where one person is a poor money manager?
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September 19th, 2006 at 5:21 am
I’ve always liked the idea of a joint account being only used for household expenses, mutually agreed to if it’s anything more expensive than groceries, with a separate allowance for each member of the couple for fun stuff.
September 19th, 2006 at 6:20 am
My wife and I have joint ‘everything’ when it comes to money. She’s the money manager between the two of us and loves doing it. To me, having separate accounts is just asking for trouble because money is too easily spent without the other knowing. We budget what we get each month and where everything will go, so having separate checking would be a bit pointless.
As for advice for a couple where one person is a poor money manager…that’s a pretty obvious answer. Let the other person manage the money.
September 19th, 2006 at 6:54 am
Like Josh Pigford, my wife and I have joint everything when it comes to money, however I am the money manager and I like doing it too. All the dockets for purchases are given to me and I process them as soon as possible. All purchases are written down or tracked by credit or bank statements. All transactions are tracked with categories and classes in a budget. For the budget, I use the 50,25,25 rule as a goal. That is, 50% of your income should go to neccesities, 25% of it should go to repaying debt or savings and the last 25% should go to optional things like dining out, games, toys etc. Things are tough right now and I have found that our neccesities are taking up about 83% of our income. Another thing is to find free hobbies - or YAFHs (Yet Another Free Hobby) - anytime I have an idea of something free or very inexpensive that I think would be fun, I write it down - a YAFH list. It makes for great savings and when you have free time, you always have something fun to do. I have heaps more to say on this matter but I have other fun things to do now - perhaps I will add another comment later. Cheers!
September 19th, 2006 at 8:30 am
My husband and I have semi-joint finances. We have separate accounts plus a joint household expense house. We also track all of our money in one GnuCash account. We both know our full spending profile, but still have the freedom of spending our money how we want. My husband tends to spend more than I do, but as long as he is putting enough in savings, I let him.
While some people can handle completely joint finances, I do not think it should be considered the only way for a couple to manage money. Depending on how the money is managed, it is easy to make one person feel like they are being treated like a child.
September 19th, 2006 at 8:46 am
The way I see it, the split plan can only work as long as you are both bringing in money. When you both retire, and your retirement savings is poor or other savings is poor and your spouse’s is golden, what then? Or the feelings of one spouse retiring 5 years before the other spouse, what happens then? Joint everything, and make sure that the “That Jerk Who Buys Stuff” has a budget item for things they want to spend freely on. Then they don’t feel cheated and the happy household wins. That’s what my spouse did for me before I came into the savings camp.
September 19th, 2006 at 8:51 am
Our situation parallels yours. My wife and I keep separate checking accounts, and we each have certain bills for which we are responsible. I make more than she does right now (although in a year she’ll move up a pay grade and we should make virtually the same), so I pay more of the common expenses than she does (actually the way it works is that I pay the mortgage, she pays the utilities, phone, cable, & car insurance.) We both buy groceries and misc. stuff for the house. Whatever is left over is ours to spend/save as we choose.
We have no kids, and neither one of us is really a big spender (except on books & DVDs).
September 19th, 2006 at 8:55 am
In my experience (advising others), a budget is the key to avoiding problems. If each spouse has a certain amount of license for discretionary spending then there is nothing to argue about, provided that they can agree on a fair amount and stick to it. When you have a saver paired with a spender the trick is to channel each toward compromise and an appreciation of each other’s perspective. The saver isn’t always prudent and the spender isn’t always foolhardy. Sometimes a spender is someone who pays more for durable goods, for example.
September 19th, 2006 at 9:21 am
My fiance and I keep our finances separate and I beleive we’ll continue to do so after marriage. I don’t see any reason for us not to have our own money. We share the bills and keep everything roughly about even though I try to pay for more of the food/entertainment expenses because I make a bit more money.
September 19th, 2006 at 10:42 am
For those of you contemplating marriage, you had better have a long hard talk about money matters before the ceremony. My wife and I had several hours-long discussions about this before the marriage. You need common goals and priorities. You are going to be together a long time (hopefully), so talk about it.
Since the couple in question is already married, I would suggest tracking all expenses per person for two months … and then taking a long hard look at the results. What has contributed to long-term growth for the couple? What has been spent on “depreciating assetts” (beer? video games? the latest fashions?)?
You need to come to some sort of agreement about a budget. If one person wants there own spending money - especially if they are a stay-at-home parent - I can understand that. But all finances should be transparent in a marriage (exceptions for birthday, anniversary, and Christmas purchases!).
You should be doing everything possible NOW (especially if you are in your 20s at the start of your careers) to build savings, fund Roth IRAs, and eliminate credit card debt. This will be a lot harder to do if children come into the marriage later. If you can agree to live on a modest monthly budget, and commit to banking/investing any extra funds later as salaries increase, you will be using time and interest to help yourself over the long term.
Get into these habits now - it will be a lot harder if you wait until you are in your 40s!
September 19th, 2006 at 10:50 am
My partner and I have separate “personal” checking and savings accounts, but a joint “household expenses” account and a joint “emergency” savings account.
It works out well in that the necessities are taken care of, but there is no judgment or guilt on personal spending. Also, we agree to never use credit cards.
I make more than she does, so here’s what we did:
1) Total the amount of monthly take home pay, divide by each person’s paycheck contribution, get percentage. (Say 70% me, 30% her.)
2) Created a master budget of monthly expenses (taking into account yearly things that should be saved up for: auto tax, chimney sweeping, etc.) and total. (Say $3000 per month.)
3) Each person contributes their percentage towards monthly bills. ($2100 from me, $900 from her.)
4) Each person also contributes 10% to an emergency savings fund.
5) The leftover is for personal spending or saving.
6) Resume arguing about sex.
September 19th, 2006 at 12:01 pm
Lots of great advise. I wish I read it in my twenties and not my forties. I have heard it is never too late to plan. I hope this is true. I also like Becks suggestions for the split of finances.
My girlfriend and I have separte finances, but also have some accounts, mostly business, that are joint accounts. Sadly, we both seem to be the Jerk who spends. Although, we are both getting better at saying know.
Arguing about sex…never
September 19th, 2006 at 12:13 pm
Both take a personal finance class at a community college, if neither of you has already taken one. That way you will both be on the same page when arguing the merits of different financial choices. Financial knowledge has a huge impact on a couple’s decisions and management of money.
September 19th, 2006 at 4:56 pm
Suggestion #1: Talk about it. Talk about money. Talk about goals. Talk about priorities. Talk about absolutely everything and how your finances are impacted. See where you can agree to make changes - and also see what’s working.
Suggestion #2: The poor money manager probably has some goals he/she’d like to reach. The poor money manager will probably get on board with more behavioral changes if he/she can see how it benefits meeting those goals. This is an opportunity to come to agreement about how to manage any joint finances that will be impacted.
Suggestion #3: Even in the case of joint EVERYTHING, separate personal allowances (in cash or in separate accounts) for blowing on WHATEVER are helpful. The poor money manager will probably blow his/her allowance very quickly at first, but it will be an interesting lesson about the finite nature of money.
FWIW, Hubby & I have joint finances, I’m the money manager, but we are free to have separate stuff if we want. I have done so, he has not. We’re both okay with that. And having cash allowances has really allowed us to stay on target with the rest of our financial plan.
September 20th, 2006 at 9:25 am
I have been dealing with this very situation for almost 13 years now. I am a saver and my wife is a spender. Somehow we have managed to buy a house and keep our heads above water, but sometimes I wonder how.
When I try to discuss money with her, she views my efforts as a personal attack against her, and immediately goes on the defensive. When I tell her we can’t afford something she thinks we need, she tells me I’m being ‘pessimistic’. We tried a budget once, but we couldn’t agree on the purpose of a budget… she thought it was just to track how we spent our money, not how we should spend our money. We tried cash in envelopes for a while, but she liked to use her American Express card at Costco, and that shot things all to hell.
We actually were out of debt (except mortgage and car payment) about four years ago, with a reasonable savings account (which was quickly depleted by my wife’s maternity leave). We have made several ill-advised purchases since then, and have managed to wrack up more debt. We have gradually chipped away at that debt, and hope to have it all paid off by April of next year… if we can stick to our new ‘spending plan’.
About six months ago, my wife received news that she would be cut back to 2 days a week at work (she had been working 3 days a week). She had wanted to spend more time with the kids anyway, so we agreed to make it work. We were supposedly going to begin a gradual spending reduction to prepare for the actual cutback, but after viewing the July bank statement, I realized that we had not done so. We were still spending more than we were making and something had to be done.
Once more I attempted to have a financial discussion, but this time I repeatedly reinforced the fact that a budget was needed if we really wanted to accomplish our goal of having her home with the kids an extra day a week. She thought it would just be easier if she worked another day a week somewhere else, but I refused to give up so easily. I showed her the bank statements and she finally agreed that having the ‘debits’ column higher than the ‘credits’ column on every statement was not going to work. So, we implemented a budget (later called a ‘spending plan’ because it sounded better to my wife).
I made up a budget in Excel, complete with a breakdown of different spending categories. I started tracking our check register in Quicken because it was easier (and more accurate) than trying to use a hand-written register. I enter every debit and every credit at the end of the day… waiting until the following day to enter them only leads to financial irresponsibility, and I am determined to not let that happen again. If we need to go shopping (for anything) we check the budget to see how much is available to be spent. If it isn’t in the budget, we make do with what we have or we wait until the next month.
It took having our backs against the wall to come around. We always had enough disposable income in the past that we knew we would eventually pay for our over-expenditures. But that is no longer the case, so we have no choice but to change our ways. I am confident that once things are paid off, we will be able to save/invest/prepare for the future… but only if we both agree to stick to our ‘spending plan’.
September 20th, 2006 at 5:47 pm
[...] Get Rich Slowly has a nice post on how to avoid fights amongst married couples. He notes that him and his wife have separate accounts for each other. This is a good idea if you both make a similar amount of money, but for some of us, this isn’t possible, because our levels of income are so different. [...]
September 20th, 2006 at 11:52 pm
I’ve found three key things that have helped my wife and I negotiate our personal finances as a couple:
1. Agree on and follow a pre-determined, published system.
2. Always budget “personal” money as generously as you can afford. This one addresses the issue of the “jerk who buys stuff” and gives him or her a way to spend without getting in trouble.
3. Don’t talk about finances for more than 30 minutes at a time or after 10pm at night.
Pretty simple, but effective.
September 21st, 2006 at 10:30 am
My husband and I have yet to have an argument about money and we’ve been married almost 2 years. When we first got married we sat down and went through all the expenses and created a budget. I handle all of the day-to-day stuff and once a month we sit down for a review of where we are on savings and paying off debt. Also we review any tweaks to the budget, like the next three months we’re paying a little less on debt so we have money available for holiday shopping. We have joint checking and savings accounts, and he has a separate checking and I have a separate savings. We each get a monthly “allowance” that we are allowed to spend as we please without having to report to each other. We discuss all major purchases before they are made.
I know we’re lucky because our spend/save mentality is pretty similar, so there’s never anything to fight about…
September 23rd, 2006 at 10:23 am
[...] On Tuesday I posted a survey regarding money and marriage. How can a frugal spouse cope with a spendthrift spouse? Stephen wrote: I have been dealing with this very situation for almost 13 years now. I am a saver and my wife is a spender. Somehow we have managed to buy a house and keep our heads above water, but sometimes I wonder how. [...]
March 25th, 2007 at 7:56 pm
I appreciate all comments regarding husband and wife teams and spending money. I was looking for permission to open my own separate checking account, as we’ve always equated the joint account with being married jointly. My husband makes good money, but is a procrastinating money manager. He can go a whole month spending, but never entering debits into our electronic register. I may skip a few days, usually we have enough to do this, but I will balance the checkbook by once a week and by the end of the month. It is important to me to close the month. We have argued about money alot in the past. Husband needed to take a business trip, procrastinated on entering debits, bought airline tickets, but didn’t account for rental car or hotel. Scrambling at last minute gets on my last nerve. Thank you for helping me decide on an account for myself. Will be transferring in for household account, but keep my account up to date, how I like to do things. Maybe there will be financial peace in our house after all.
May 4th, 2008 at 10:01 am
8 years into marriage and still working through
the saver/spender dynamic. I make less and spend more than my husband and this is stressful for me sometimes.
My husband is frugal, independent, consistent and remarkably disciplined in his spending and saving patterns. I tend to get out of balance with my personal spending from time to time and have almost always had some credit card debt.
My family lives far away and I have many more extended family members I keep in touch with and exchange gifts with for birthdays and holidays. Travel, gifts, weddings, phone bills haven’t been consistently budgeted for, and my credit card bill is not paid in full every month as a result. We pay the budgeted amount and sometimes I dip into my savings. It is my achilles heel of spending, but I generally feel really good about how I spend it.
My husband and I get along well with a few basic rules: bills get paid in full (except my credit card) and on time and we always maintain a $1000 in checking account. I budget, track bills getting paid, pushed for refinancing when rates were low and higher interest on savings.
I have to work a lot harder to protect my own finacial interests in our relationship. Most things I do are mutual goals: save more, pay down the mortgage and other debt, and max out 401k. Insisting on a higher term life insurance policy was a harder sell, because he couldn’t fathom the idea that I might need it. I would and it gives me tremendous peace of mind for a small amount of money.
People in spender/saver relationships have to protect themselves and each other for long term happiness.