I think a lot of you may be able to relate to this one ;) I know I’ve dated plenty of people in my past who spent, or saved, differently than myself at the time. It never got to a point where it made a difference (cuz we of course split up), but when you’re married it’s a tooooooootally different ball game. And hopefully everyone knew about their significant others’ habits too before tying that knot! If not, that’s a whole other blog post, haha… and sadly not that rare.
But anyways, today let’s help out a fellow reader of the site and see if we can help steer her in the right direction. I know we all have different ways that work for us, but maybe one of them will click for her? Getting new perspectives always helps :) Here’s her concerns:
Hi J$,
I need some advice on dealing with finances with my husband. We’ve been married for a year now, and we still have issues with finances. We have different styles when it comes to money that don’t seem to mesh.
I’m a saver. I always tell him when I make purchases or if I pay more money on balances we owe (which isn’t a lot as a young married couple… we have $5,000 in credit card debt and my student loans don’t kick in for another year). I try to make good financial decisions and read all the time about making good decisions with money.
He, on the other hand, is a big spender. He doesn’t always tell me he has made a purchase; I usually find it on our joint checking account later and have to confront him, which I hate doing. He spends often on himself, buying clothes he wants or things he thinks he “needs,” and doesn’t really seem to think long-term or that I might want or need things, too.
I try really hard to talk to him about money, but it can be challenging. I want to make a plan that we stick to, but have a hard time knowing how to approach him with it. We want to buy a house rather than living with family eventually, but with the rate he likes to spend on himself, I don’t know if it will happen.
What should I do?
Yikes! One thing I will say that REALLY helps us out a lot (I tend to splurge more than the Mrs, if you can believe that), is that we have our own separate “do as we please” funds set up. That only we can touch and do with however we want – no questions asked. It’s not a lot of money (unless you just save it up for whatever), but it REALLY gives you that freedom that spenders like to have sometimes. And it’s only a side account, so you still have your major combined accounts to pay for a new home, or food, or just life in general. Some people say they don’t like it cuz it’s kinda “secretive,” but if both people are on board, and it helps him to continue to be free while relieving you of some stress (and nagging him), it may be worth a shot ;) Even if you just xfer in $100 a month or something like that – the ability to spend w/out being judged could do wonders!
I also think some good communication is needed too – that’s the base of *everything* in a marriage, which I’m sure you’ll agree. The trick is figuring out a way to talk about things easier (maybe w/ a glass of wine? Or 5? Haha…), and then consistently working at it. It would actually help squash a lot of OTHER problems too that may come up – or maybe money’s the one thing y’all really struggle with? Either way, that’s my 2 cents – I’m sure the others will have a lot to chime in about ;)
What do you think, guys? Have you been in this spot before? Have you figured out something that works? Help a friend out! :)
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(Photo by laughlin)
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I would recommend setting common goals so your husband has a vested interest in saving money. A book that helped me when my husband and I first got married was “Your Money or Your Life” ( http://thefrugallery.blogspot.com/2011/11/book-review-your-money-or-your-life.html) It walks you through setting goals, examining priorities, and setting a budget.
If he’s the spender in the family and you approach him with a budget he will take it as an attack on him and feel like you are blaming him for problems with the finances. The best way to start the conversation is to agree on a few key goals that both of you want in the next 5-10 years. For instance, 1. Pay off the Credit Card, 2. Pay off the Student Loan, 3. Save for a home purchase.
Then work through what it will take to reach these goals (save X amount a month for 10 months ect.) and review your actual spending habits. It really shocked me when I first did this and realized that as a couple we were spending a ton of money at restaurants/bars and grocery stores. I mean how much can two people really need to eat!?!
Then start slowly eliminating excesses from your daily habits and set goals in those categories. I agree it will help if you also budget in some money that doesn’t have a specific purpose for the each of you to spend as you please to quell those splurge urges.
Hang in there and try to get some quick victories to really get the both of you motivated. Once that first debt is paid off and you can check that goal of the list you will be surprised at what you and he will be willing to sacrifice to achieve your goals!
I don’t know, but best to get this sorted NOW. Try everything you can, but most important is that you talk and can trust each other with your futures. My parents are in this boat, but 40 years later. My mom has had to take away my dad’s credit cards away because he was running them up without telling her (and they don’t have the money for that; she’s the only one working; he’s disabled). It’s gotten really bad–whenever she goes out of town for work or whatever, she leaves him a credit card for emergencies ONLY and he charges $10K+ on random stuff EVERY time. He then goes to the mailbox before she gets home from work and hides the cc bills from her, like she’s not going to find out about it. She’s so upset every time and he keeps doing it. I can’t stand it. He’s lying and it’s horrible. Anyway, cautionary tale to nip this in the bud and set rules, like you have to consult each other for purchases over $XXX that aren’t out of your own discretionary spending accounts. Let him know you’re upset and worried about this NOW instead of when you’re in a tight financial spot (and they will happen, just as bonuses and happy financial times will). If he can’t respect your feelings as newlyweds, there is a problem that will only get worse. Maybe, too, find out what his $$ goals are (kids, buying a house, a vacation, early retirement, whatever) and use them as motivators?
Sorry for the foreboding, depressing story, but I don’t think it is that rare in these days of high divorce rates. Good luck!
Your “father” is not disabled, it is a mooch. Mom needs to kick the leech to the curb.
Definitely do three things:
1. Put all of your accounts into something like mint.com so you can figure out your *combined* spending habits. Just leave it like that for a while without taking further steps so you can collect a few months of spending data. Sit down with him one weekend and ask him to categorize any purchases in mint that don’t get automatically categorized – he might not realize he is spending $500/month on clothes or $100 on music downloads, but when he sees it accumulated into one location, he might even admit that yeah, that’s a lot.
2. Create a realistic budget with those numbers (ie look at what you actually spend on average on groceries, loan payments, rent, utilities, etc). My favorite budget spreadsheet (it is incredibly detailed and customizable and leaves a little buffer room for month-to-month spending fluctuations) is “Within Your Means” by Leisureguy (download it at: http://www.lulu.com/content/1581272). When you go through the budget process, also figure out what amount you want to be saving every month (start with the emergency fund, then move up the house fund, etc).
3. Put only combined expenses (savings goals, rent, utilities, groceries, etc) into the combined account. Any other money stays in individual accounts. He can spend his “allowance” on whatever he wants every month and you can’t give him crap about it (unless it is on hookers and blow!).
If you create a budget but still leave room for individual spending (no strings attached), he won’t feel quite so trapped and will be more likely to go along with the plan.
That said, don’t expect your first few discussions about this to go smoothly. There will likely be frustrations, accusations, maybe even tears. Just remember that you need to keep the cool head, since you are the one that wants to change his habits. No finger pointing, no accusations over past spending. Start with a clean slate and only use the past to come up with recommended spending amounts for the future.
Good luck!
I agree that you should each have a little bit of fun money. My husband tends to spend a little more than I do, but he has come around to my point of view. We have a really tight budget, so we each get an “allowance” of $35 a week to spend on whatever we please. It isn’t a lot, but it allows us to buy what we want without any guilt.
I am in the similar boat as you. I am a saver, probably an over saver, while my old lady is a save/spender. She likes to have a goal (like a vacation) save for it and spend. She also splurges on clothes (read: shoes) a lot more than I do. Now it isn’t like she is buying designer brands, its just lots of shoes.
Our system is a “yours, mine and ours”. The “ours” is where the bulk of our paychecks go. This is used to pay our joint bills, and save for our joint goals (ie. vacation fund and house repair fund). The two individual accounts (which neither of us has access to each others) is where we can blow our money on whatever we please. I might give her a dirty look for buying more shoes, but I can’t be mad because she used her money to pay for it.
Our parents don’t really understand the system, but it works for us. Of course with a baby on the way we are in the processes of revamping the entire thing.
Good luck! Have the talk about you finances, it may not be the most fun talk, but once you get on the same page (you may have to get on the same chapter first) things will be much much easier, I promise.
I agree with J$…if both parties are on board, different accounts can work wonders. My husband and I have been married for nearly 5 years, and this is our breakdown: my checking, his checking, joint savings and one joint credit card. It works great for us for two big reasons. First, he travels for his job (gone ten days out of two weeks) and may need to buy something large at the drop of a hat. Second, he makes about twice what I do. Add to that totally different spending habits, that sets us up to operate better this way. When bills come due, there are some he always pays (house) and I always pay (daycare). Other than that, we split them on a case-by-case basis. Since I don’t travel, I keep everything sorted and ready for those sit-down sessions.
Long story short? It’s all about you two having a real discussion and finding YOUR balance. And get it figured out now so you can enjoy married life.
I would recommend you sit down and talk about each of your financial goals. You both spend money differently, because maybe you both have different life expectations. I know when I sat down with my wife and talked about her money goals, I was surprised to hear that she just wanted to enjoy making money for a year or so. This was her first year making good money, and she wanted to enjoy some of the luxuries of making a good salary.
Sometimes all it takes is a little give and take to figure out what the other person wants and what you can agree on together.
Both of you read Dave Ramsey’s Total Money Makeover book – even if you don’t follow his steps it will be the start of a great conversation about your future, goals, etc.
I agree that each of you should have some fun money!
I also agree that you guys should be talking about this consistently – and to make your budget meetings fun, hold them while you are both naked! It’s hard to argue when you’re naked:)
I second J’s advice. That’s pretty much what my wife and I do. We have joint accounts for joint bills & savings, and I have separate accounts. $100 each week plus whatever I side hustle goes into my personal savings account for me to pay off my pre-marriage debts and spend on whatever I want.
Ha! Den – your clothing free budget meeting suggestion just made me literally laugh out loud! Awesome idea.
My husband & I are both on the same page about things, and we have joint accounts.
Although I do all of the managing the money & paying the bills, we talk about all of it as it is happening so he is not out of the loop.
But one big downfall to not having some money tucked away separately is this:
I never get Christmas presents or Birthday or Valentines…whatever…without knowing about it first because I see everything coming & going. This sucks! No surprises :(
Now it is not like I expect big expensive things…but I have the ability to buy stuff to surprise my family but they have no way to surprise me because I monitor it all.
So you never know…maybe your significant other will choose to spend some of that money on you, so it is not a bad idea! (But everyone is different – and I know that my EX husband would blow any extra money on stupid stuff & have nothing to show for it in the end. That is why he is my EX!)
The budgeting spreadsheet I recommended in my comment above has moved to a different location.
Instead, it is here (under the link with text “an Excel workbook”):
http://leisureguy.wordpress.com/2006/12/10/managing-money-with-excel-workbook/
It was this budgeting spreadsheet that helped us go from $0 in savings to over $40,000 in savings in just a couple years.
I agree with others that you need to have common goals. I would not suggest having a several hours long budget meeting, though. Usually people who spend freely don’t want to think about where the money comes from for that spending. :) I would bring up your saving for a house goal in casual conversation. Something like, “I’ve been thinking that if we save $X per month, we can have a downpayment for a house by X date.” See if you can come to an agreed upon amount (probably less than you, as a saver, would like). If he agrees, start transferring the money out of checking into savings every month. Then when the money isn’t in the checking account, he can’t spend it. If he is spending with the credit card, you can show him that you can’t meet your monthly savings goal and pay the credit card bill too. Don’t expect him to come around to exactly the way you are thinking. It’s about compromise.
My BF and I are very similar. I like to save, whereas he wants to spend, spend, spend.
What I’ve been doing (that has been working) is I annoy the hell out of by talking about our finances all the time. So whenever he says he wants something, I give him a long boring lecture. So now he doesn’t want to hear depressing money lectures, so he doesn’t spend anymore!
Probably not the best way to go about it, but I just had to keep reinforcing in his head that having money is better than spending it all.
This is me and my husband to a T. We tried a separate fun money account for him, but it ended up being grossly mismanaged when I found out he was charging stuff on a credit card and paying it off little by little from his fun money account. Yeah, those were not good times. BUT I have realized that he doesn’t do it to spite me, he is honestly just really bad with money. I handle almost all of the money, and he is not allowed to carry around credit cards. He is on an ATM-only basis. he gets his fun money in cash once a week. We’re pretty broke most of the time so we can’t afford a big budget for him to blow money as he pleases. There have been points where I get really close to just both of us having our own accounts, and he knows he would be screwed because I make more than 2/3rds of the income.
Essentially–we used to fight a lot about money the first year of marriage. Now into our second year, we’re still getting the hang of it. Don’t despair : )
I’d say the first they should do is sit down and talk about their financial goals. Do they actually have different goals, different philosophies towards money, or is he just bad at executing those goals?
In my case, my husband and I are both in favor of living below our means and saving for our goals rather than going into debt to get what we want. But left completely to his own devices, my husband isn’t so great at putting those ideas into practice. His heart is in the right place, but he’s just not very organized. I’m more organized and generally better-versed in personal finance stuff, so we set our financial goals together, but I’m in charge of enforcing them.
I track our spending on a spreadsheet to make sure we stay within our budget, I let him know if we are in danger of going over budget in some area. And we sit down periodically to re-evaluate our budget and see what is and isn’t working. Even though I’m in charge of balancing the checkbook and paying the bills, I make sure he’s always in the loop. Communication is definitely key.
What definitely helps is that we each get a cash “allowance” each month of about $100. We can save it or spend it, but we don’t have to be accountable to one another for where that money goes. It gives us much needed “breathing room” when it comes to our finances, while preventing us from overspending on frivolous crap.
But really the best advice I can give is to make sure you come up with a plan you BOTH agree to. If he feels like he doesn’t have any input, he might resent you for it and it might be harder for him to stick to the plan. That said, stand your ground on any part of the budget that is REALLY important to you (for me it’s making sure at LEAST 10% of our income goes toward retirement and that we keep a minimum of $10-15k in an emergency fund).
Yep, dangling a larger carrot than that new shirt he thinks he need may be the answer. Oddly enough, when my husband and I started dating he was the saving and I was the spender (although I didn’t have a lot to spend). However, now that I have taken responsibility of our budget it frees him up from having to worry about how we are going to pay the bills and he spends much more freely. What a headache!
I’m late to the party on this, but I’ll share what we do anyway.
My husband and I each get $20 of personal spending money a month, plus any birthday or Christmas gifts go in our personal funds. This amount works for us, but my best friend and her husband do $100 a month. In both cases, the effect was the same: The spender husband suddenly become very frugal because he was able to keep his remaining balance in his head and wanted to be strategic about how it was spent. And the saver wife let her splurge a little bit because she knew it was in the budget. This means no having to justify purchases to each other. But the rule is clear, that if you spend money outside of your personal budget, it has to be something that’s in the family budget already (groceries, bills, etc.) or you have to clear it with the spouse first.
Also, we use Mint.com to aggregate all our accounts and create a standard budget. I check it every morning as part of my routine so I can catch any funny charges and call the bank immediately if necessary. If something I don’t recognize comes up, I’ll ask my hubby about it first and usually he’ll either say it was his personal spending, or it was some other thing I knew about that just came up with a weird name. If it’s not something we’d planned for, I will usually ask very mildly, “OK, and which area of the budget should I take that out of?” If he hadn’t thought about that, then either it has to come out of his personal or we have to look over the budget together and figure it out.
It takes the pressure off me so I never have to nag him, because we have a clear and fair system that allows for both our needs and wants.
I like using a basic excel spreadsheet to keep track of debts and the budget. I like shpreadsheets, but don’t recommend it to anyone who hates that sort of stuff. There are a lot of ways to keep track of a budget, so pick one you both like and go from there.
I do, however, recommend having an allowance and in cash. Both my husband and I can do what we want with the money and no one cares. I like it because I don’t feel bad about not saving every dime for school and he likes it because he can splurge on fun stuff. Some months we end up spending it all on each other, but it is still ours to do whatever with.
One way to rein in the discretionary spending would be to set up a separate fun money account via ING or another online bank that offers a debit visa/mc card – if this couple can sit down and agree to a budget of monthly fun money, then this amount can get transferred into the separate account once a month & the debit card can be used for those purchases. Once the fun money for the month is gone, it should stay gone until the refill the following month; the two business day time-frame for money transfers should help to cut down in impulse transfers/spending.
In the specific situation that this reader presents, one more step may be necessary…I’d recommend setting up separate online accounts so they each have their own discretionary budget and their own, separate debit card. This will help keep the spender half of the couple from spending the saver’s portion of fun money, helping to keep things a little more fair.
After performing what I’ve called financial gymnastics for many years, I finally have gotten to a point where my husband and I can have some really good money discussions. I’m definitely still more of a saver and he’s more of a spender, but in doing some breakdowns of our financial situations and what I considered good financial goals, and in communicating those to him in a way he could actually process and digest, we’re in a considerably better financial situation than we have been since we got together umpteen years ago.
In all honesty, the most important thing here is to have a very honest and possibly harsh conversation (or several) about money and spending and goals. When one partner feels that the other is being selfish in their spending and not considerate of the other’s needs or wants, it can lead to situations much more uncomfortable than these difficult money conversations…you don’t want to build resentment, debt, or distrust.
one more thing about going with online discretionary spending accounts…while I normally swoon over the idea of multiple online accounts (I have quite a few earmarked accounts along with a HOLY CRAP and checking account at ING), in this reader’s situation, I would NOT recommend having additional online savings accounts tied to the discretionary accounts at the online banking institution. I can do ING transfers from savings to checking in a click and this instantaneous access to additional cash would be a no-no in this situation.
Sorry I’m so late! Something that helped me and my guy out was when he was spending all the time, at first I would try to find money to cover costs (cut groceries, laundry, etc) as he spent all the excess. So annoying. Eventually, I was so frustrated that I gave him the numbers: our income, our bills and when they were due, how much I wanted to save and how much to pay off debt. Then I left the room and let him make a budget–only coming back when he would say he was done and gently reminding him of groceries or gas or some other small thing he had forgotten. This way I wasn’t attacking or confronting him–he was helping me out. When he was done, he looked at me and asked me how I did that every two weeks. We talked about setting up personal money–we each get our fun money every two weeks and that has helped. Ever since then he has been on board with me. Hope this helps!
The Wife and I do a similar plan to what J talked about – and what really helped me (The Wife’s eyes glaze when a finance conversation gets too complicated) was creating a flow chart:
http://www.myjourneytomillions.com/articles/my-familys-cash-flow-chart/
That sort of thing may get him involved
THANKS EVERYONE!! This is great – you all are so GOOD (and awesome for taking the time to write all this out and think about it for her – I love y’all!). I’m gonna make sure she’s seeing all of these too – I know it’ll help out!
Keep ’em coming!
It might be useful to sit down every few months and make a list of things you want/need to buy. For example, the conversation might work like this: You’d like to buy new running shoes ($100) and get your hair done ($150). Your husband wants to buy a new jacket ($75) and a plane ticket to visit a friend ($300). You (as a couple) need new tires ($500). After you’ve made the list, you can discuss when it would make sense to make these purchases and adjust the amounts you are spending on each item if necessary.
It sounds like he feels like he has the right to spend money on himself, because he earns money (which he does). It also sounds like you resent him spending money on himself unnecessarily when you are sacrificing and trying to save (totally valid as well). Having these conversations about the things that you both need/want might help him to see that a) there are things that you want too, b) some months he just spends way more than you or vice versa, and c) some months there just isn’t enough money to both get *everything* you want. This way, at least you’re communicating and everything is out on the table.
Good luck!
My husband and I have separate “Do As We Please ” funds, and it works well for us. My husband is a thrifty accountant and I’m a trying-to-reform spendaholic, and it used to cause a few arguments early in our marriage. Now I have my own credit card with a $5000 limit (that is nearly up to the limit!) but my husband doesn’t worry about that as I have to bail myself out of that one. In the meantime, he has our major finances well under control.(I don’t touch the account that looks after them).
We do have our own sort of “do as we please” money, it’s not much but it helps a lot. I’m a big saver and he is a sucker for new gadgets, so I usually end up buying some stuff for him ..err for “the house” (like that beautiful portable blu ray player he wanted for our child for the long road trips we make twice a year or the PS3 for our bedroom, or the tablet he absolutely needed along with the kindle, ipod, iphone, ipad….you name it!)
I may be totally off here, but isn’t the money someone earns theirs to spend? I understand being married and all, but at the end of the day, as long as bills are covered, what someone does with their own money is their business, married or not.
I would be super resentful if someone told me what I could and couldn’t do with my own money.
J. Money and Question Answerers,
Thanks so much for posting my question on your blog! I loved seeing that we’re not the only ones going through the whole figuring out finances as a married couple thing. :) I think my favorite comment was about having budget meetings naked haha.
This is a topic that many couples struggle with! In our relationship, I’m the one that tends to be the spender and my husband is the one that’s the saver. I really think it’s important for you two to talk and agree on your goals – both financially and emotionally. Those are hard conversations to have, but if you don’t have them (and you’re still having these issues), I guarantee that you will both end up frustrated and resentful of each other. (Not good!)
Here’s what works for us: We have three checking accounts, his, mine, and ours. Our paychecks get deposited into our individual accounts. Then we each put a set amount each month into our joint account (a percent based on our salary, so for us it’s 60/40). All bills are paid out of there (mortgage, utilities, student loans, phones, etc). That way, all of our bills are automated and there is always enough money. In your situation, you would also want to have savings (for retirement or your emergency fund or a travel fund) pulled out of there. Since you have credit card debt, you two will need to make a payment plan and put that money into the joint account to be automatically paid too.
Your husband can then spend what’s left in his account – but only with a debit card or cash (no credit cards!) As a spender, he needs to reign that in. (I speak from experience here! Cash only has helped me immensely). This year, we’re doing the Great Debt Snowball of 2012 and paying off $25,000 in debt this year. It’s not easy, but our relationship and our finances will be so much better for it.
Awesome! Let us know how your Great Debt Snowball challenge goes! Love goals like that :)
Being the casualty of a divorce that had a lot to do with financial strife I highly recommend finding a solution that works for you both. I tried the open and honest policy to no avail. Ended up taking on debt that wasn’t mine and being awfully resentful…particularly when habits were not reformed. I don’t think you can emphasize enough the importance of being on the same page or at least having an understanding early on. These problems may seem insignificant in your 20s but in your 40s, 50s, 60s take on a whole different complexion in marriage. That’s my two cents. Good luck.
My husband and I are opposites as well. He spends, I prefer to save (though I do splurge on luxury items every now and then). We’ve had our finances combined even before we got married (we lived together and knew marriage was in the cards). The best thing for us has been to do it like this:
1. A joint account for bills, groceries, gas, mutual entertainment & dining out, and our paychecks.
2. Separate “allowance” accounts. We each get $100 every time we get paid ($200/month each) to spend whatever we want on whatever we want, no questions asked. It has been a blessing to do it that way.
3. A joint emergency fund, but separate other savings accounts. It’s important our emergency fund is accessible to both of us in case one of us is in a bad position. But then we each have our own separate savings. My husband typically spends the money in his savings account when his allowance account is low and he wants to buy something. I typically let my allowance account and savings account accumulate until I really want something, aside from the usual iTunes purchases and the ocassional lunch out. I also use my savings account to buy gifts for our parents or friends.
4. A separate Christmas savings account. I keep our Christmas money separate from him, because I don’t want him tempting us to spend it, whether for new tires on his Caddie or on a video game console (he used our Christmas savings to buy a Wii two years ago… I was not happy). If it’s away from him and our joint checking account, it won’t get used.
5. Joint “misc” account. This account is set up for us to “budget” for upcoming expenses, like new tires, oil changes, vet visits, car insurance, or recently, my cavities that had to be filled. I like to keep it separate from the emergency fund so it deceases temptation to dip into the E-Fund. I transfer money from our joint checking to this fund about twice month, depending on what upcoming expenses we have awaiting us.
I know it sounds like we have a lot of accounts, but keeping things in separate accounts really helps me budget, save, and see where our money is going. On my iPhone, I use an app to track the spending in our joint account and I like to tell my husband how we’re doing, as far as how much we’ve spent on groceries this month or eating out or gas. He enjoys seeing the numbers and it keeps it in persepective for him because he’s very hands-off when it comes to our finances. “Sorry honey, we can’t go out to eat this weekend, we’ve already spent $200 on eating out this month,” then showing him the pie chart in the app really helps!
My husband is a big spender, while I am a saver. When we first got married we made a deal – if we spend more then $50 on something besides groceries or gas we discuss the purchase FIRST. Maybe you want to work with a different limit, but this has really helped us.
Thanks for sharing all this guys – I know those in similar situations will really appreciate it :)