My husband and I could not inhabit opposite ends of the spending and saving spectrum. I’m a compulsive saver. I put away more than 20 percent of my income in 401-Ks, IRAs, 529s, stocks, and other investments.
Yeah, I know. It borders on neurotic, and that’s a kind assessment of my personality.
My husband's utopia
My husband? He’d like to take a week long ski trip this winter, go to Belgium this spring, buy a new dishwasher, and get furniture for our living room, among other things. He thinks money grows on trees.
How can a compulsive saver make peace with a spender? I’ve offered my own advice on this topic. See How Not to Fight About Money. Today Bradley A. Johnson, a financial expert who blogs about investing at Investing First Steps offers his take.
In many relationships, one partner is a spender, and one is a saver. Conflict between the two generally flares up around the holidays (you just spent how much on gifts?!), especially during recession (even though I might lose my job?!)
Can you get through the holidays without a crisis? Yes, but you must remember that you differ in how you define comfort. One of you finds comfort through physical goods and immediate gratification; the other finds comfort through adding lots of stuffing to a financial cushion.
Neither one of you is necessarily wrong. On one hand, neither one of you wants to end up penniless at age 65. On the other hand, if you both save and never spend, you could miss out on unique and exciting life experiences. Relationships are built on compromise. You need to find a way to spend on things and save some too—so you both are comfortable in the moment—as well as long term.
If you are a saver
Everyone (even your spendthrift partner) agrees that it’s a good idea to eliminate consumer debt, invest in your retirement and your family’s future, and keep a solid financial cushion for emergencies like…say…a recession.
How do you get your partner on your side? You don’t, because I’m willing to bet you don’t always practice what you preach. If you were a pure saver, you would live in the cheapest apartment available, take only public transportation, never eat out at restaurants or buy electronic equipment, and so on. You probably spend money for certain immediate comforts, and your justifications aren’t necessarily any more sound than your partner’s.
What to do:
* Work with your partner to find ways to merge efficacy with comfort. Your role as the saver will make your purchases seem more important and worthwhile. After all you don’t want to buy something very often. When you do, it must be important, right? Not necessarily. Make sure that your status as the responsible saver doesn’t turn into a license to decide what’s worth buying without input from your partner.
* Question whether something has a legitimate benefit before you lobby against spending for it.
If you are a spender
If you’ve been watching your 401-K plummet in value, you might think something along the lines of, “Why did we blow all of that money in the stock market. We’d at least HAVE something if we had spent it on something tangible.” That thinking is flawed, though. Whatever you would have bought would have likely also reduced in value—eventually to nothing. Your 401-K will eventually grow in value again. That furniture will eventually end up at a thrift shop. More important, whether you blow it with a bad investment or blow it with an expensive toy that you eventually no longer care about, you’ve still blown it.
Every financial guru you’ve seen on TV (and whose book you promptly ran out to buy…ahem…) has told you that you’ve got to pay off your credit cards and get yourself some savings already, but do you have to wait until retirement to spend a single dollar? No, you don’t.
What to do:
- Work with your partner to determine what purchases actually benefit both of you, along with your bottom line.
- See if spending (e.g. a well-earned vacation) can be used as a reward for saving.
- Build into your budget—and stick to—a modest “miscellaneous” fund. Knowing that you have a category for impulse purchases in your budget means there are no surprises when the bank statements come through the mail slot.
- Participate in your partner’s investment decisions. Even if you leave the final decision to your partner, you are still making a decision to let your partner handle it. That means there’s no finger pointing if the market turns against you, or your house doesn’t turn out to be the moneymaker you expected.
It’s all about compromise. Determine the most important purchases for each of you, and build a modest budget that satisfies everyone. It is important to remember, however, that the savings plan has more long-term benefits and should be given precedence. At the same time it should not be a mask for tyranny by the saver to be the ultimate arbiter as to which comforts are and aren’t worthwhile.
Loading ...Are you a frustrated spender who thinks Bradley just doesn’t understand? Are you a saver who thinks your partner will never save a dime? Leave a comment or question for Bradley, and he will respond.
Tomorrow: 15 gifts your man will love–and they cost almost nothing.
Wednesday: A man who won the lottery tells us what we all want to know: is money the key to happiness. And he’s giving away a free MacBook Pro. Gotta love that.
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{ 9 comments… read them below or add one }
Any advice on how to get the spenders to really internalize how critical it is to save–especially right now?
And how do you get someone who knows very little about investing to understand the basics enough to give intelligent input on family investing decisions?
Thanks! Great blog!
Number one cause of divorce: money. This issue trumps sex, child rearing, and even fidelty. Agree to a budget, merge your money, and be completely up front and honest about the whole thing. I was married to someone who decided when I was out of work due to illness to start keeping a ledger of what money I “owed” her because I was unable to contribute. At the end of six months, she presented me with a “bill.” Needless to say I felt betrayed and let down. A marriage can’t exist successfully if there is “debt” between the partners. So just like everything else, give and take goes a long way. Money is just a bit harder for most folks to agree about. Good topic!
Elizabeth:
Getting “buy in” from the spender can often just be a case of presenting alternatives. Make the correlation of savings and what it gets you in the future. They know the value of saving “in theory” help them visualize a “pay off” down the line.
As far as basic investing goes, is that both parties have a responsibility to make the investing strategy work. The “investor” needs to take the time to explain what he or she is doing and the “non-investor” needs to be engaged enough to actually listen. That’s why I created my site was to make sure that those who don’t necessarily have “the basics” down, can get far enough up to speed that they can be a good listener or a good explainer.
Rob:
Money is definitely one of the big “gotcha”s in relationships. While I don’t know if one financial model works for every relationship, one of the best pieces of advice I’ve ever gotten is to make sure that you’re on the same page on those subjects before you take the plunge. There are many books and counselors out there who can make sure you guys ask each other the questions about things like children and money that you HAVE to be on the same page about. Make sure you sit down and talk about these things and make sure you don’t have any “irreconcilable” differences.
Thanks for your response, Bradley. Rob, I can’t imagine what that situation must have been like!
In response to these comments, I think it’s important to remember that the stress of tight finances can make people behave in ways you (or they) would never have thought possible–ways that simply can’t be anticipated because they’re an abnormal reaction to an unprecedented situation.
This sparks a larger (likely rhetorical) question: how do you build a financial foundation and methods of communication that can withstand even the most unexpected relationship blows such as illness, job loss, or addictive spending?
I think that the same keys to surviving those things are just the bases for any good relationship. Basically relationships are like any other investment, you put the effort in so that when times get tough you can draw from the bank.
What a great topic! I have two items: a story and a question.
Back about 17 or 18 years ago, my husband and I decided to refinance our first home mortgage. We had a history of fighting monthly when it came time to pay the bills, which was my responsibility. I freaked out over how little we saved and how much we were spending. He believed in “manageable debt” and building a good credit rating. I believed in not owing anyone anything ever.
I realized while I was going through the paperwork necessary to refinance, that although many of our assets were intangible (not in my wallet), we actually had enough to live without any income for a year! It would mean drastic changes, but it could be done. This realization allowed me to relax and stop freaking out because I finally identified my issue — my “why” for my panic — I was terrified that we would be turned out of our home and left homeless. With a year’s worth of assets, I realized this would not happen. Also, the main difference between us and a homeless person is that we had a support system in place — our parents and friends would never allow us to end up homeless. (I know homelessness is a much more complicated issue, but this was just one element I focused on.) Very important learning experience.
And my question fast forwards to more recent times. My husband quit his job of 15 years rather suddenly about 3 years ago to start his own venture. For two years, we survived on our savings and investments (all of them), borrowed or were given money by both sets of our parents (a lot) and lived on sporadic contracts he was able to line up. All this while our twins were in college (no financial aid). We took out loans and maxed out our credit cards. We were now paying our own health insurance. I tried to be very supportive. He did manage to line up several sporadic contracts, but never full-time.
After two years of this (imagine the stress), he finally realized it was time to get a “real” job and did so after just a couple months of looking. He has been doing well and being paid steadily for the last year.
BUT, our debt load is tremendous. We have cut back our expenses a great deal, only go out to dinner for very special occasions, have not taken any vacations, and I now shop at Salvation Army if I can. My husband has finally admitted that over the years he made some poor financial decisions, but I am also to blame, as I went along with it all. (although he didn’t consult me on leaving his job when he did)
I have thought of going back to work (I am a full-time mom), but have had some serious health issues to deal with since last year that have prevented that. My husband also tells me that it wouldn’t make sense for me to get a low-paying job; it would just put us into a higher tax bracket. Unfortunately, I have little to offer the workplace as I haven’t been employed in over 22 years. I was a Studio Art major and graduated from an Ivy League school and worked for four years before having children.
Any advice would be appreciated. Thanks.
I’m always perplexed by the claims of “putting you in a higher tax bracket” as a negative about bringing in additional income. I am not familiar with every State’s income tax policy, so I won’t comment on that, however Federal tax each “tax bracket” only applies to dollars made after that point. So if 40,000 is the threshold of a new tax bracket, only the dollars you make past that point are taxed at the higher rate.
The saying that “every little bit helps,” is particularly true when you have a large debt load. Every penny you use to pay off debt is earning a TREMENDOUS interest rate. If you have health concerns and a full time job (reading your post I’m not sure if the kids are still at home?) perhaps a low stress job could be the ticket. Perhaps working online could be a possibility.
I hesitate to get into relationship counseling, but I would STRONGLY recommend that you sit down with your husband and have a serious and detailed conversation about finances. It seems shocking to me that he would decide to quit his job without consulting you. I also feel like maybe you guys are not clear on each other’s financial motivations. For me I feel like communication is the key which I why I advocate about learning investing basics (hence my site), so that you can at least be involved in the decisions. I think maybe you take baby steps in that direction by letting your husband know that you’d like to be involved in decisions like that.
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Perhaps a bit off topic, but I am newly married and having a heck of a time with our finances. The main issue is that my wife entered our relationship with a good deal of credit debt, and after totally imploding with debt myself 15 years ago, I’ve finally achieved zero credit debt.
This would not be a problem except that she has little to no ability to save due to credit card payments and I can save quite a bit. We have made a budget, tried to tighten the purse strings…
I really feel like I have tried to accommodate/accept her great concerns about her finances, and the stress this causes her…but I’ve now noticed a pattern that whenever we discuss money (the latest over a trip to New Orleans I am extremely excited about) she get super pissed off and tells me she has no money, becomes distant, and we never actually come up with solutions! I’m all for hearing people when they have concerns, but we never solve anything! I even told her that a large part of the trip is covered (no airfare cost as I had free tickets and we will ask family to help us instead of receiving Christmas presents, or give really small presents and save that way).
I understand that she is feeling awful and powerless, and maybe even some guilt that we are so far off in terms of finances, but we have to talk about it eventually!
What to do?
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