When your mate can't handle money
It might be tempting to seize the reins, but that would be a mistake. Here's a 4-step (and 2-person) plan for building a solid financial foundation for your relationship.
Women often get tagged as spendthrifts, but men can be just as bad. Check out this recent post from our message boards:
"(My husband) and I were paid last Friday, into our joint account. After paying our rent and his student loans, I went to visit my parents for the weekend. Upon my return, I discovered he has spent ALL of the remaining balance of our bank account on fast food, clothing, and going to movies."
How do you cope with a spouse who can't handle money? Some of the Gals in Red advocate ruling with an iron wallet:
"Your hubby is behaving like a little boy whose mommy will always come to his rescue and fix everything," wrote one irate woman, who prescribed the following punishment -- I mean, solution:
* Open your own account and have your paycheques go there.
* Divorce your credit from his. Take him off your credit card and vice versa.
* Sit down with your husband and agree about who pays what and when. Put it in writing, and make him sign and date it.
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It's so tempting to play dictator, especially when your spouse behaves irresponsibly (or takes refuge in a state of perpetual cluelessness). But, I've found, that isn't the road to a strong fiscal partnership.
As one reader put it: "I don't think this is about money, I think it is about communication. . . . There are better ways to handle the situation than to treat your spouse like a criminal (or a) child."
I'm not saying it's easy. It has taken all seven years of my relationship to get 80% on the same financial page as my spouse. And we still stumble. Recent example: Although he's in charge of paying bills (a triumph for him and a relief for me), I'm the one who had set up our automatic transfers to our ING savings accounts. That means he balances our checking account according to bills paid, often forgetting to include withdrawals for savings. The other day we came within $1.94 of overdrawing our account. Again.
Whose fault was that? We try to skip the blame game and go right to a solution. In this case, my husband needed a written record of the weekly savings withdrawals. Simple. Better communication solved the problem.
So when I hear women say that they can't trust their partners or that "he makes so many mistakes with our money that I have to take over," I don't buy it. Taking control doesn't solve the underlying problem (unless you want a mate who is perpetually helpless).
One issue might be confidence: Some men are just as anxious about money as many women are and dislike managing it. If your mate is fumbling the ball, he may lack basic money skills -- which can masquerade as a sort of macho indifference. ("Yeah, I spent the money for our bills on clothes. So?") Those skills can be learned.
But from what I've seen, most couples never take the most basic steps of setting up a financial foundation for their relationship. Here's how to do it:
* Agree on at least one goal, whether you want to get out of debt, save for a car, give the kids hockey lessons or visit the Outer Banks. Your priorities establish a base from which you make other money decisions. This is the most important first step.
* Play to each other's strengths. My husband is great at handling day-to-day expenses. I'm good at monitoring the overall monthly/yearly budgets and planning for our retirement.
* Talk daily about money. Each partner should know the baseline of what's going on: the balance in the household accounts, the cost of upcoming expenses and how much can be spent on what each week or month.
* Respect each other's "needs" and negotiate them. If you "need" to get your hair done and he "needs" a flat-screen TV, figure out what's possible financially and plan accordingly. Nobody gets everything they want, in life or in marriage, so be flexible.
A month without spending
I finally committed to control my spending in August.
With about $6,000 in our emergency fund around the beginning of August, that left only five months to save an additional $9,000 to meet our 2009 goal of $15,000.
That's $1,800 a month, for those of you who left your calculators at home.
* Related:Why are we fighting about money?
Where on earth is that going to come from?
* We have been saving about $900 a month since March, when I joined an online saving support group.
* We can add $300 a month, thanks to my husband's new part-time teaching job.
* I'm trying to land a project myself now that could provide the additional $600 a month -- keep your fingers crossed!
For those of you interested in saving more, consider joining a saving group in the Your Money section of our message boards. All you have to do is show up, state your goals and try to reach them.
* Some people aim to have five, 10 or 25 "no spend days" (NSDs), and a similar target for their "controlled spend days" (CSDs).
* Some people define an NSD as zero spending. Some define it as just not spending frivolously (i.e., paying bills is OK, but shopping at yard sales is not).
* A CSD might mean spending no more than, say, $5 or $10.
The idea of an entire month of not spending can sound Draconian, one reader said, "but once I came to understand that it . . . was more about finding a way that worked for you to track your spending and any 'leaks' in the wallet, it has felt more like a tool and less like a punishment."
I'm also finding, just a couple of weeks in, that joining this group is helping me to take my own commitment more seriously to spend less -- and is a great complement to being in the Savers group.
When I was on vacation earlier this month, it was hard not to buy all the cute things I wanted. But thinking of August as a month of controlled spending helped me to avoid many frivolous items (I did buy a couple of items -- on sale, of course!).
When baby . . . makes you buy a new car
I love our online support group. It's packed with information and inspiration. And there's always a zinger in the mix -- some off-road topic that strikes a nerve. This week's live wire, still going strong, is a "baby car argument" thread.
Basically, a young couple are on a deadline. Baby arrives in February, and they need a new car. Or do they?
She has a sturdy little Corolla she loves (and it's low maintenance). He has a Ford Focus that she hates (it needs continual repairs). Both are compact, two-door cars.
Now, with a baby making three - and in need of a car seat -- should they make do with their current cars or trade one in for a four-door vehicle? And should it be her car?
I remember those new-baby days. My best advice: If you don't absolutely have to buy a car or a new home or even a new crib, don't.
Children are expensive in ways you can't possibly anticipate, as data from the 2009 survey from the U.S. Department of Agriculture reveal: For a typical American family, the cost of raising a second child born last year to age 18 will be about $221,000. That doesn't include college, sorry. (For details, read "How much does it cost to have kids?")
Your best bet as a new parent is to have no debt, plenty of money in savings (for backup child care, for time off without pay, for multiple trips to the doctor, etc.) and a manageable plan for your own retirement. A car will soon be the least of your worries.
MSN.ca Money's editorial goal is to provide a forum for personal finance and investment ideas. Our articles, columns, message board posts and other features should not be construed as investment advice, nor does their appearance imply an endorsement by Microsoft of any specific security or trading strategy. An investor's best course of action must be based on individual circumstances.
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