Part Seven on Money and Marriage: A Little Savings-Budgeting Trick
We’ve been looking at Dr. Stanley’s research on how it is that most wealthy people became wealthy and it turns out the secret can be summarized in a little phrase:
Live on less than you make.
Sure, there are the rich athletes and the Hollywood elite and people who win the lottery and a few who inherit a bunch and never earned it.Most of them never really become wealthy because they end up spending their money on crap and appearances.Your chances of having bookoo bucks to spend on whatever are slim to none.We have this E Television and US Magazine idea that the road to happiness is SPENDING and BUYING and it turns out that the happiest people in terms of money (money doesn’t buy happiness.Duh!) are people that utilize self-control and save and that having some money in the bank for a rainy day or for an uncertain future settles people’s spirits down.
Turns out it really feels good to have self-control, better, after all, then shopping till you drop. If you shop till you drop, you will literally drop. Emotionally crash. And then you’ll be sitting there with all this stuff.
Living frugally, instead, certainly works wonders for a marriage. One of the biggest problems in marriage is money and one of the biggest reasons money is a problem is because he and she are each acting independently and having their money separate and acting as roommates, but they aren’t roommates, and it bugs them when their partner spends this or that and so they go out and spend in revenge just to get their comeuppance and then they fight about that and around and around they go and if you live as roommates you can guarantee that you will never be financially independent other than independent from your spouse in an arrogant, selfish way that inhibits people from being the sacrificial spouses they need to be to actually get somewhere as a couple.If you are going to be married you may as well enjoy it and you aren’t going to enjoy it if you treat your spouse like she’s your sister or brother or your college dorm mate.
That’s no way to live, thank you very much. Unfortunately, millions of couples are living this way, many of whom learned it cohabiting with their current spouse or somebody or somebodies else and they’ve been ripped off in their previous marriages or previous cohabiting arrangements and so they get very protective of their butts and there’s no way they are going to trust their current spouses and around and around we go.
No, that’s no way to live. Money is fluid and it’s always changing and so this gives you, as a couple, something to talk about for the rest of your life. And if you agree on the overall goal (we’d like to have some someday), you’d be amazed how the little expenditures along the way can be worked out.
You’d be amazed.
You’d also be amazed, if you were a marriage counselor like me, how stubborn people are about their money and if they have developed the bad habit of not combining their money (We’re supposed to be ONE, remember?) together, they just aren’t gonna take any advice from their therapist on this deal. It works for them (they think), because if they have their money separate, at least they don’t fight any more about it.
As John Gottman’s research found, the absence of fighting may only be hiding seething underneath and sooner or latter the bill will have to be paid on one’s investments in resentments and one day one will come home with papers or the sheriff will deliver them to you or someone will end up in someone else’s bed or someone will turn into the wicked witch of the west and have complete meltdown.
You can’t go days, months and years and NOT talk about money and work it out and negotiate and navigate and compromise and give and take and save and give to common causes and enjoy your marriage. It’s like owning a boat that just stays in the garage. You are supposed to sail someplace with it and if you aren’t going anywhere with it it’s a complete waste and if you aren’t talking about your money you aren’t talking about your dreams and hopes and aspirations and you’re really aren’t going anywhere as a couple and it’s no wonder you start to hate your life.
And then you go and divorce because this is just awful, you can’t stand it any more, but all you learned is to be more and more stubborn and more and more self-protective and to nurse your wounds and to feed your resentments, none of which is conducive to a happy marriage or a happy anything and you get married again, or more likely, move in with somebody else again, more likely a creep, and you keep your money separate again, because you don’t trust nobody and your life continues to suck and you continue to have nothing to show for your life except receipts from Walmart and a house full of crap that won’t give you a hug and demands that you store it and clean it and organize it and rearrange it and repair it and take care of it and you become a slave to your own selfish self.
Hey, that ain’t no way to live.
So, have a powwow with your husband or wife and put your money together. Both of you. Enough of the living-as-single-people-while-you’re-married kind of life. Your spouse isn’t dumb. Neither are you. Compare notes. Take a financial class together, like Financial Peace University (13-week class sponsored by area churches and put together by financial guru Dave Ramsey. In any given time there are a dozen or more classes going on in central Iowa), or pick up Dr. Stanley’s latest book Stop Acting Rich or hook up with David Bach’s books, like Smart Couples Finish Rich, and read them together and repent of your selfishness and have a life already.
Enough of the pep-talk. Here’s a practical idea:
Dave Ramsey recommends that couples go to the envelope method to budget their money.By this he means, that you take out cash for your discretionary spending (eating out, clothes, household supplies, pop and snacks, etc.) and put these agreed upon amounts in a separate envelop.When the money runs out of you envelop, you are done spending money on that area.This keeps spending under control and everybody accountable and honest.
This isn’t to knock that idea, but that didn’t work for us.We’ve been using cash cards for years now, and the idea of taking cash and walking into the gas station to stand in line to pay for my gas with cash didn’t appeal to me.I wanna just run my cash card and be on my way.So my wife and I came up with another idea on our own.
We had another problem, and that is we’d have a savings account. but we’d keep dipping into it to pay for the unexpected or whatever and so it never grew to anything. Somewhere else, Dave Ramsey had said to make sure that your savings accounts are dedicated to a specific thing. He didn’t really elaborate on that, but we took that suggestion and ran with it and we’ve found that it’s really helped us. It’s a work in progress, but this is what we did:
We set up several savings accounts that are specifically earmarked for specific areas. We have a car repair fund. We have a car replacement fund. We have a Christmas fund. We have a medical deductible fund. We have a vacation fund. We have an emergency fund. We have a house repair fund. As we become more flush we’re talking about having some other ones as well. These accounts are at different banks (usually a savings and a checking account at one institution. That way we can transfer money from one to the other and use the bank’s cash card.) and they are linked to our main bank account via the bill pay feature.
Here’s how it works: Every Friday one of us gets paid, both every other week. On Monday, we have, from our general checking account, monies automatically drawn out into various funds. That money is specifically earmarked for a specific thing. Over time it adds up. A bunch. And because it’s earmarked, we’re not tempted to spend it.
For example, let’s say your medical deductible is $2000 a year. Divide $2000 by 52 (or if you get paid every other week, by 26 or if you get paid once a month by 12) and that’s $38.46 per week. For simplicity’s sake you’d probably round up to $40 on that. So every Monday, $40 would go to your medical fund at the checking account at bank X. You want to spend $1000 for Christmas? Divide that $1000 by the 10 weeks left till you have to go Christmas shopping and automatically deposit $100 is a separate account to pay cash for your Christmas gifts. You estimate your car repairs are around $100 a month? Put $25 in a different account every Monday. You see how this works?
So, over time, you have a bunch of money in your car replacement fund.Over time, it adds up.It’s SUPPOSED TO!It’d be tempting to spend it on whatever whim that comes up.But you both know that your current car is going to bite the dust someday and when it does you want to be able to go buy another car.And pay cash.
This is how we’re thinking. We’re done borrowing money. Borrowing money didn’t do anything to us but set us back. And car payments are STUPID. In our society you HAVE to have transportation. It’s a regular cost that you cannot ignore. We may as well plan for it. It’s a utility, just like the heat and electricity. So we pay it forward. The bill will come.
So, you figure out how much you want to spend on your next car and divide that number by however many weeks (or pay periods you and your spouse have).If you’d like to buy a $10,000 car next and pay cash and your current car can last for an estimated three years, you take $10,000, divided by 150 weeks and save $66.67 a week.It’s not that bad when you divide it out over weeks.That money is there and you don’t touch it.Because it’s earmarked.You agreed.
My wife and I monitor these accounts. We talk about them. We discuss our expenditures coming up, like vacations, birthdays, Christmas gifts, bills we want to pay, other savings goals we have, how our retirement is doing, should we change this or that. It’s a pretty nice conversation. We enjoy these conversations because they represent our mutual goals and dreams and aspirations, our mutual love and shared responsibility. We’ve learned to respect each other’s input and wisdom. It brings us closer together. We look forward to these conversations. Money used to be our big issue. Now it’s our unifying issue. We usually do this on Saturday morning (we go out to breakfast at Panara or HyVee and we take our laptop and logon to our various accounts) and often several times a week.
Money is fluid.You have to talk about it.A lot.It’s a lot easier to talk about if you are both on the same page.
Your life can go either way.
You can work together, discuss your money, and, over time, work out a mutually agreed upon plan and actually enjoy the process and actually enjoy each other and grow in mutual love and respect.
Or you can piss it all away without even trying.