My boyfriend, Nick, and I started dating as penniless college students.
Back then, we didn’t disagree about money because we didn’t have any.
Now that we're in our thirties, living together in Montreal, Canada, both working full-time—him as a computer programmer and me as a senior communications manager—things are a little different.
Our mutual overspending landed us tens of thousands of dollars in debt in our twenties, and now that we're living debt-free, I definitely want to start enjoying my money again ... within reason. Nick absolutely disagrees, clipping coupons and scanning weekly flyers for sales on items we need—and absolutely nothing else. I'll give you an example: Nick has had the same pair of "jeans" for at least five years. When the bottom wears out, he takes them to the tailor and gets them cut into shorts. “I don’t want to waste a good top half,” he tells me.
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Every now and then I want to splurge on a nice vacation, a weekend road trip or a spa day, but Nick doesn't want to spend a cent.
So we decided to keep separate accounts, which frankly has saved our relationship. We spend it how we want while contributing equally to our joint monthly expenses (although he covers our $300 utility bill, and I pay roughly the same amount for our cell phones and home insurance). We don’t question how each other spends their money and neither one of us has ever missed a joint payment.
I don’t remember my parents having separate accounts ... but then again, they're now divorced. Nick and I have found a solution to our different spending styles, but I couldn't help but wonder—do other couples disagree on spending? (And do they have any advice for us?!) So I asked two couples how they, jointly, manage their money.
James and Miel Hendrickson, Washington, D.C.
James Hendrickson, 38, and his wife, Miel, 36, have been married for seven years.
When it comes to big goals, the Hendricksons make a great team: "Together, we saved $19,000 toward our first place and $25,000 to cover our wedding and honeymoon," James says. "We tend to work well together when we have mutual goals." In fact, they're so motivated about their big-picture spending, they opened a joint savings account before they were even engaged.
But, they explain, it's the day-to-day spending where things get tricky.
"I don’t remember my parents having separate accounts ... but then again, they're now divorced."
James, a risk analyst for a management consulting firm, likes to invest every single dollar that isn’t spent on monthly expenses or included in his very little “fun money," a habit that helped the couple grow their net worth to over $1 million in their late 30s. They invest extra money in entrepreneurial projects (right now they're focused on their ownership of six separate blogs), a healthy retirement account, and real estate in Washington, D.C., as well as in Oregon, where they're both from.
Miel, a business developer for an international nonprofit, spends her money on nice vacations or shopping for clothes and shoes. Once, her purchases racked up a four-figure bill—much to the confusion of her husband, who doesn't understand the appeal of clothes shopping. "It drives me nuts!" says James, whose own fun money usually goes to gadgets like a new wireless router or lunches out.
While the Hendricksons agree that each of them should spend some of their income on themselves, they didn't want their individual spending choices to derail their financial progress as a couple. "To give each other a bit of autonomy, we initially kept our accounts separate and paid jointly into bills and mortgages," explains James. "Last year, we finally established a joint account for household expenses."
Their advice? "One thing a lot of people don’t get is that fights about money aren’t really about the money. They're often about something the money represents, like feelings of security, attentiveness or responsibilities," advises James. "In reality, you'll likely both have different priorities for spending money, so it doesn’t make much sense to fight about it."
Want more advice from the Hendricksons? Visit their website.
Julie and Tim Rains, Winston-Salem, North Carolina
After two children and 28 years of marriage, Julie and Tim (now 53 and 55) are on the same financial page—but that hasn’t always been the case.
When they first started dating, Tim's first purchase was a flashy, financed Mazda RX-7. His choice baffled Julie, who didn’t understand why his hand-me-down car from his father wasn't enough.
She made the down payment on her Ford Escort with $500 from a bank CD and drove it for 10 years, until it didn’t run anymore. The money she saved became the foundation of her retirement savings. "Back then, I mostly stored that money in taxable accounts, which I've since dissolved—I think I used that money to buy mutual funds," Julie recounts. "But investing early helped me become accustomed to the value of steady contributions."
Julie remembers noticing Tim's spending patterns before they got married, and was fine with his choices as long as she was similarly able to spend without judgment. “But spending becomes a problem when one person makes a decision without consulting the other person,” she says. Although Julie prefers to spend her own money on her hobbies of cycling and running, she was still incensed when Tim impulse-bought a $500 exercise bike early in their marriage.
For her, it wasn’t the fact that he spent a large amount of money—it was that he made a large purchase decision without consulting her first. Post–exercise bike, the couple set a spending threshold, deciding that they would talk before either of them made a purchase over $500. “I think we have both influenced each other's spending styles," she reflects. Today, if they don't agree on how to spend their money, they don’t do it.
As a couple, their advice on creating marital harmony around spending might sound surprising: "I don't believe in 'compromise,' " says Julie. "It's important to come to an agreement about the right thing to do. If you compromise, no one gets what they want or need. Remember that you'll live a long time ... but not forever, so save and spend according to your values."
The Rains' approach has worked for them: Together, they paid off the mortgage on their home, they both actively contribute to retirement funds, and they continue to invest. "We're always looking at ways to grow our wealth, manage our tax situation and diversify," Julie explains.
Want more advice from Julie? Visit her website.
For guidance on how you and your partner can work together to get on the same financial page, plus tips and tricks for communicating effectively (and making it fun!), check out the free webinar from LearnVest and Chase Blueprint®: The Money Talk.
LearnVest Planning Services is a registered investment adviser and subsidiary of LearnVest, Inc. that provides financial plans for its clients. Information shown is for illustrative purposes only and is not intended as investment, legal or tax planning advice. Please consult a financial adviser, attorney or tax specialist for advice specific to your financial situation. The individuals quoted in this article are neither clients, employees nor affiliates of LearnVest Planning Services. The person interviewed in this piece is neither a client, employee nor affiliate of LearnVest Planning Services. LearnVest Planning Services and any third-parties listed, discussed, identified or otherwise appearing herein are separate and unaffiliated and are not responsible for each other’s products, services or policies.