Relationships and Money
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My blog evolves week by week and although I have a list of things I want to write about I do really enjoy answering questions from you. I received a question from Kurt who was keen to know how my husband and I “managed to get on the same page and stay on it as far as becoming financially independent”? What a great question.
It made me reflect on our relationship, what has worked for us and to also thank my lucky stars that we ARE on the same page. Having a common goal helps. We equally don’t want to be broke now or broke in retirement. We want to work less now, enjoy family life now, be prepared when things go wrong and not be so reliant on other people to create an income. These goals keep us on the straight and narrow and they are something that we openly discuss.
Money, like religion and politics, is the thing that we are told we should not talk about as it is seen as rude and intrusive. So as a result we all head blindly into a relationship where we discuss our favourite foods, dream holiday and how we love puppies and walks on the beach (I don’t, too sandy). But we are less likely to discuss the size of our student debt or what we earn an hour. Through the course of a relationship these things will bubble to the surface and how many people find out about hidden debts and spending or saving compulsions of their partner when they are already a long way into a hook up?
I think that is where our relationship was different. Growing up with little surplus cash and spending years as a broke student made me DREAD the scenario of being at the checkout and having to put items back. Been there, done that and just about died of shame. Although my husband had a smoother path I think that the two of us were pretty up-front about where we were both at financially when we got together.
When we met I was in my last year of university in Dunedin living on the smell of an oily rag and he was in his third year of working as a graphic designer in Christchurch. I had just flown home from the most high paying summer job I could find, driving dump trucks in Oz. My sister was having a party and I answered a knock at the door, only to find my future husband standing there. Queue the angels singing music...
As I’ve talked about before, I got out of five years of university study with no debt because I took a two year break to work in the mining industry, made big bucks and saved like a little squirrel getting her nuts ready for winter. Plus I worked a part time job while I studied and also got a student allowance. He lived at home when he was studying, worked in a fish factory every holiday and paid cash for his education. He remained living at home when he started working, he had it pretty good, why move?! I thought of a few reasons why he should... His parents set a good example as they are frugal by nature and he just naturally saved because apart from his car there was “nothing in particular that he wanted to spend money on”. His parents also sat him down in front of their financial advisor to set up a managed fund. Big Ups to them, that was to be the house deposit we needed in years to come!
Living in different cities for the first year meant a lot of travel up and down and long long long phones calls (“you hang up, no YOU hang up…!”) Once I graduated we moved to Wellington and this was our first opportunity to start to spend. And we did. Rent, setting up house together, lots of socialising, eating out all the time (Roti Canai with a Malaysian curry to die for at Cuba Street Mall has me hungry just thinking about it), spending a fortune on vet bills with Colin our cat, overseas trips etc etc. HUGE lifestyle inflation I can tell you - we loved every minute of it and always paid in cash.
We paid for everything separately until one particular trip to the Kilbirnie Pak N Save where we were busy dividing the bill in half and each paying our half share. It suddenly seemed pointless to have to do all this math on the fly. So after that we set up a shared bank account so we could pay rent and groceries but we still kept accounts of our own. Then once we had sized each other up and worked out we could trust each other we took on a mortgage and consolidated down to a joint account. Interesting side note about that supermarket. One morning we were loading the groceries into the car and THE QUEEN drove past! We waved frantically (or at least I did).
Our view is that it is OUR money, not mine or his. It all goes in one pot no matter who earned it. There have been times when we earned similar amounts, times when one of us has not worked at all or times like at the moment where he out earns me. We are a team and at various times one works harder than the other and that is just the way it is. Although I am the one who keeps track of things, no one ‘controls’ the finances.
We have never had a budget. Although I have tried I just can’t make that work for us. Call me lazy but tracking the past is easier than tracking for the future. My radar is finely tuned for wasteful spending and unlike my shoe loving friend (www.thehappysaver.com/blog/investments-come-in-all-sizes) I don’t have any particular shopping vice. Apart from Converse I guess.
Seeing the bigger picture of where we want to be has evolved over 18 years together. Even though we spent money on cars and holidays that we should probably have saved we still always had saving as a habit that went on regardless of other expenditure. It just comes up in conversation about what we want to be doing five, 10 or 20 years from now. Saving has never been something that has stopped and started, the amounts may vary but it just goes on regardless. The Christchurch earthquakes were a validation of that saving mindset. We never had a goal that we were putting money aside for but suddenly that money was earmarked to get us through what would become years of hassle. It enabled us to cope financially when we were not doing overly well emotionally.
If you combine a natural disaster with lack of money you have a recipe for a ding dong with your partner and I saw this first hand with friends. Thankfully we have never once argued about money. Lack of money can and does cause a huge amount of stress in a relationship and as someone looking from the outside at others I don’t know why people keep inflicting financial pain on each other.
If you know that leaving a wet towel on the bathroom floor annoys your partner you soon learn to pick it up. If you know that driving a new $4,000 ride on mower home, when you had a perfectly good push mower would make your partner flip out, then why would you do that to them? I know my Dad was capable of constant expenditure without my Mum knowing about it and it stressed her out hugely as she knew there were other bills to pay. He controlled the money and he was not a very good banker. I clearly remember her telling him “if you drive another car home this month, it better be big enough to sleep in!” For the record he DID bring another car home; he was always buying and selling cars. A huge row ensued and he had to take it back! He also bought Mum a new fridge as a present (that she neither needed nor wanted). It had a lock on it for some strange reason. He was prone to midnight snacking so imagine his surprise when he found the fridge locked. The fridge went back too.
Now that I think about it my parents appeared never to have a common goal for their finances. Dad’s view was “money was made round to go around” and he would either buy things or literally just give money away. Mum on the other hand was powerless to stop this and it was something that was never resolved as they steadily worked themselves into more debt. As a defence mechanism she would just ignore it, less confrontational that way, and years of trying to change him had no impact anyway. Years later she set herself up her own account so that at least she always knew that there was some money set aside for her when she needed it.
Some relationships appear like death by a thousands cuts with one being careful around money and the other blowing it on purchase after purchase. I know an older couple who do have their own accounts because one is a spender (think cupboards full of clothes with tags on) and the other is a saver (think would rather sit in a cold room than spend money on heating). Ironically she keeps buying heaters because the house is cold. He keeps hiding them to save on power. Both of them appear equally unhappy because from the outside looking in they have never been able to reach a balance. They are in a constant tug of war.
We both spend carefully and out of respect for each other will always talk before we buy anything over the value of say $50. It’s not a set amount and it is not that we have to seek each other’s approval, we certainly don’t, it is just that we don’t want to adversely impact the other person by draining the bank account. It is common courtesy to discuss it first. I personally think I need to be courteous when spending, thinking about how it will affect my family and the ongoing implications of taking that money away from our long term financial goals.
We have different interests and buy different things that vary in value. I heard of a couple that matched their spending as a way to drive the point home that the other one spent too much. He spent $500 so she insisted on doing the same, dollar for dollar. It was a ridiculous competition and they are currently divorced. No surprise there!
I think my upbringing had more impact on me than I realised! I saw my parent’s relationship with money and sure as hell did not want that financial strain for myself.
You can never put an exact value on what you each contribute to a relationship by way of all the jobs you do day to day. Particularly once children come on the scene and one of you takes a break from work to care for them. So don’t try to divide up your money to reflect this. What’s mine is yours: what’s yours is mine.
Pull your weight. Always be trying to actively contribute financially but understand that at times it is not possible because life has a habit of sometimes getting in the way.
Discuss the future, where do you see yourselves heading and how much money will you need to do it? When you know where you are going as a couple it puts the purchases you make today in perspective.
Put yourself in the shoes of your partner to try to understand the way they relate to money. Talk about it. Always be kind to each other and think about the impact that your financial decisions will have on the other and vice versa.
Stop buying junk that adds no meaning to your life. I keep thinking about the lady I saw buying a Giant Fake Pear at the Wanaka Show in March. Why why why lady? Think of the long term - paying down debt, saving for a holiday or retirement. Every $50 spent now on a Giant Fake Pear can’t work for you in the future.
Always spend less than you earn.
I hope that answers your question Kurt, it certainly got me thinking about things. Research this week involved lying on the couch on a sunny afternoon drinking beer and talking to my husband about everything you have just read above. My kind of research!