Family Finance Blog

Having been married for a whole 9 months now (woo-hoo! I absolutely love being married!) I certainly qualify as an expert in marriage (please note the tongue that is firmly implanted in the cheek for that part). Watching some other marriages I know, I see a common pattern in many of them (not all, not even most, but quite a few). This pattern is the struggle between the Saver and the Spender.

The Saver in the marriage wants to save every single penny that comes into the household. They rigorously monitor spending levels and saving levels. They form budgets and get upset when the budget is not followed to a tee (unless, of course, everything comes in below budget.) Coming into a marriage with a Saver can be quite a shock for anyone who is also not a Saver. One couple I know, just months after they got married, the husband asked the wife, “so, approximately how much per month do you spend on pantyhose?” She was a little taken aback at this level of detail in their finances, but that is how his mind worked. He had a need to know where every penny was spent. It made him feel secure.

The Spender in the marriage is much more free and loose with the money.  They might take a look once a month or so (at most) at the checking account balance, and if it is above zero, that is good enough for them. Money is a tool to buy the things you need and sometimes the things you want. The thought of tracking every penny seems silly to them since the only real necessity is to have enough every month to pay your bills. Any work beyond that is just, well, work. These are the people who usually have a nice car, a well furnished house, and clothes that match the season.

It takes two

Although initial disagreements between Spenders and Savers can cause significant problems when trying to combine finances, with a little work and compromise, the Spender/Saver combination can be very effective at managing the family finances. The Saver will help make sure that there is enough money for a rainy day, and the Spender will help make sure that life is enjoyed (not that you need money to enjoy life, but if you are constantly worried about money you are less likely to enjoy it.)

Step 1: Make a budget

What? Isn’t this just giving in to the Saver? Partially, it is. But that is what compromise is about. The Saver will go crazy without a budget. So let the Saver go crazy on the budget. Give the Saver all the information they want to try and micromanage the budget down to the fraction of a cent (like the 9/10th of a cent tacked onto gasoline prices in the US). Be nice and look at their spreadsheets and smile when they point out all the neat features and formulas they used to estimate how much diapers will cost you in 5 years for the third kid you don’t have yet.

Step 2: Throw out the budget

OK, so that’s a bit strong. But the next thing to do is get together and decide on those categories where a budget makes sense and those categories where a budget might be a little restrictive. A budget for housing costs, utilities, or car related costs? Fabulous. A budget for exact spending amounts in the categories of Fast Food, Undergarments, and entertainment? Perhaps a bit much for the Spender to cope with.

Each month, take the total amounts that were budgeted for all those more “spur of the moment” categories, add them up and divide by four. One of those chunks goes to each person as 100% unrestricted money with no receipts, justifications, or anything necessary. The Spender can go out and spend all of their money in one day on the latest fashions or on a great night out with friends. The Saver can squirrel away every penny in a high interest savings account, or save it up for 6.28 months to buy that gadget that they want. The remaining two chunks is “couple money.” Use this money to go out on dates, buy gifts for each other, and make spur of the moment purchases you both agree on. (There is nothing magical about a 25%/25%/50%, it’s just what works for some people. Find your own split.)

By having unrestricted money, the Spender doesn’t feel limited and cut off from money by the Saver. They also don’t have as many opportunities to go over their monthly budget. By making sure that these are restricted, limited amounts, the Saver can still put together a nifty spreadsheet that includes exact amounts of spending.

One caveat, though, is that when you are deciding the categories you need to be fairly detailed about what is and is not covered under “unrestricted money”. Are work clothes part of that money, or are they another part of the budget? This just makes sure that someone (usually the Spender) doesn’t run out of money at the end of the month and buy things on shared money that the other person though should be personal money. And if it happens, talk it over and work out a new plan.

By using this plan, a couple can let the Spender spend and the Saver save. There will still be times with disagreements, but overall it can be a peaceful way for opposites to coexist.

P.S. For those curious, my wife and I don’t fall exactly into these categories. Saying I am the Saver and she is the Spender is like saying Dick Cheney is the Republican and George Bush the Democrat. We are both Savers overall, although I am certainly the one more likely to make a spreadsheet and check our account balances four times a week.

This entry was posted on Tuesday, July 17th, 2007 at 8:11 am and is filed under Budgeting, Marriage. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.