Posted by Mike Smith :: July 7, 2008 @ 10:24 amThe term Personal Finance is something of a misnomer because it implies isolation from your financial situation. For those who are married, or have kids, Family Finance would be a more appropriate concept.
The ideal situation for anyone concerned about personal finance is to have a spouse who is at least as frugal as you are. Frugality is a relative measure, but a more frugal spouse will make your efforts seem easier. Rather than fighting over every proposed improvement, such a partner would probably inspire even greater restraint.
The influence of your spouse on your family finances will be substantial, whether positive or negative. The spouse more inclined to spend can do considerable damage to the family finances because while there is a limit to how many expenses one spouse can cut, there is no limit to how much the other can spend. I cannot imagine the frustration that would come from diligently working hard on your family finances only to have your progress undermined by a poor financial decision by your spouse. Discussing money matters openly will allow both sides to debate the issues. You won’t always agree, but talking before the money is spent may help to avoid making a big mistake.
At the same time, it would be burdensome to discuss every little purchase you encounter throughout your day. I’ve seen advice that any purchases under $250 are fine without a discussion. Obviously that number could be adjusted based on your lifestyle. Rather than using a specific number, my wife and I typically only discuss discretionary spending, regardless of the amount. So if I come home from the grocery store with a $300 bill, we won’t discuss it; but we will have a discussion before spending $50 on a new cell phone. This may seem somewhat askew, but required spending is already within our budget, while discretionary spending is not. So in a sense, we’ve already agreed what to spend on food for the year when we set our budget. If one of our spending categories starts to exceed the budget, then we may revisit that discussion.
Coming to a consensus on the financial mindset for your household will allow for compromise in both directions. You may spend more than a frugal spouse would like (or less than a spendthrift spouse would like), but if your overall spending can be curtailed, you have surely made progress.
1 Comment
This is so important. I completely agree with your post. In my house, I am the more frugal one, so I manage the finances (generally). He is pretty responsible with money as well, though, and our alignment on this issue has led to our never having fought over money before (in 7 yrs!)
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