It’s quite customary for consumers who are making big purchases to set spending limits.
As an example, a couple might say, “I think it is time to buy a new car.” Once they have decided to purchase another car, they will then ask, “How much should we spend?” A great question. They’ll either talk about how much in car payments they can afford, or the cash price. Once the couple is on the same page, they head off to buy a car in the price range they previously agreed on.
I think most couples would find an improved marriage and money relationship if they talked through smaller to medium sized purchases in the same way.
The Need For Spending Limits For Married Couples
Without spending limits, there will be money fights in marriage.
Wife: “I got a new dress for the Jones’s wedding in two weeks.”
Husband: “I didn’t know you needed a dress.”
Wife: “Well, you couldn’t hardly expect me to go in one of my shabby month old dresses?”
Husband: “So, how much did it cost.”
Wife: “It was such a good deal because it was normally $120, but I got it for $80.”
Husband: “You paid $80 for a dress? Honey, we’re in debt and …”
Sound familiar? What we have here is a difference of values and a failure to communicate.
This type of problem could be resolved in one of the two following ways.
1. Budget: A Joint Husband and Wife Venture
If the husband and wife sat down and decided before they spent any money how much they were going to spend on clothing, the wife would have freedom to shop and the husband would know that there is a boundary in place.
But, this is not just about wives spending. They should jointly agree on how much the husband will spend dining out or on entertainment.
Things will go better for the husband and wife when both know there are boundaries in place to help control their spending. This is called setting a budget. If you don’t know how to make a budget, you should learn because your marriage relationship could improve through the process.
2. Individual Item Spending Limits
In this example, the husband and wife would have predefined what is a reasonable and unreasonable amount to spend on a certain item.
Take some of your usual items and set a reasonable scale. Don’t try and land on a number; just try and communicate your range of acceptance.
Take for example, lunch. The husband goes off to work, and when he comes home says nothing to his wife about the expense. Later that night she gets online and finds out he spent $17.50 for lunch. She thinks that is way too much for one little lunch.
In this case, the couple should sit down. The wife could say something in the $8-$12 range is a reasonable amount for lunch. This way when the husband is going out for lunch he has a good idea how his wife will feel if he spends more than $12.00.
While the process of getting on the same page might be difficult, it will be easier to make these important decisions before the money is spent instead of after. Having a money discussion after the money has been spent is almost always a recipe for disaster.
How do you improve your spending conflicts with your spouse? What helps you get on the same page financially?
I agree with you Craig,
After being through Financial Peace University by Dave Ramsey, we adopted the envelope system for our regular use items like food and gas and of course we talked about our money behaviors so if i spend the 17.50 for lunch and it was not agreed by both us it comes from food envelop; and if the grocery money is gone it comes from my allowance.
Another thing for us – we agreed that we cannot individually purchase anything that cost over $200.00 without involving the other person.
Kick debt off´s last post ..Earn Money while sleeping?
I know this is one thing that we struggled with when we were newly married. My wife would spend $50 on something for our home, and I would get upset. She would get upset because she felt like she was trying to make a nice home for us, but I didn’t appreciate it. Only after we had set a budget, and actually talked about our mutual expectations in how we spent our money did we see more eye to eye. Actually talking about it is a huge thing – although your first few discussions aren’t always going to be pleasant.
Great points, Craig. In fact, I recently commissioned a national survey on this topic and found that married couples who use a budget really do experience fewer financial disagreements than those who do not use a budget. It makes sense, especially in light of another finding from the survey that the most frequent financial issue couples fight about has to do with how much to spend on various things.
Matt Bell´s last post ..A Mint.com Update
What about just having the wife spend watch she makes, and the husband spend what he makes for the fun money, but have the main individual joint account be agreed upon by both, forever?
Financial Samurai´s last post ..The Government Is Sexist And Nobody Seems To Care
To me that would – in most relationships – tend to foster a me/you mentality – as opposed to creating a one-ness or unity in the marriage. It could also create a rift for one partner who possibly doesn’t create as much income – and feels slighted because the other partner is able to spend more. Thoughts?
I agree that it can create a rift. It depends on the couple. I am disabled, so I knew going into our marriage that my husband would make more than I did. (Plus he’s more of a consumer.) So early on we agreed that when he’s making more, he’s welcome to get more money to play with.
That said, I know of couples who do well with the agreement that a certain amount goes to savings, another to retirement, another to the joint account for bills and the rest is the other person’s. It wouldn’t quite work for me, I think. But it does work well for some. (My guess is when they’re both high earners.)
Abigail´s last post ..Temper, temper
Donno. I think it’s good NOT to handcuff the other spouse, and allow him or her to spend on whatever he or she wants, so long as the main funds are heading in the right direction.
Don’t want any bitter resentment.
Financial Samurai´s last post ..The Government Is Sexist And Nobody Seems To Care
My boyfriend and I have talked about this for when we get married next year, and we’ve already implemented it to save for the wedding. We both have a separate account, and we both get an allowance. We can do whatever we want with that allowance, and it’s the same for both of us, even though I make significantly more at the moment. If I want that $80 dress out of that money, fine. If he wants that $90 watch, fine. If we want to buy something for the home that costs over $50 and is going to come out of the joint account, we have to at least call the other person and discuss it prior to purchasing, and if there’s any trepidation it can’t be bought, at least not with the joint account.
This allows us to still have a level of autonomy without interfering with our budget. And our budget includes blow money for us as well, so that if we’re doing something together, it comes out of the joint account, but if I’m just going out with friends after work, that comes out of my allowance.
We have a simple rule. Neither of us can spend over $100 without each other.
Plus, we put a cap on certain categories for month. For example, I can’t spend more than $100 a month at sporting events and she can’t spend more than $100 a month on clothes. (no rollover)
We have a budget and all of our checks go into a joint account and come out of a joint account. We each get a weekly allowance to spend on what we choose and includes our clothing, entertainment, lunches if we go out, etc. Then we get $50/week to go out for dinner once as a family. If it goes over we pay with our allowance. If it is under we don’t roll over. Gas and groceries are also paid from the joint account as well as clothes for the kids and items for the home. We do talk about buying clothes for the kids and items for the home. We are usually together when we purchase these things, but if it is over $50 and I’m ae I usually call my husband to ask what he thinks. We never fight about $…..
My husband has ADD, which has a huge impact on spending and overall financial views. So, pretty much since we’ve been together, we’ve established a “check with me first” rule. Unfortunately, because he’s impulsive, he has to check with me for most items. Simply because he can’t always differentiate between what feels necessary and what is necessary. (He is getting better at putting off purchases, though.)
Of course, he also calls me to check if something is a good price or whether I want him to go elsewhere.
But I’m kind of shocked that more couples don’t set these rules without being told to. I guess, once again, our unique financial situation benefits us in this way. He came into the marriage with defaulted student loans. And we both have high medical expenses (and not much money) so it was more or less agreed upon that most expenditures have to be run past the CFO (me).
I think once you set down a basic value of what is and isn’t important, couples find that things are much easier. Unless, of course, you have an impulse spender. Because those under $30 purchases still add up very quickly…
Abigail´s last post ..Temper, temper
I’m married for 2 years now and though it’s not a good thing to fight about money…sadly we did until we decided recently to talk over about where the money goes, how we manage our finances etc….and honestly, it did make a difference. This is really a nice read perhaps because I could relate.
What has always worked for myself and my wife is discussing where every penny goes, and running any medium to high purchases by each other first. If couples aren’t honest about each other about where the money is going, it is a recipe for disaster. We have a joint account and have no problems whatsoever. We keep track of everything too, which is a big help.
My wife and I follow Ramsey’s approach. We spend every dollar at the beginning of the month. This includes our envelopes for dining, entertainment, clothing and all other items. Our method is that if it is in the envelope it is available for use. We are sensitive enough to ask the other if they need the money for anything, otherwise we spend as we each see fit. We have done this for quite a while and it seems to work well for us.