Creating a Savings Strategy with Your HusbandIs money tight for you right now?

Around this time of year, money tensions can easily rear their ugly heads in marriage. I spend a lot of time writing about sex, but money is the OTHER big thing that couples often have conflict over. What do you do if you’re a saver, and you’re married to a spender? Or maybe your husband is such a saver that he thinks basic necessities are luxuries (Kleenex? Who needs Kleenex? Toilet paper or paper towel works just as well!).

I also know many of my regular readers are currently dealing with unemployment, or with lower than expected earnings. And so life is especially tough.

My husband and I have lived through every sort of money issue: there were times we had hardly any income at all, and there have been times when we haven’t had to worry about money. We’ve budgeted every last penny, and we’ve splurged. So let’s look at three different money scenarios where conflict can occur.

1. You Have Enough Money to Meet Your Basic Necessities, but You Don’t Save Well

Let’s talk about the basic problem with money in this scenario:

When we have money, we tend to spend first, and then, after we’ve spent, asked ourselves where the money went. Savings usually comes after spending.

We may even do this when we’re budgeting. We figure out what we need for food, and rent, and utilities, and gas, and then we add that all up, and whatever is left over we save.

The savings always is calculated last.

But is savings really our last priority? What if you need to get out of debt in two years? Or what if you really, really want to be able to purchase a house, or renovate your kitchen, or pay for a child to go to school? What if you know you’re going to need a new car in two years?

Chances are that kitchen renovation and that new car (even if it’s a new used one! Those are the only kind we buy) are higher priorities than “entertainment” or other things on your budget list. So here’s what we started doing early in our marriage:

The tithing and the savings comes off FIRST. Before we did anything else.

As soon as we get the paycheque, money is moved into a savings account or an investment account right away, automatically. Even our tithing and giving is done that way; our church now has direct deposit, and the other charities we support are on automatic deductions. So these things are paid for first.

If the savings just sits in your regular account you’ll likely touch it, and it will be difficult to tell how much you have. So move it over! You can open a savings account of course, but in Canada we also have “tax free” savings accounts where you can stow away up to $5000 a year, and the investment income it earns is tax free. In the U.K. they also have individual savings accounts that operate the same way (I’m not sure about the United States or Australia; leave a comment and let me know)! These are great vehicles because the money is put aside, it’s still relatively liquid (meaning you can get it out quickly), but you don’t have to pay tax on the interest. I’m not talking about retirement savings accounts where the money earns income tax free; that’s something separate, and also important. But you shouldn’t use a retirement account for shorter-term savings, so you’re going to need something else.

I’ve heard it recommended that you ALWAYS save 10% of what you earn, and you ALWAYS tithe 10% of what you earn, so you ALWAYS live on 80%, no matter what your income bracket. That’s what I’m raising my kids to do, too–save and tithe off of the bat, and if it becomes a habit, then you just always do it. Of course, the 10% is a minimum; you can choose to give more and save more. But you must always do the minimum, no matter your income, and you’ll find that you don’t run out of money.

Now, if we know our savings is paid for, and we know our tithing is paid for, it really doesn’t matter where the rest of the money goes. If we spend too much on hair cuts this month, that’s okay. If I splurge on Starbucks, that’s okay. As long as I’m not running up a credit card bill, and I’m paying everything off in full, it really doesn’t matter what I spend in each category as long as my savings and givings objectives are met.

'Budget' photo (c) 2012, Tax Credits - license: never could do that envelope thing, where you spend only a certain amount in each category. I always had too many categories! But what I realized was that if I did the savings first, then it didn’t matter.

This can also avoid a lot of marital fights over where the money is spent. “You bought what tool!?/!” “You stopped at Starbucks again?!?” If you both now your savings obligations are met, then if you each splurge it isn’t as big a deal.

The big caveat to make this work: spend cash. If you spend on credit card or even on debit you often don’t know how much is in the account, and it’s easy to wrack up bills. So I firmly believe in spending cash, I just don’t think that we have to divvy it all out into different categories if we’re already meeting our spending and giving goals.

2. You Don’t Have Enough Money to Meet Your Obligations

Of course, you still must have money in the bank to meet your mortgage obligations or your utilities. You could be going through a period where you just can’t even meet those “must meet” obligations because of unemployment or too much debt. If you’re in a position where you can’t pay the rent, and the mortgage, and the utilities, then you’re in a rough spot. If it’s only temporary, that’s one thing. But in the long run that’s untenable, and creates so much stress. You don’t want to always be paying off one credit card with another, because eventually that will come crashing down.

We all have images of where we want to be financially: we want a house, we want a car, we want certain furniture. Perhaps that just isn’t possible right now. There’s nothing wrong with living in an apartment for a few years to save for a house–even if it means selling your house now. Lots of people grew up in apartments (I did!) and they turned out okay.

I know people who have gotten into worse and worse situations because they just won’t sell their homes and downsize. To them it feels as if they’re failing their kids. Their kids need a big house, and so they can’t leave it.

What your kids really need, though, is stability and an example of responsibility. It isn’t failing to have to downsize. It’s just being responsible. And look at all those little homes that were built right after World War II. They’re tiny–many less than 1000 square feet. And yet lots of families raised 4 or 5 kids in them. That was normal a generation or two ago. It’s okay to go back to yesterday’s normal. Perhaps yesterday’s normal had something going for it–when the house is tiny, people tend to hang out in the living room, so there’s a lot more family time!

Then, when you’re downsized, you can start saving again for your goal of a bigger home. But there’s no shame in living within your means. You’re actually teaching your kids valuable lessons. I know there’s the added complications of moving out of school districts, or leaving friends, but please, don’t risk bankruptcy over maintaining an ideal of what your family should be. And if I could offer a suggestion that sounds radical: move to a smaller town if you have the kind of work that is transportable. Honestly, small towns are so much cheaper. If more people got out of the city perhaps they’d realize how high the cost of living is in many urban areas.

3. You Want to Save, but Your Husband Spends Too Much

The above two scenarios assume that you’re roughly on the same page, and can agree to a savings strategy. But what if you’re married to someone who spends a ton, and won’t agree to save?

This is a tough one and my advice would depend on how dire the situation is. If he is putting you into so much debt that the family’s future is in peril, seek help. Find a mentor couple to come alongside you. And–and I often don’t advise this, but it may be necessary in this case–get separate bank accounts. See if you can get him to agree to having the main family bank account in your name only so that he can’t touch it, and then give him an account where he can have control of some money, just not all. I am a big believer in joint bank accounts, but there is a time where it is not wise.

If he just won’t save, but he isn’t actually endangering the family, then how about talking to him like this, and suggesting, “Honey, how about we figure out what’s reasonable to spend on the household each month, on food, and medicine, and toiletries, and things like that, and then I get that money at the beginning of the month to do with as I please, as long as the house doesn’t run out of toilet paper. Good idea?” Then you have that money, and if you’re really frugal, you can stick what you don’t spend in a savings account. You can become a super shopper, knowing that every dollar you save at the grocery store goes towards your savings goals.

One last rule: like everything in marriage, communication is key. And communication around money is more difficult because we all have different attachments to it. So if you’re going through a difficult conflict about money, work on your friendship first. Try to laugh together. Take walks after dinner and talk. Keep doing fun things together. When there is a foundation of goodwill in the marriage it’s easier to tackle these things. When there’s only conflict, these things have the power to drive us apart.

I have a ton more I’d like to say, but this post is already really long, so I’m going to stop there. But why don’t you chime in–what do you do when you’re on different pages about money? What budgeting technique has worked best for you? Let me know!