FINANCES
Instant Gratification or Delayed Gratification
It is generally believed that financial issues create the most conflict in marriage. When money gets tight, accusations often start. Almost without exception one partner in marriage spends a little more freely. The other may tend to be too tight fisted. It is likely that the best decisions lie somewhere between the two extremes.
Do you ever argue about money? Are you in conflict over what to purchase? Have you become involved in purchasing depreciating items on credit? I am referring to things like clothes, furniture, appliances or electronics. Do you use credit to buy your personal care, restaurant, recreation or other discretionary items? If so, you are like most Americans who are financial illiterate. Very carefully selected home purchases and business investments are worthy of credit purchases. Otherwise you should control your desire for instant gratification. Save the money for most purchases. Enjoy freedom from payments and the arguments that surround them.
During the last 65 years the United States became a place of economic prosperity unprecedented in human history. One would think this fact would create a climate for financial security and better relationships; however, that is not the case. Instead arguments over money often lead to divorce.
Fortunately, the opportunity for a significant number of families to experience financial stability, security and even prosperity has become possible. Unfortunately the expectation of a higher standard of living has risen and financial intelligence has been in decline in our society. The most valuable course I took in high school was Business Math. It served this 17 year old husband so very well that my wife and I eventually became financially comfortable through frugality and patient purchases. Today basic courses in financial life skills are not a high educational priority, if offered, in high school.
The finance industry promotes credit buying as a means of helping people appear to have a level of affluence which they do not really possess. Couples who are sucked into this imaginary prosperity become more vulnerable to conflict over money. Spouses may argue over the resulting monthly bills after the momentary pleasure of the purchase is long past. Don’t blame the retailers or the financial institutions. They market to make a profit. You are responsible to do your own due diligence regarding your money management.
The fact that you are reading this is a form of due diligence. Discuss the following principles of management with your spouse and come to solutions with which you are comfortable. Do not view them as cast in stone. They are suggestions, but they have served my wife and I well. The only time we experienced some financial stress was a period of time when we did not follow these guidelines.
Financial Principles That Produce Marriage Harmony
1. Pay cash. Choose together to be free from the financial traps set for you. They appeal to your pride, selfishness, impatience, greed and other undesirable qualities that support instant gratification. They have one thing in common: long term pain. Delayed gratification through saving to purchase or doing without unnecessary things will produce long term pleasure. This must be a joint decision for it to work because of the need for mutual sacrifice. The long term satisfaction of living free of bad debt will far outweigh the temporary pleasure of instant gratification purchases.
2. Spend only 25% of income on housing. A house is acceptable debt. But housing should not consume more than 25% of your income. You can get loans for much higher percentages but that doesn’t mean it is a good idea. Often the motive for housing above your means is pretence and pride. Keeping up unaffordable appearances will harm your marriage relationship by creating unnecessary financial stress.
Isn’t being together more important than the size or quality of your house. A home is not at house. A home depends on the relationship of the people in the house. Having disposable income is almost always more desirable than setting in a house you cannot afford. Needed maintenance and repairs become an argument. You may come to resent making the payment and even blame one another for the decision to buy a more expensive house than you should. The joy of owning your house can disappear quickly when the payments rob you of other pleasures. Solution: Buy within the 25% of income range.
3. Think of vehicles as transportation rather than a statement of position or affluence. Why? Their purpose is to get from point A to point B with confidence and safety. This is a hue problem area in financial management for couples. I personally believe that vehicles should always be bought with cash. That clarifies what you can afford. It is also amazing how much less freely people spend cash than when buying on credit. Just think how you would handle $25,000 cash in your pocket. Would you spend it all on one car? Yet you sign a contract to spend more than that by the month.
Virtually all credit purchases for vehicles leave you upside down instantly. By that I mean you cannot sell it for as much as you owe. You should never owe money on anything that is worth less than you owe on it. Cars are the greatest culprit. They constitute your largest depreciating purchase. The depreciation is unavoidable. Being upside down is avoidable. Pay cash for your vehicles. At minimum pay enough down to prevent yourselves from being upside down. Never consider the payment alone as your vehicle purchase criteria.
4. Always pay cash for recreation. Rethink your recreational mindset. Is expensive necessarily more fun? Start looking for pleasure in simple things. Brainstorm together with your spouse about the most enjoyable things you have ever done together. Identify the ones that cost very little. Make a note of them. Look at your list when you are discussing something to do.
5. Save money for special expenditures such as vacations, house maintenance fund, automobiles and bills that are paid annually. Place this money aside in a separate account every pay period. If either of you are hooked on instant gratification, you will struggle to enjoy freedom from financial pressure.
6. Giving is an essential part of happiness. If you spend all you earn on yourselves you will miss one of the most important sources of family pleasure. There is great satisfaction in giving to others who are less fortunate or to strategic charitable causes of concern to you. Living with financial discipline makes generosity possible.
7. Saving and investing should also be a part of your overall financial plan. This is not essential beyond the things mentioned above in solution #5. Investing may not be possible until later in life when your basic needs are met. It will be possible sooner if you follow these suggestions.
8. Discretionary funds should be equal. Marriage is a partnership. It is appropriate to have equal spending limits. Beyond those limits mean a discussion with your partner. Those limits may be very only a few bucks on a very tight budget or much more when you are financially comfortable. The amount simply needs to be agreed upon and within your means. These limits apply only to personal expenses, not to business purchases if you own a business.
9. If you talk to God, pray together about every financial decision. Also look up and read my article, “How I Learned to Be Content.”
Other Specific Suggestions to Reduce Expenses
The following are some things my family does that are fun and inexpensive.
Rent a movie or watch a TV program together.
We go to discount movies and we eat and drink before or after we go.
We take trips to public parks or other free public place like an arboretum.
We use coupons when we eat out and routinely choose lower cost places. High end restaurants are not even in our comfort zone even though we can now afford them.
We go to free events like festivals, parades, concerts, local tours and the like.
I join and serve in service clubs. We are also active in Christian service. These provide friendship, networking, and rewarding pursuit of the common good.
Satisfy your shopping itch at consignment shops and thrift stores. Frequently our furniture or clothes have been used. We look first to buy used furniture. If not, we wait for a sale. We recently waited 6 months for the new bed we had selected to go on sale.
You can engage in fitness together by walking or biking. Save the money to buy bikes and consider used ones. You can also go for walks in public parks.
We shop patiently. Check for sales and coupons. When we buy new, we buy at end of season knowing we will have to wait to use the product, like a lawnmower, or wear the clothes.
Be disciplined. For instance, I rarely buy a soda at a convenience store. I can get a quantity on sale at the grocery for the price of one at a gas station. When we travel we take a cooler of soda from home. Buy a quantity of non-perishables when they are on sale so that you will not have to pay regular price later. These things may seem too insignificant to practice. However, taken together they increase the value of after tax earnings considerably.
We make gifts to one another more about thoughtfulness than how much they cost. In the past, when money was real tight, we gave each other token gifts at Christmas and then went shopping together after Christmas to get each other something more for half the cost.
We entertain often with “Everybody Bring Food Events”. If you bear the cost of all the food for an event, entertaining may have to be rare, but not if everybody brings something. Some of these types of eating events include:
Host a card or game night at home with family or friends.
Invite several friends over for meals or picnics.
Watch athletic events on TV with friends.
Have a holiday party.
We try to avoid or stop engaging in expensive habits such as the use of tobacco. Also, watch out for get rich quick schemes such as lotteries.
Conclusion
The handling of resources can make or break your relationship. Please take these matters seriously. The things in this section about cooperation in marriage are very critical to your harmony. Marital bliss is hard to achieve if you barely have enough money to pay your obligations or when bill collectors are calling you. Some good materials on this matter include the books from Crown Financial Ministries (a biblical perspective), Dave Ramsey (for the beginner in financial management) and Robert Kiyosaki (for business owners and entrepreneurs). There are many others. Check you local library. Find some that seem to fit your situation best and dive in. Any good plan will inform and protect you if you follow it.
I believe you have the ability to become financially comfortable if you will take what I have suggested seriously. The freedom you enjoy from practicing responsible financial management far outweighs the immediate gratification of impulse spending. You can do these things. They are worth it to your marriage success. Please learn to cooperate in financial matters.