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Discussions About a Sudden Expense

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Yesterday, I wrote how my wife's friend getting married is a sudden expense for us. If you haven't read that article I highly suggest you do, or this article might seem out of place. I got an amazing amount of comments on that post, I want to take a moment to thank everyone who took the time to share their thoughts.

I mentioned yesterday that this expense is likely to be a minimum of $1800. It could easily run as much as $2500. Though my wife makes a very good income, my income has dropped in the last few months as I try to start up a variety of small businesses.

During the discussions of this with my wife, I went to what I do, logical arguments. I started to calculate how many friends she has and what the costs would be if half of them decided to get married. While that's an unrealistic expectation, it would hurt our financial goals. As I thought about it more, this is one situation where thinking logically isn't helpful for me. Behind the scenes I realize that it's more about these psychological factors:

  • The value of a dollar is different for me than my wife. In the past, my wife and I earned similar incomes. This lead us to keep our finances separate. Keeping our finances the same seemed the easiest and most practical thing to do. We automate some money into a joint account each month and pay common expenses from that. With my lowered income, this expense would be more than I make in a month. Thinking about paying more than a month's income this suddenly is causing me some stress. When I look at it from my wife's point of view, I imagine that she'd find it still expensive, but not to the point of causing her stress.
  • I'm no longer like everyone else. Well no one is really like everything (or anyone) else. However, I'm different than many other people in that I write about money everyday. As part of that, I'm trying to make the conscious effort to be as frugal as possible.

Yesterday I mentioned that this has the potential to completely change how we feel about money. While keeping our finances separate worked in the past, it might be time to think about combining our finances. I think this would alleviate some of the stress spending money gives me.

As for the decision to go to Spain, I think we are leaning towards going later this year. We'll be better able to manage costs at that point. This would give us the opportunity to spend more time with the couple. It would also allow us to plan a vacation of things that we want to do. My wife wouldn't be able to ask for the time off for another week, so we've got some more time to think about it. It may turn out to be a moot point by then with airfare and hotels likely to rise.

Posted on January 17, 2008.

This post deals with: ... and focuses on:

Couples and Money

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23 Responses to “Discussions About a Sudden Expense”

  1. Tyler says:

    What kind of marriage do you have? A business arrangement? It seems like you have serious marriage issues if you can’t combine your money, whether it be for one reason or another. Why even get married then? I don’t understand the point of why couples do this and I never will. Either you trust or you don’t trust your wife – and don’t give me any other reason people. It’s sad what is happening in today’s families… No wonder most marriages end in divorce with finances being the #1 reason for it. From now on, your future posts will be taken with a grain of salt (since learning this about you).

  2. Lazy Man says:

    Tyler, your reaction is one I’ve read before. However a number of people keep their finances separate for legitimate reasons. Our life experiences have made us very independent-minded, but that doesn’t mean we don’t love or trust each other. My wife’s parents had co-mingled finances and that played a significant role in their divorced and numerous problems for the whole family afterward. It would be short-sighted to ignore the lessons we learn from our elders.

    You might also note that personal finance guru Jean Chatzky recommends the approach we have taken until now.

    As far as future posts go, remember that this blog represents a journey. I will make mistakes along the way. You should be taking my posts (and just about anything else on you read on the web) with a grain of salt. If those grains add up, do some research, and make the best decisions for you based on your situation.

  3. Tyler says:

    True about taking things with a grain of salt, but I think that your decisions to keep your money separate all stem from the problems your wife’s parents had. It’s unfortunate that you don’t overlook this and that you don’t trust your wife because you’d realize that if you have a good, strong marriage and a wife you can trust and TRULY love, there would be NO PROBLEM with combining money. Seriously, if you can’t trust eachother with eachother’s money, what can you trust at all? I think this will be your demise, I really do.

  4. Lazy Man says:

    I think it depends on how you define “trust.” By keeping finances separate and with her making over 80% of our income, I think I’m actually showing more trust in letting her handle those funds if that’s what she feels to choose. She knows she has a resource who writes and researches personal finance everyday. I think giving her this freedom shows that I trust her a lot more than if I pushed her to combine finances. She could take that to mean that I want to handle the money because I don’t trust her.

  5. Lazy Man says:

    We don’t necessarily break down expenses that way. It’s actually very simple that if rent, food, electricity, etc. you take it out of the shared account. If you want to buy an iPod, you take it out of your own. Common sense guides that and it’s easy. We aren’t vigilant or anything with it.

  6. Bonjour! I think that whatever you decide works best in your marriage is what you should follow, rather than others think “should” be done or what the so-called “conventional wisdom” dictates. My husband and I have a joint checking account in which we cover household expenses, but he also maintains his old, pre-marriage checking account for his rather expensive flying hobby and anything else he wants to use it on. In fact, I encourage him to have his own account, as I manage the household account and want him to handle his own non-household expenses. I take my own personal expenses out of the general household account. We also each have a separate credit card that is in each of our names only.

    If it works for you, do it. I know of couples who’ve maintained separate beds for decades and are happily married. I also know couples who are miserable and fight all the time about money despite the fact that they maintain shared accounts in everything. There’s no one way, one-size-fits-all template to which every couple should adhere. THAT, to me, is the recipe for disaster: unrealistic expectations. Why a couple divorces is most often a reason that’s really only known by the couple themselves, and not because of anything as simple as the lack of joint accounts.

    Salut,
    Marjorie

  7. plonkee says:

    If you put equal amounts in to the joint fund each month, it might be better if you switched to unequal amounts, with your wife contributing more.

    Whatever system you’ve got, if it’s not working, don’t be afraid to change it. I’m sure there are as many ways of handling a couple’s finances as there are couples.

    FWIW I agree that it shows more trust for each of you to be able to spend your own money if you wanted to.

  8. I’m not an expert on couples finances by any means, as I’m a young, independent, single 20-something who doesn’t have to deal with such things as huge-cost weddings in foreign countries and 45 days notice. However, I know how much trouble money can cause to a relationship, as my parent’s relationship largely has died due to financial disagreements. I think it’s very important to maintain separate finances as a couple, but I imagine that one day when/if I get married, my S/O and I would have a joint account (like many people here have recommended) where we’d put a certain percentage of our income into savings for such last-minute need-to-spend items like this. That way, we could dip into those funds without too much ill will. I definitely think the “percentage of income” is the way to go, because that way it’s as fair as possible.

    As for this wedding, I’d recommend that you send her and you stay home. It’s her friend, you don’t even know this women, and unless you’re excited about a pricey trip to Spain, send your wife alone. She could possibly stay at a hostel (some don’t have age limits) or maybe even this friend that is getting married could arrange for her to stay as a guest of the family or close friend. This would lessen the costs greatly, and still allow your wife to go to Spain and be at her friend’s wedding.

  9. I think separate accounts are a great idea and joint accounts are only a matter of convenience. I’m even thinking that separate ownership might be a good idea as well. For instance, I hate the fact that we have a car together and I’m willing to jump through hoops so as not to drive it whereas my wife thinks we can’t live without it. If she was the sole owner of the car, we wouldn’t have so many discussions about it.

  10. Lazy Man says:

    I’m still contributing the same to the joint account as what I did before I lost my regular job. I find that paying more to the joint account forces me to save. It’s a little like paying yourself first. It does seem like it’s unrealistic and I may need to decrease this.

    I don’t really want to send my wife alone. And while it is an option, if it’s $1800 for both of us and $1300 for her, I can’t pass up the experience for $500. I’m estimating it being a week as well. These are rough estimate numbers, especially because we haven’t found a reasonable place to stay in Spain. Maybe hostels are an option, I have no knowledge of how they work – I just know that they exist.

  11. Seth says:

    Your problem reminds me of a book I read a while back Strapped. A thing I haven’t really seen discussed anywhere else is how much attending weddings can mess up finances for 20 somethings. Plane, hotel, and clothes can easily get to $500 in the US. Going to each wedding is a choice, we said no attending a wedding on the west coast, when my wife and I lived in Wisconsin. Another wedding we went to in Italy, it was hard to say no to our friends in Wisconsin and we loved Italy. I think the only conclusion is the more you save and make sure you are frugal where you can be the more you can say yes to flying to European weddings.

    Also you probably know this but flight and hotel prices will go up if you wait until summer. If you go don’t go between Jun-August if you can avoid it.

    Link to strapped:
    http://www.amazon.com/Strapped-Americas-30-Somethings-Cant-Ahead/dp/0385515057

  12. Tyler says:

    And this is why finances are the #1 reason for divorce. That is why the majority here support your ‘separate accounts’ deal. I’ll stick to what I’m doing and I know I’m better for it.

  13. Lazy Man says:

    Tyler, I don’t think there’s a right or wrong way here. It’s what works for you. Obviously shared finances does.

    I think the reason why money is the #1 reason for the division is pretty obvious (and not the split finances issue). I believe it’s because finances are a big deal in everyone’s lives. Even with combined finances, you still have to have two people agree on how to spend it. If money is the reason for a divorce it’s likely because they can’t agree on spending/saving of it.

  14. Lazy, how about splitting up the expenses that you pay based on the % of income that the spouse brings in. For example, now that you make 20% of the income, perhaps you should be paying 20% of the expenses.

    FT

  15. Lazy Man says:

    That’s what we did before, but I was bring in 45% of the income. It would be much easier for me to just pay 20% of the expenses, but I feel that’s the easy way out. By forcing myself to pay what I did before, it drives me to earn more. Necessity is the mother of invention.

    I think it is time to start to review this though.

  16. Lazy, I look forward to your discussion on you sort through this. Have you talked to your wife about this yet? Even though you guys keep your finances separate (like we do), remember that you both are a team for your family income.

  17. Will Draper says:

    I’ve been married for 37 years. We should have kept more things separate…separate means accountability, which is easy to set aside as life happens. As Covey sez, you need to plan with the end in mind, and that would have been better done with more mutual accountability.

  18. Brip Blap says:

    This thread makes my head spin. People worry too much. It sounds like you have the income to go. Go. It’s not $15,000. It’s one month’s income for a lifetime experience – how many people do you know who have been to a Spanish wedding? I have been to several weddings outside my culture – Korean, Jewish, etc. – I think it’s amazing to experience.

    As for joint vs. separate accounts – my wife and I immediately and completely combined our finances when we got married, then she quit her job. It’s still joint. It’s not a big deal. Unless you keep your separate account balances SECRET from each other, it’s still effectively joint – you understand your joint position and overall financial situation. MDJ’s got a point – it’s still a family decision even if you have separate incomes.

    A Writer and Her Money said it best, though. Do what works for you. My wife and I completely and immediately combined everything in our lives right after marriage and 4 years in we’re still happy with that arrangement. Friends, family and others do stuff a lot differently, keeping stuff separate, etc. – and they are still very happy. The method doesn’t drive the happiness. If there was a FORMULA for happiness someone would be rich selling it. Different strokes for different folks, as wise old Arnold once said.

  19. Dorothy says:

    I think the whole discussion of mingling money very interesting. My partner and I (now going on 13 years) had our money separate for the first 9 years of our relationship. It was really a financial advisor that helped us think about closing all our accounts and having one. We did that several years ago, consolidated our little debts (that added up big to $15,000) paid it off, and are going great. It took us a while to get there, but are very happy with the current arrangement. THere are many complex dynamics around this decision. Some are personal, some to do with family history and dynamics, and some are gendered (we’re both women). I think that women should have access to their own money always. IT took us a while but it works now for us.

  20. NatalieMac says:

    While financial security is important, I think it’s also important to think about other things, too. There are friendships and experiences that are priceless, and well worth a reasonable financial cost. What’s the point of having enough money to be financially secure if you’re going to sit at home and miss your friends’ life celebrations because you’re worried it will cost too much money to celebrate with them? What’s the money for if not for covering the occasional unexpected expense?

  21. Tim says:

    I never knew that money was so complex an issue. For us, we don’t consider how much either of us make. The expenses get paid out of our joint account that our pays are directly deposited. Investments get maxed out equally for both of us. Whatever is left continues to go into additional investments or want items. We maintain separate accounts for credit history and bank history purposes, but those accounts are funded with around $5. dividing up expenses and figuring out ratios just seems overly complicated to me and time consuming.

    again, if it is really important to her to go, then it is a want item and that’s how you should look at it and budget for it. you not going is still $500 saved not spent if it will cost $1800 for both and $1300 for one. if you are saying well it’s only a $500 difference, then you should probably re-look at the cost of $500, especially if you are indifferent or on the fence about going.

  22. When I traveled in Europe, I used this site to find hostels (and a few books on the subject as well). Just make sure to stay somewhere clean! There are many scary hostels, but some nice ones as well. In Budapest, my boyfriend and I stayed in a hostel in our own private room and it was much cheaper than a hotel.

    http://www.hostels.com/en/es.html

  23. deepali says:

    It’s just money. It should be a tool, not your end-all, be-all. If you want to go and you can afford it, then go and don’t worry about it. :) Hell, even if you can’t afford it fully (I’m not saying charge the whole thing, but if you have to cut back here and there a bit in the next few months, so what?). Life is for experiencing, not counting your pennies.

    30 years from now, what are you going to think about this? What do you *want* to think about this? That’s what you should do. Don’t overthing, just satisfice. :)

    As for the secondary issue – how you and your wife choose to split finances is 100% your decision. You are the only two people who really know what’s going on in your relationship, so you’re the only ones who know what is really best.
    Hopefully, you’ll find something that works. Good luck!

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