I read a number of financial blogs. And most, if not all of them, will tell you the secret to wealth is to spend less than you make. Pretty much common sense. If your’re single, it’s up to you to make the decisions that will help you financially. Or if you are part of a “couple”, decisions need to be made together. But what happens when the couple is not on the same page?
A few years ago I was giving financial advice to a couple, who we will call the Smith’s (I will also change a few other facts to protect everyone involved). They called me to set up a meeting because they felt things were not quite right financially and they heard through the grapevine that I did financial counseling.
I met them at their house and took a look at their finances, asked a few questions, plotted things out and discovered that they were spending about a $1000 more per month than they were making. They were shocked.
The husband wanted to reign in the spending and set up a budget to get their house in financial order. The wife had no interest. And she was the problem.
As I went through their finances, it soon became apparent that she was wasting money. She would just spend money, usually claiming that it was for “her business”. She had just bought a new expensive vehicle for “the business,” was buying all kinds of computer hardware, software, and other business “tools” for “this business.” She would buy herself clothes for ”business purposes”, and eat meals out because of ”business”. Unfortunately – there was no business. She had maybe one or two customers, spent maybe 15 hours a week “working,” but everything else was play. This was an expensive hobby, not a business. She could have made more money by working at a fast-food restaurant, and saved thousands of dollars in unnecessary expenses.
I counseled them to quit this business. He was in agreement. She was not. Her parents did not help matters – they encouraged the couple to move in with them on the farm. The Smith’s were in their late 30′s!
The wife refused to meet with me again, and refused to see any financial counselor – she did not have a problem, everyone was just picking on her. A few months later I got a call from the desperate husband. They were sinking faster and faster…
So what would you tell this man?
I told him that he probably needed to take drastic measures. The credit cards were in his name, so he should call the credit card company and take her name off as an approved user. He should also cut up the current credit cards (he didn’t use them). The bank account was also in his name and I told him to cut up her ATM card. Then he should set up a budget, give her an allowance, and stop feeding the problem. If she could not restrain herself, he needed to help her by cutting off her access to money.
He wasn’t sure if he could do it. I said it was his choice. But if he wanted to get out of this financial Titanic he needed to take action.
I never did hear from them again. I still wonder what has become of them. It is tough enough to manage your money when you are on the same page. But when you are on different pages financially, it is a nightmare. Which is why I guess finances, or should I say disagreement over finances, is one of the leading causes of divorce.
If you are in a relationship, how do you get on the same page financially?
