It can be very difficult to get your spending under control. This is even more true when you are married or in a serious relationship.
That’s because your idea of necessary spending might be your wife’s idea of being foolish. Those different view points can lead to serious problems at home and a stalemate when it comes to resolving financial problems. No bueno.
I believe that if you have a partner, the only way be successful is if you are both willing to work together and compromise. Think tag-team – and wasteful spending is the common opponent you both need to defeat.
I’ve noticed that having agreement of purpose within the family is the single most powerful determinant of success or failure. Let me repeat that for you, it’s pretty important.
Having agreement of purpose within the family is the single most powerful determinant of success or failure.
Are you and your spouse on the same team? Are you both crystal clear on who the enemy is? Do you sometimes make the mistake of thinking your partner is the enemy?
You might be all fired up and ready to take on the world, but if you and your spouse are at odds, you’ll end up fighting each other rather than using that energy to defeat the real bad guy. How do you and your partner get together on this?
As I see it, there are 5 steps:
1. Find out if you have “goal agreement.”
I’ve learned (the hard way) that what I think isn’t always true or important. Shocking…I know. If you really want to get on the same page with your spouse, find out what’s important to them about money by asking. Then talk about your priorities. Chances are high you share the same values. That will come in handy when you are deciding what to keep spending on and what to cut. And this is important even if you later decide to separate your finances.
When it was time to launch the attack on our spending, I didn’t deliver a prepared speech. Instead, I just asked my wife what was important about money to her.
She told me that she valued family and security. As it happens, that’s what I value as well.
At that point, we had a filter through which we could make intelligent decisions. Ask your partner why money is important to them…and listen. You might learn something like I did.
2. Define overspending.
Once you are both clear about priorities, it’s very easy to identify useful and wasteful spending.
In our case, our priority is travel because my wife has family overseas. We worked out a budget that provides a yearly amount she uses to visit her family. Our own “vacations” are very frugal because a big chunk of our vacation money is used to defray her travel costs. We made this a priority. For us, it’s not overspending. Sure the money we spend is money we can’t invest for our future but that’s OK. It’s a trade-off we’ve made consciously and we are OK with it.
In our case, going out to eat is usually overspending because neither of us really enjoy it to much. Since it’s not a priority, we recognize that money spent dining out is money we won’t be able to use towards those things we value most. It may seem strange to you that we spend a great deal on travel yet we are unwilling to go out to dinner very often…but it works for us.
How do you define overspending? How does your partner define it? Please don’t try to go to the next step until you agree on your terms and priorities.
3. Keep track.
Once you have agreed on your goals and defined what overspending is, the next step is to set up a system so you know if you are on track or not.
There are a number of methods you can use to do this. Personally, I like You Need A Budget. It’s a very inexpensive tool that helps get my entire family involved in the tracking process.
4. Monthly meetings.
This is the most critical step. You have to arrange a set time each month to discuss your progress. In our case, we just go over the bank and credit card statements every month. We have this meeting with the kids too. We discuss why we made certain purchases and we offer ideas on how we can do better. It’s a process…and we are getting better at it.
5. Be ready – you may not win every round.
I’ve noticed lately that we spend more money during the summer. We can certainly cut down on some of the expenses, but at the same time, it’s a fact of life and I accept it. Fortunately, the system I use to track spending calculates a moving 24-month average, so the high and low months average out. I am learning to be flexible albeit slowly.
Sometimes, in the middle of the month, I’ll see spending go a bit too far. Often, I won’t say anything. I just wait until we have our monthly meeting. I’d much rather my kids or wife bring it up. In other words, I’m a big fan of “teachable moments.”
Do you think it’s possible to make financial progress without having your partner on board? What other tips do you have to help other Wealth Pilgrims in sending overspending to the ER?