Burying the Lead
I'm feeling sheepish today. My friend Dave rightfully called me out regarding my recent post titled Chess vs. Checkers. In it, I shared the story of a friend who planned to buy a used vehicle with cash, only to be talked into financing a much more expensive new vehicle by the dealership. As Dave put it, I "buried the lead." He was referring to the following excerpt toward the end of the piece:
"Further, he now has to tell his wife that he just signed up for a $765/month vehicle payment just one year after promising each other they wouldn't go back to playing the debt game (after grinding their way out of the last one)."
While Dave didn't disagree with the overarching piece, he believed this detail was the real story. Dave is correct that this man's decision to make a major financial decision without his wife's buy-in was a significant event that I undersold. Why did I whiff on this? It certainly wasn't intentional. After receiving Dave's e-mail, I figured out why: It's common! While Dave, countless others, and I think it's absolutely absurd that one spouse would make such a major financial decision without their spouse's buy-in, it's far too common.
In far too many families, spouses are living in little financial silos. Either couples run separate finances and split accounts, or one spouse makes major decisions without their partner's involvement. Both of these scenarios are destructive.....even when "it works for us," as people often like to say.
Regardless of how well someone believes separate finances or single decision-makers are working, I can practically guarantee they aren't doing as well as if they had combined finances and unified decision-making. The data shows this to be a near-universal truth, with exceptions limited to addiction and abuse. We are better together.....including our finances.
A newlywed client recently asked me about this very topic, as they were trying to navigate how best to combine their financial lives. Here are my cliff notes:
No more "mine" and "yours." Everything is viewed through the lens of "ours." This includes income, assets, debt, expenses, etc.
Regardless of who makes how much, whether 50/50 or 95/5, both spouses have an equal vote on what to do with the income.
If a major decision needs to be made, no decision gets made until both spouses agree on the final decision. If there's disagreement, negotiations must continue.
If a purchase falls within the scope of the monthly budget, spouses should have a green light to pull the trigger. That's what the budget is for, and so long as the purchase honors the spirit and boundaries of the budget, game on.
Speaking of budget, both spouses should be involved in the setting of the budget each month. One spouse may create the budget, but the other needs to affirm and/or tweak.
Set a dollar amount for purchases that need to be discussed. For Sarah and me, it's a few hundred bucks. If either of us is going to drop a few hundred bucks on a single purchase, we at least run it by the other. It's usually a 1-minute conversation, but the courtesy matters.
We're always better together. Let finances bring us together, not pull us apart. Good call-out, Dave! Appreciate you!
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