Are You Financially Compatible? - Talk About Marriage
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post #1 of 8 (permalink) Old 08-14-2015, 02:36 PM Thread Starter
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Are You Financially Compatible?

You and your lovebug have determined you’re totally compatible after talking about whether you want to have children, whether the toilet paper hangs from the front or the back and whether you’re Team Pepsi or Team Coke. That’s awesome, but have you determined how compatible you are financially?

Let’s say Jack and Diane make a similar salary. Diane has a small bank account, no retirement income, a brand new car and new furniture in her apartment. By contrast, Jack has a fully vested retirement fund, a healthy bank account and a nine-year-old car.

It’s not hard to see that Jack and Diane view money differently.
Whereas Jack is all about saving for retirement and rainy days, Diane prefers creature comforts. If the couple makes enough to both save and spend, great. But if the couple has to choose or they cannot agree on how much to allocate to each, well…

This potential financial stalemate is why it’s important to determine financial compatibility before you sign the lease on an apartment or cut the cake at the wedding reception. Although compatibility in regards to religion, political affiliation and children is important, financial incompatibility most often leads to divorce. Identifying whether you’re financially compatible or not isn’t the magic cure, but it can give you a fighting chance.

Typically, there are two types of people, the Savers and the Spenders. According to the above scenario, Jack is a Saver while Diane is more of a Spender. Both camps have their extremes and their moderates. For example, an Extreme Saver might save every free dime they have, with possible detriment to their health and safety. They tend to eat cheap processed foods over healthier meals or drive a car in need of repairs rather than a new vehicle. Extreme Spenders don’t save anything, sometimes to the point of foregoing financial responsibilities in order to buy what they want.

It’s obvious that an Extreme Saver and an Extreme Spender are not financially compatible and could face some serious issues down the road. But those types of issues are relatively rare since both can generally be spotted almost immediately (think Alan Harper meets Peg Bundy). In most cases, it’s two moderates or a moderate and an extreme that will meet and have to work through compatibility issues. Moderates in both camps save and spend, it’s just a matter of priorities for them. If they both agree on how to save and spend money and on how to handle financial matters, then things are fine. But if there's a disagreement, that’s when the ability and willingness to compromise comes into play.

Going back to Jack and Diane, let’s pose these three questions:

1. Should a couple maintain a joint checking account or keep personal finances separate?

• Joint accounts

• Separate personal accounts, but a joint account for household bills

• Separate accounts and each pays an equal portion

2. At what amount does a person need to consult his or her spouse before making a purchase?

• $100

• $200

• Never

3. One of you gets a bonus from work. What do you do with it?

• Spend it

• Save it

• Save some, spend some

Savers and Spenders might agree or vehemently disagree on answers to these questions. With the first question, Jack might want to know where all the money is at all times – so he might push for a joint account. On the other hand, Diane might not want Jack to know the extent of her spending so separate accounts would be ideal. Considering the second question, Jack might consider $200 an exorbitant amount to spend without consulting his spouse, but if the expenditure is for new tires or another necessary item, Diane might not bat an eye before writing out a check.

In reality, it’s the third question that tends to cause the most battles beyond not having enough money to make ends meet. Spenders want to spend, Savers want to save and sometimes the twain just never meets. The decision can come down to who earned the bonus, which can lead to contentious results and create serious resentment that lingers throughout the relationship.

This is why is it’s important for a couple to determine their financial compatibility early on. The sooner the problems are identified, the sooner compromises can be worked out and agreements put into place to handle these matters. Having the information needed to handle difficult situations regarding money is a much better approach than “winging it” and discovering you have a serious, possibly relationship-ending issue.

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post #2 of 8 (permalink) Old 08-14-2015, 02:57 PM
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Re: Are You Financially Compatible?

We are compatible, and were from the very beginning. We are both just a little frugal, we save a lot and keep debts low, but are happy to spend on our goals and mutually enjoyable things like travel. She likes jewelry, and I like electronics, but what we spend on them depends on the overall situation and what we can easily afford. We consult on non-essential things above $200 or so. We use a joint account for almost everything and we both deposit most income in there directly, but have separate accounts as well that don't get much use. Bonuses - if they amount to much - are discussed and we mutually decide what to do based on circumstances. If significant, we'll usually put most towards paying down a debt like the mortgage or car, and perhaps spend a little on dinner or a vacation.

Bottom line: if we can fund our retirement accounts for the year, can pay all our bills, and can maintain a minimum in our emergency fund to cover at least 6 months, we don't mind spending on non-essentials. If it's essential, we'll find a way to pay for it or take a loan if necessary.

Love is an ideal thing; marriage is a real thing; a confusion of the real with the ideal never goes unpunished. - Johann Wolfgang von Goethe

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post #3 of 8 (permalink) Old 08-14-2015, 03:21 PM
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Re: Are You Financially Compatible?

Honestly I just grazed at this one. I didn't read it all. I must say that financial compatibility is of major importance. In the top three factors for sure.

I liked question 2, I was in business with my dad and his line was $20$ Well at least it felt like that. At times our marriage was that tight as well. not because we were over controlling, but because we were on the edge constantly. I am so glad my inlaws did not lavishly spend on my wife.
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post #4 of 8 (permalink) Old 08-14-2015, 03:36 PM
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Re: Are You Financially Compatible?

This is equal in importance to sexual compatibility, both being essential to a good marriage.
A serious spender and a serious saver are going to be in constant conflict.
Two extreme spenders are going to die broke.
Two extreme savers will never leave the house other than for work.
I don't think you can go wrong being a moderate saver.

I'm the sole breadwinner and have been for most of our marriage, so some of these questions aren't applicable.
Our non-consultation limit is roughly $100.

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post #5 of 8 (permalink) Old 08-19-2015, 11:32 PM
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Re: Are You Financially Compatible?

My husband and I are compatible but he feels like he has to make things up to me. I don't know why since I don't complain about the past. We were very poor when we married; so poor that we couldn't afford a wedding. We lived in a tiny apartment with no furniture.

We just bought a house and my husband is already talking about buying a larger one in 2-3 years. I don't agree with that choice since we won't be having kids; my husband had a vasectomy years before we met. A couple with no children or extended family living with them does NOT need an 1800+ square foot home. My husband keeps talking about the raises he will receive and our car which will be paid off in 2 years. Just because we will have extra money, it doesn't mean that we should spend it.

My husband says that he wants to give me so much because he feels bad about how poor we were before. My response is that he needs to let go of the past and he better not make a peep about higher utility bills, more property tax and a higher mortgage once we move into the monstrosity.
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post #6 of 8 (permalink) Old 08-25-2015, 12:22 AM
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Re: Are You Financially Compatible?

I'm a Saver... I married a Saver...

I would FREAK If I was with someone who couldn't live within their means.. it would never work.... I would see someone like that as my moral enemy ...they'd find ME controlling & I'd find them irresponsible with $$...while I watched all our dreams slowly die.. If one makes A LOT of money, keeps it separate.. this may still work for many...with those differences....

But if one doesn't have a lot .. (we're a blue collar larger family) .. it matters a great deal.. for harmony.

We understood each other, on the same page long before getting married.. we had a nice stash for a house & our wedding paid off before we walked down the aisle..

6 yrs in.. we were moving into a country home w/ land (was our dream)... while he was still working at a Grocery store.. We're admittedly a little tight, would never in a million yrs buy a new car for instance (we prefer older so he can work on them -he says this too)

But if it's something we care about family vacations.. or our hobbies....what the kids need...we will go all out... so we're cheap in some areas -where it doesn't mean all that much to us (like fancy cars, expensive clothes) but in other areas.. we'll SPEND...and enjoy heartily.. we'll splurge paying $400 a night at the Poconos for that "Champagne Towers" room...

Or driving 18 hrs to Disney , doing 3 parks in a week at near $400 a day for us all to get in.. (you gotta enjoy life too!)...where we would save is where we stay.. a little cabin for $75 a night -with a stove, fridge, loft for the kids.. We make it work ...

I never go ahead of my husband for any BIG purchase, nor does he.. we always talk about these things together... come up with a plan.. no surprises..

I've worried when the funds were low, the what IF's.... like right after putting it all down on our house... I have a NEED for a stash for many rainy days ... what I call a "torrential downpour"...just in case..this gives me peace of mind.

My husband probably spends the most on Tools... doesn't sound very exciting (if we're in Sears, he's in the Craftsman aisle)...he prides himself on his ability to handle most jobs himself.. which has saved us a ton of money over the years....

Me.. I probably spend the most on our Vacations...I enjoy finding new places to visit, explore...

As to the questions.. 1) we always had "Joint"... 2) we always consult... yeah the $100 - it most definitely gets a mention.. like he may need Parts for a mover or his plow.. he really doesn't need to tell me this.. but he always does anyway.. often I am the one ordering the parts...

3) If either one of us got a Bonus.. we'd both have the same answer.. goes into the Savings.. then its there for whatever we may decide to do -whenever..

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post #7 of 8 (permalink) Old 09-02-2015, 03:29 PM
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Re: Are You Financially Compatible?

When I met my ex, we were both barely making it. She was recently divorced with a 5 year old and debt from her previous marriage. I was single but had some debt of my own. We acually decided to live together so that we could save some money. It worked out well for us at first. Together we saved several thousand dollars. Then we spent most of that on our wedding. We got most of it back, but shortly thereafter decided to buy a house and there went our savings again. The house needed work, we sank money into it,. We had another child and that upped our expenses. She stopped working, but I was making enough to cover everything. We drove old cars, we sacrificed. Eventually things got better. I was successful and made lots of bonus. Our spending went up. Then I almost died and decided to start my own business. The money was better than before but the cash flow ebbed and flowed. When we did have money it was usually needed for something we had put off - a stove that worked or a car that needed replaced. I came to a point in my life where I finally accepted that I would have no money until the kids were grown. Around this time my ex decided we needed to go on vacations. So we would got to Myrtle Beach or Hilton Head or the Outer Banks for a week. We lived the American dream. We ran up the CCs and then refinanced the house to pay them off. Then we ran them up again. I felt like a hamster on a wheel. When the mortgage melt down happened I lost almost all of my business over nite. Going from doing 25 jobs a month to two or three. Clients filed BK on me and I lost thousands I had been counting on. I burned thru my savings, I sold my stocks, I liquidated my 401k trying to stave off the wolves.I ended up filing BK myself. When I told her I had no choice her response was "you do what you want to, I don't want to know". In the meantime my ex worked a few low paying jobs after the kids were all in school. Most of these jobs ended up costing me money as well - lost income, additional expenses etc. I could never explain this to her without her getting upset because she was "helping" I never saw any of her money. I never asked for any. I eventually got my business rolling again but never got over the hurt of her desertion. Later on, she got a better job making more money and bought a brand new car. She paid it off in less than 18 months. But I continued to fund everything else - taxes, insurance, maintenance, her cell phone, the mortgage, utilities and our daughter's college expenses. She was supposed to be saving for our daughters wedding and our retirement. What ended up happening was she spent all of her money on new clothes, herbal supplements for the quack diet of the week, girls get aways, and other various other non-essentials. I still actually started to save some money, which was promptly put back into the house on a new roof or to cover some emergency such as her overdrawing her bank account. Finally she decided we needed to go to Disney for our daughters college graduation. I explained that we couldn't afford it when she told me how much it would cost. I offered cheaper alternatives.But she had already decided. She talked my DIL into paying half. Then told me I owed the DIL our half since she had already paid for it. It basically took all of the money I had put back for taxes. Then when the time came to go. she had no money to contribute towards incidentals and so I came up with even more money. So the short answer to the OP question of financial compatibility is yes, early in our marriage due to our circumstances. Later on, not at all. I wanted to secure our future, she wanted to spend it now (especially if I was paying for it). The financial incompatibilty was a driving issue in the end of our marriage.

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post #8 of 8 (permalink) Old 09-16-2015, 03:26 PM
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Re: Are You Financially Compatible?

We were never financially compatible from the very beginning and at the start of our marriage I knew this would be a big problem. She came from a rich family where everything was basically handed to her and didn't have a very good job to provide money for her "habits". I came from a family that had very little but I had a promising job so I figured I had enough money. She said she wanted kids right away and I agreed before we were married on the condition that she continue working and doing her share financially. I was very clear about that. After we were married I found out she lied and never had any intentions to do this. In addition, she was ruining us financially spending every spare dime we had. I had to take action and took all the money I made out of our joint account just so I could pay the bills. This was met with HELLFIRE from her side of the family. I was always thought of as a no good ******* because I expected her to do her share and I didn't have millions for her to spend at her will.

So you get the drift here, we were doomed from the start. I felt taken advantage of, she got pregnant right away after lying that she would go back to work and then spent us practically to the poor house. Now I had to make a decision to leave and introduce our unborn child into a broken home or try to fix our unfixable marriage. I made the WRONG decision to stay and should have left her while I was already broke.

Men should look into very closely the spending habits of any prospective wife and whether she will help you with finances and do what is necessary to keep the family financially solid instead of undermining your every attempt at doing this. Not doing this will kill your marriage.
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