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Philosophical Differences

February 6th, 2007 at 03:59 am

DH and I are mostly on the same page financially, but there are a few areas where we’ve got philosophical differences. We agree on never carrying a credit card balance, on putting 20% down on a home, that money that’s been invested is basically locked away, and that it’s good to have an emergency fund in case he gets laid off.

Cars are one area of disagreement. I was taught to look for a car that was 2-3 years old and 20k – 30k miles, while he and his family believe in buying new. I hate car loans while he believes anything under 2% is a great deal and should be taken advantage of. Having a really “nice” car gives him a lot of pleasure. He cares about horsepower, I care about trunk space. He’d like to get new cars every 5 years; I’d like to make them last at least 10. (To be fair, I have to admit that I only kept my last two cars for 5 years each, although they did both hit 100k miles.) When I got pregnant, we bought a new SUV for me, with all the latest side airbags and so forth. A year later, we bought him a new car. We compromised in that I agreed to take a $7k loan at 1.9% in order to get the car he really wanted without dipping into our emergency fund or selling off investments. I remind myself that it’s only costing us $300 over the life of the loan, and I’d gladly spend $300 on a present for him.

When we met, I was putting 15% into 401k and he was putting in only up to the company match, maybe 6%. We compromised at 10% each for a few years, but had to cut back when we went to one income. Currently we don’t like the funds in his 401k and his company doesn’t match, so we are prioritizing contributing to the ROTH IRA first.

Gifts are another area where we differ. His family is very generous with presents, and DH is naturally generous as well. I probably tend to be a bit on the cheap side. With friends birthday parties and the like I sometimes worry that giving too expensive of a gift will make the other person uncomfortable, as they may feel under pressure to reciprocate. In our budget I’ve just allocated an envelope for gifts and funded it according to how much we spent the previous year rather than trying to bring the amount down.

Traveling is very important to DH. I love it too, but don’t mind giving it up for a few years so I can be a SAHM. I think the cutback in traveling is what pinches the most about not having two incomes. DH really wanted to set up a trip to Hawaii this year, but unfortunately we don’t have the money right now, and have some higher priority items to save for first. He talks a lot about the places he’d like for us to go see, and I have to be careful not to squash his daydreams.

I like to get down and dirty with the numbers on our spending. For years I would periodically download all our transactions into Quicken, make lots of graphs, set up a budget, and contemplate the results. Quicken is impossible for truly tracking and sticking to a budget, however, and I am much happier since switching to an envelope system. I make up spreadsheets with our mutual funds and net worth, and puzzle over what I should understand as a result. I sometimes get too caught up in getting all the little details recorded accurately rather than in comprehending the big picture. DH, on the other hand, is more intuitive. He will look at our bank balance, mentally subtract the large upcoming payments like property taxes, and quickly make a judgment on whether we can afford a big purchase. He’s usually right, too!

Speaking of big purchases, I have to be pushed to spend money even on things that really enhance our lives. We spent a lot of money on remodeling the kitchen and bathrooms, and have gotten a lot of pleasure out of them – very worth the money, but without DH’s influence I would’ve held back.

The first time I read The Complete Idiot’s Guide to Getting Rich, I got a bit depressed for a few days because we weren’t saving my calculated Target Savings Goal each month (and I didn’t realize that our investments were returning as much as they are.) We had a big conversation about whether it was worth being super frugal now in order to retire very wealthy 20 or 30 years from now. We decided to go for more of a balance – spend some and enjoy life a bit today, while still saving enough for a comfortable (but possibly not wealthy) retirement.

A final point I almost forgot -- investing! I favor buy-and-hold (to a point that is detrimental as I've missed out on selling declining stocks) very long-term investing, loaded mutual funds (Dad's influence there), and using a full-service broker. DH trades individual stocks through a discount broker, looking to make a profit within a couple of years. When we first met he talked about the ups and downs of the stock market so much it drove me crazy, as I really had no interest in individual stocks (and my eyes still glaze over). He hasn't been trading stocks much since we married -- I'm afraid I've really discouraged him by not wanting to join him in it.

4 Responses to “Philosophical Differences”

  1. Ima saver Says:

    My husband is a car person too. He wants a new vette every few years. He works so hard, 7 days a week for the past 30 years, so I usually give in and let him get a car he really loves!

  2. monkeymama Says:

    I think balance is good. I think you and your dh are similar to my dh and me. I think mine is a little more frugal - Wink - but sometimes I Feel he wants to spend all the money and I am freaking out. LOL. (Of course he will tell you I am the spendthrift - I think we just go crazy sometimes at what the other one values that we don't).

    But he is enjoying life well within reason and I just need to learn to do the same.

    I think that is a good goal. Enjoy it now because who knows if we'll be here in retirement, right? But save enough to retire comfortably - that is a worthy goal.

  3. Ralph Says:

    It sounds like you two are very close in financial philosophy, so you are pretty lucky. My wife and I agree on a few things like having a fairly modest house and keeping cars forever, but it's the daily spending that drives us apart. I favor cutting it to the bone to pay for the big things that we are behind on like college, retirement, and CC debt, while she wants to buy whatever she wants or needs. So we have to try to come together, and to that end I am enjoying very much the books "Smart Couples Finish Rich" (despite the presumptuous title that I hate) and Men, Women, and Money". So far they seem to be helping me get started on figuring out how to work together instead of against each other.

  4. Nancy Says:

    I applaud your investment in an SUV with side air bags; they saved my life and I would never buy a car that did not have them. I used to see cars as a way to save money, but now I invest in a safer car!

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