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Book Jacket

Trade Paperback
220 pages
Jul 2005
Life Journey

Cents & Sensibility: How Couples Can Agree About Money

by Bethany & Scott Palmer

Review  |   Author Bio  |  Read an Excerpt  |  Interview


Chapter One

Savers Versus Spenders

Scott cracked open the front door and peeked in. Wearing a wide smile, he glanced around the entryway and toward the living room beyond. Empty.

“Hello! I’m home!” he called. “Bethany? I’ve got a surprise!”

Bethany strolled in from the back room. “Did you say a surprise? What surprise? What is it?”

“You’re going to love it.”

How exciting, Bethany thought. What’s he got? A bouquet of flowers? Symphony tickets? Or maybe that expensive necklace I’ve been drooling over. Scott knew she had been eyeing it for months. Could he have bought it as an early anniversary gift?

“Okay, close your eyes,” he said.

Bethany pushed up the sleeves of her sweatshirt and covered her eyes with her hand. Scott darted outside for a moment. With a grunt, he lugged two large stereo speakers inside the door, one at a time. Actually, large is an understatement—they looked like they could have damaged eardrums at a Rolling Stones concert at Yankee Stadium.

Now wearing a wide grin of her own, Bethany said, “Can I open my eyes now?”

“Just a sec,” Scott said. He hauled in from the porch six boxes of stereo equipment—an equalizer, subwoofers, an amplifier, and all the rest. He positioned the speakers in front of his wife, then spread out his arms in a motion that said Ta-da! “Okay, go ahead.”

Bethany’s eyes popped open, and it all took a moment to register. What is this stuff? she thought. A half-second later, her eyes narrowed and her smile dissolved into a semi-scowl, but she quickly tried to mask her disappointment. “Oh. Speakers. Wow. They’re so…big. And look at all those boxes.”

“Yeah, isn’t it great?” Scott gushed. “This system is going to be so cool. It’ll blow you away. My Coltrane CDs are going to sound incredible. And wait till we watch movies with surround sound.”

He started to drag one of the speakers toward the living-room entertainment center. His excitement was palpable; he was like a kid ready to try out a new toy on Christmas morning.

“Uh, wait a minute,” Bethany said. “I don’t mean to rain on the parade, but how much did this stuff cost? I mean, look at those speakers— they’re huge.”

Scott straightened up and rubbed his hands on his jeans. “Let me tell you, honey, I got a sweet deal. Sure, I had to buy more equipment than I originally thought, but it was a good deal. Really.”

“Where’d you get all this?” Bethany asked, momentarily leaving behind the question of cost.

“Well, it was an amazing thing,” he replied. “I went over to Sound Station, the electronics store we were shopping at last week, remember? So anyway, once I was in the store I found a salesman and he got me the deal of a lifetime—cheap. Turns out he didn’t just have speakers, but an entire surround-sound system that would take care of all our needs. And it was much cheaper than similar setups I saw for sale at other stores.”

“You bought an entire surround-sound stereo system?” Bethany asked. “I can’t wait to read the return policy and warranty agreement. Okay, so how much?”

Scott swallowed hard. He’d hoped that question had been forgotten. He did one of those hokey sitcom maneuvers where a guilty character rubs his hand across his mouth at the same moment he speaks. He mumbled his reply and gave a melodramatic shrug. He knew he was caught.

Bethany just waited, her hands now planted on her hips.

“Oh, all right,” Scott mumbled. “It was, uh, five times the amount we talked about.”

“Five times?” Bethany blurted. “Five times the amount?” She could envision him at the check-out counter, salesman and boxes in tow, holding the Visa card. She plopped onto the couch and sighed.

Scott knew where this discussion would go next and decided to beat Bethany to the punch. “Yes, yes, I know. I overshot the budget. I did pay more than we agreed to spend. I admit it. But what a deal. I mean, what a deal! And this system will last us, well, forever. In the long run, it’s a much better deal than those systems we saw at the other stores.”

Bethany tried hard not to roll her eyes, but she couldn’t stifle the groan that slipped out of her mouth. “Scott, you overshot the budget by five times the amount! We agreed on a specific amount. I think we better talk about this.”

What followed was a lengthy—and intense—discussion about the effort they had been making to pay off credit-card debt. They had squeezed their budget, refusing to go out to eat, skipping morning lattes, and making their date nights much cheaper. Their conversation was peppered with words such as accountability, responsibility, and reliability.

Bethany concluded by saying, “The bottom line is, we had an agreement. We talked it all through ahead of time, and we determined together what we could afford. You spent five times as much as you said you would.”

Although he felt chastened and rebuked, Scott could only admit that, yes, he’d blown it. He hadn’t realized that surround-sound speakers required other equipment to enable them to work. And once he started buying, he went full speed ahead. Despite the unexpected expense and the ensuing conflict over it, the stereo spending spree did have an upside: Scott and Bethany decided then and there that they would never make a purchase over $100 without checking with each other first. Since then, there has never been a surprise purchase of that size—or anything close to it.

Going to Extremes

As you’ve probably guessed by now, we are the Scott and Bethany featured in this vignette. And that is a true incident that happened several years ago. We didn’t need the extra outlay of cash for those super-sized speakers and the other paraphernalia. On the road to financial freedom, we had taken an abrupt U-turn. But, of course, the real issues were a lack of restraint, uncontrolled spending, and most of all, a broken agreement.

Does all of this sound familiar to you? Can you see yourself in our squabble? As we mentioned in the introduction, we sent out questionnaires to hundreds of people as part of our research, and that feedback revealed that the saver-versus-spender conflict is probably the most common of all. But even if this is not your primary trouble spot, it’s highly likely that you’ve encountered this conundrum somewhere along the line.

If you are a saver, you’ve probably found yourself saying to your spouse, “Why did you buy that?” Or, “You paid how much?” Or perhaps, “We’re already in debt! Quit spending!” Of course, if you are someone who likes to spend, you’ve probably said something like this: “I work hard to earn a paycheck, and I’m going to enjoy it.” Or, “I prefer to savor life now and live in the present. What’s the point of having money if you don’t use it to pamper yourself a little?”

Savers and spenders simply come at the money issue from different philosophical approaches. One looks at the wallet as half empty; the other sees it as half full. One looks at the amount in the savings account and says, “That’s pretty bad. We’d better tighten the belt and redouble our effort to save.” The other looks at that same amount and says, “Hey, that’s pretty good. Let’s go out to dinner to celebrate. And afterward, we can swing by the mall.” It’s not hard to see how these differing approaches cause conflicts.

We agree with the psychologist Betsy Stone, who said,

    I believe that the ways we discuss money and its attendant issues are of paramount importance in any marriage. Whether we have too little money or just enough (we so rarely feel that we have too much!), all of us have strong emotional responses to money, saving, and expenditures.… We have strong opinions on how money is used, whether it is saved, invested, or spent indulgently. In fact, one person’s extravagance is another person’s essential expenditure. When these differences exist, they can have severe consequences within a marriage.2

So true, and it happens in households across America. One spouse scrimps and scrapes to put a few dollars away each week, while the other person spends like there’s no tomorrow. Imagine how it unfolds: Larry pulls his sweater tighter around him as he furtively turns down the thermostat—even though it’s twenty degrees outside and pretty nippy inside. He knows the utility bill this month is going to be a doozy, and here’s a chance to lessen the damage. About this time, his wife, Janet, arrives home carrying several overstuffed Neiman Marcus bags. They exchange glances, and even though they don’t say a word, loaded messages pass between them. They’ve discussed all this before. What more needs to be said? Larry feels his blood pressure rising and his fists clenching. Here he is trying to be fiscally responsible, trying to stick to the budget when—

“Why is it so cold in here?” Janet says. “C’mon, Larry, it’s like an icebox.”

As she moves to turn up the thermostat, he sneaks a peak inside her bags and emits a disgusted sigh. They retreat to different parts of the house in chilly silence (literally and figuratively). Maybe their unspoken strain will subside by dinnertime. But maybe not.

Or perhaps it happens like this. Carol is a devoted coupon cutter. In fact, her friends have dubbed her the Coupon Queen, and they pass along their own clip-and-save circulars that come stuffed into the Sunday paper. Carol has them all organized in a file box, which she proudly carries to the grocery store each Wednesday afternoon (when the weekly specials are announced).

When Carol arrives home from the store with the trunk of her well-used ’86 Toyota Corolla stuffed with grocery bags, she will present her receipt to her husband, Phil. Wearing a triumphant expression, she will announce, “How ’bout that? I saved $29.52. Certainly not my best outing, but not bad—especially if you multiply that by four weeks in every month and twelve months in every year and …”

Phil hears this multiplication routine almost every week, but he knows better than to interrupt. Phil also knows now would not be the best time to reveal that he just upgraded the cable TV package from basic to premium. Oh, and he also ordered the NFL Season Ticket deal, so he can now get all the games every weekend. As Phil stares at Carol’s receipt, he executes a quick calculation. He just upped their monthly expenses by the same amount Carol saves with two or three weeks’ worth of coupons. Then he gulps. He knows she pays the monthly bills, and she will not be pleased when she opens the invoice from the cable company. Normally an easygoing person, Carol gets downright fierce when someone—namely Phil—undermines her efforts to save.

These two scenarios are relatively minor examples of saver-spender conflicts. Sometimes, however, the stakes are much higher and the expenses much greater. Not long ago, a woman told us about the time her husband pulled into their driveway in a brand-new Lexus SUV with all the bells and whistles. He hadn’t even mentioned the possibility of replacing their old vehicle—probably because it didn’t need replacing. How did he pay for the Lexus? He raided their retirement account.

“I fumed for two weeks,” the woman said. “I was astonished that he could be so irresponsible and inconsiderate about my needs and wishes.”

Then there’s the email we received from a man who wrote,

After five years of being in debt, my wife and I finally paid off all our credit cards. It took a lot of work and a lot of sacrifices. But we celebrated when we saw a zero balance on our last Visa statement. Over the next couple of months, however, my wife went wild with spending. She accumulated $10,000 in new credit-card debt— without my knowing it. When I did find out, I was shocked and horrified. In fact, I felt so betrayed that it was like she’d had an affair. Our trust was severely wounded. We’re still paying off those debts, and we’re still repairing the damage done to our relationship. Now we have another expense: weekly marriage counseling fees.

Sometimes spender-saver discrepancies cause headaches and aggravation. Other times, they cause heartache and anguish.

Dealing with Differences

Psychologists tell us that a natural attraction usually occurs between people with opposite personality types—hence the saying, “opposites attract.” This may not be true in many relationships, but it certainly seems to be the case when it comes to savers and spenders. When Mr. Tightwad marries Ms. Spendthrift, the two are headed for a battle over the bank account.

If this is the situation in your household, you each need to understand yourself as well as your partner, respect each other, and accept responsibility. Maybe you enjoy spending money. That’s okay so long as you realize that your behavior affects your partner. You need to be willing to respect your partner’s need to save some and negotiate compromises. Maybe you feel more secure saving. That’s okay, too. But you need to be willing to allow your partner to be him- or herself and enjoy spending some money. If you always look down on your partner because he or she is not like you, you’ll poison your relationship.

Even if you are both frugal compared to most people, when you’re just comparing the two of you, one of you will likely feel better about spending, the other about saving. One tends to think more about today, the other more about tomorrow. How much trouble these differences create usually is determined by how much space separates a couple on the spender-saver continuum. Suppose there’s a scale from zero to a hundred, with zero being the person who won’t spend a dime on anything and a hundred representing the compulsive spender with a chronic problem. If a couple consists of one person who is a forty and another who is a fifty, they will likely run into the occasional skirmish but nothing catastrophic. If there’s a couple in which one spouse is a five and other a ninety-five, the clashes will be frequent and fierce.

Where might you and your partner fall on such a scale? If a significant distance spans between your saver-spender rating and your partner’s, you’ll likely have to work harder to negotiate, compromise, and cooperate. The greater distance, the more resistance. Take some time to determine your spender-saver ratio. But beware: most of us are notoriously unrealistic and self-deceptive when it comes to our spending habits. Specifically, most of us spend more and save less than we’d like to admit.

If you want to overcome saverspender conflicts in your relationship, begin by taking a realistic look at your propensity to spend or save. It will also help to explore why you either spend or save. (We’ll discuss how our money personalities are formed in part 2.)

Variations on a Theme

Although the most prevalent predicament involves one person who is a dedicated saver and a partner who is equally dedicated to spending, two subcategories are worth mentioning. As we said earlier, sometimes two spouses have similar orientations toward money use, but they have different degrees or methods of spending or saving. One partner may be inclined to save, while the other feels compelled to save a whole lot more. Or there may be two spenders, but one limits spending to $50 a week, while the other can easily go through several hundred dollars. Let’s take a look.

Spender versus Spender Couple

Doug and Anna have been married for three years, yet neither of them has ever been able to stick to a budget. They hang out at the outlet mall as often as they can. Doug spends only the cash left over from his paycheck (after paying bills), while Anna spends what she has and then starts whipping out credit cards. She doesn’t think twice about plopping the plastic on a store counter to pay for household goods and clothes. Now Doug and Anna have more than $15,000 in credit-card debt and no savings. Guilt and feelings of desperation are beginning to overwhelm them. And their fights are growing more frequent. Doug tries to talk to his wife about her excessive spending, but Anna retorts, “Who are you to talk? It’s not just me. You spend plenty of money, too.”

Saver versus Saver Couple

Tyrone and Alesha are both cautious with their money, and they never pay credit-card late fees or finance charges. They considered adding on to their tiny house, but neither could stomach the idea of a second mortgage to pay for it. So they agreed to wait until they can pay up front, which could take many years.

While Alesha likes to find good deals on eBay and at thrift stores, she also enjoys going out for a nice dinner every once in a while. She figures they deserve an occasional treat. Not so for Tyrone. He wants to save every penny they make. He believes dining out is a big waste of money. What’s more, he only rarely goes to a movie at the local cineplex. Tickets cost too much, and there’s always the temptation to get popcorn and sodas (Alesha likes popcorn with her movies). Tyrone would much rather rent a video and watch it at home—or better yet, check one out from the library for free. Both Tyrone and Alesha are savers, but a wedge is starting to build between them because of their differences. He says, “I’m being frugal and wise.” She says, “No, you’re being cheap and stingy.”

Who’s Right; Who’s Wrong?

The entire point of this book is to help bring clarity and understanding to your relationship in the area of finances—not to label either partner as right or wrong, good or bad. In the previous examples, it’s easy to paint the spender as the bad guy. As we’ve learned from our financial counseling business, however, these issues are rarely as cut-and-dry, black-and-white as they appear at first glance.

We believe the keys to resolving saver-spender issues are balance and compromise. The person who buys things he doesn’t need or spends money she doesn’t have is clearly out of balance. That individual obviously should concentrate on saving more and spending less. Also unbalanced is the saver who is so miserly that he deprives his spouse and children of joy. Hoarding money so insatiably that it isn’t used to enrich the lives of others is not noble.

Compromise becomes an ally when partners with different spending habits agree on a reasonable and sensible plan they can both abide by. They can negotiate a plan that helps them both—one that reins in the spender and loosens up the saver. Working as a team, they can both agree to make sacrifices for the sake of the relationship.