When There Are Different Points of Views About Money in a Relationship

From our pals at Credit.com:

Scenario: You have an extra $5,000 in your bank account. You’re up-to-date on all your bills, and you’re on track for savings goals, so you get to choose where to put that $5,000. You’d like to pay off the $5,000 remaining balance on a loan and get it over with. Your spouse wants to use $2,000 of it to get something for the house.

Who’s right?

That’s the wrong question to ask, according to several financial planners.

 

It’s Not About Right and Wrong

The situation described above isn’t made up: A Reddit user posted about this dilemma, saying he wanted to save $250 a month by paying off student loans ahead of schedule, and his wife wanted to buy a Pottery Barn wine hutch she had been wanting to get for about a year. After a bit of discussion, she called his solution “boring, but practical,” but wasn’t thrilled about the idea, he says. The resounding theme in the Reddit thread is that he should pay off the loan and that the wine hutch is an absurd thing to buy.

With the limited information provided by the Redditor, a few financial planners thought through the situation, saying it’s not that simple.

“There’s no right answer, which can be really hard — we want to be right,” said Alan Moore, founder of Serenity Financial Consulting in Milwaukee. “They’re both fine ways to do it. It just depends on the context.”

There are too many unknowns about this particular situation to analyze all the potential outcomes, and that really doesn’t matter. People in these situations shouldn’t focus on changing the other’s mind; rather, they should make sure they’re communicating well about financial goals.

“We all approach money in such a different way,” said Karen McIntyre of Wescott Financial Advisory group in Philadelphia. “A lot of times it’s about ‘What are the implications of your decision?’ and let’s go down that path.” She said showing people the long-term impact of their choices can help a couple arrive at the best choice for their overall financial picture.

 

Compromise Goes a Long Way

Sometimes it’s not about choice A or choice B at all. Anyone who has ever had an argument with a significant other can attest to the fact that very little in relationships is black or white.

“Most couples have the same goals: They want some security, they want to know their input is respected and they want some freedom and trust,” said Jon Ullman of Montis Financial in Waltham, Mass. “In the name of marital harmony, I think I’d just tell them to split the difference.”

That’s like putting $2,000 toward the wife’s goal and $3,000 toward the loan — or maybe it’s best to choose a different route completely, like adding to savings. Even though each party comes to the conversation with a preference, no one likes to enter into a discussion in which he or she feels the decision has already been made.

 

Plan Ahead

Several Redditors responded to the original poster saying it’s a red flag that they hadn’t planned what to do with the money ahead of time.

It’s not a bad thing to buy seemingly frivolous things, as long as the other financial goals have been addressed. If you’re behind on retirement savings, have credit card debt or don’t have an emergency fund, a sudden windfall is a great way to jumpstart those goals.

If you’re on track with everything, sure, go buy a wine hutch.

“If you’re getting bored, it can be hard to stay on track,” Moore said, referencing the wife’s “boring, but practical” comment. “It’s amazing how freeing it can be when you’re not debating ‘Do we pay down the debt?’”

Of course, you only get that luxury if you’re already planning well. There’s some motivation to get on top of your financial goals.

 

Understand Different Points of View

In situations where one person is spending money that could be going toward a couple’s debt or retirement fund, it’s definitely something to address, but you’re probably not going to get anywhere by trying to hammer what’s financially “right” into the person who’s doing it “wrong.”

“You just have to finally get really practical and say, ‘Yeah it may be boring today but it’s going to be very boring when you can’t buy food or gas,’” said Linda Barlow, a financial planner in Santa Ana, Calif. “You have to bring it down to that and hope that something sinks in.”

Financial habits form way before adulthood. All the advisers mentioned how differently a childhood can impact someone’s financial perspective. Even with two people who had parents with little money, you can get very different outcomes, like “I never want to struggle for money the way my parents did, so I’m going to save as much as possible,” or “We never had nice things when I was a kid, so I want to enjoy those things now.”

They’re both valid conclusions.

“I have found that when you really understand where someone’s really bad idea is coming from, it makes perfect sense,” Moore said.

 

Christine DiGangi covers personal finance for Credit.com. Previously, she managed communications for the Society of Professional Journalists, served as a copy editor of The New York Times News Service and worked as a reporter for the Oregonian and the News & Record.

Photo: Anita Ritenour

Related Links:

What Happens To Your Credit When You Get Married?

Credit Card Options for Couples

How To Improve Your Credit Score

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15 Comments / Post A Comment

DarlingMagpie (#1,695)

It’s a wine hutch.

gyip (#4,192)

I don’t know why I was so confused by this scenario … then I realized my BF and I don’t have shared incomes.

On one hand, if it’s your loan, maybe you should pay it off yourself. On the other, if you’ve pooled your money as a couple, it’s in everyone’s best interests to make sure everyone has their debts paid off/managed and can be the best contributors they can be.

I can’t get over the idea of the wine hutch. I think for this advice to be more useful to more people, maybe a less silly idea needs to be presented. Or maybe the silliness is the point (you are led to think the other person’s desires are frivolous)?

But yeah, “wine hutch.”

Allison (#4,509)

Honestly my parents’ house could kind of use a wine hutch, instead of the cases of wine in the corner of the spare room. Also…is that extra money in the bank account there in part because she’s been saving thinking of the wine hutch?

I think I fall in the “talk about your goals and compromise” camp.

themegnapkin (#444)

@Allison If you have so much wine lying around that you need to buy something to put it in, wouldn’t it just be cheaper to drink the wine instead?
I’m only halfway serious. If you like having wine around and you can afford it, then go for it, buy something to store it in. (Wine doesn’t last that long at my place.) I’m in this situation with books, though – I can either buy another bookshelf to store the 100+ random books I have stacked in piles on the floor, or I can sort through those books and give away the ones I’m not going to read again. The second option didn’t even occur to me until I had been searching for the perfect bookshelf for upwards of a year.

Allison (#4,509)

@themegnapkin My parents hit warehouse sales in Napa a couple times a year and buy cases upon cases for great prices, and it definitely does get consumed! To the point where my mom will be emailing my uncle asking for word on when the next one is scheduled.

But sometimes this leads to us having to bust out a flashlight to figure out which wine we’re pulling from the case since it’s in the darkest corner of the room.

It’s basically the wine equivalent of a meat freezer.

Marille (#5,933)

I’m not opposed to the idea of a wine hutch, but looking at Pottery Barn price tags makes me break out in hives. Two thousand dollars is a lot of money, and while I’m generally the last person to say you shouldn’t get yourself something nice (particularly when it isn’t an impulse purchase), maybe you could find a slightly less expensive option? That way, you still get your wine hutch, the debt gets paid down quickly, and everyone breathes a little easier (though that may be because of the wine. Wine helps.)

swirrlygrrl (#2,398)

@Marille I also get the hives, and I LOVE furniture. But mostly I buy used: got my boyfriend a lovely art deco dining room set for $250, with delivery, which is less than anything but the worst Ikea furniture. Also: I don’t have a wine hutch, but I do have two 48-bottle wine racks (I live with a sommelier while I am just a avid amateur wine drinker); got them for $8 each at the Goodwill. Good investment!

LDW (#4,492)

I’m in the process of trying to furnish and decorate my new place, so I’m not quite willing to call out the wife as silly (anyone else get a whiff of “women be shopping” there?). One of the more interesting things I’ve experienced is that figuring out what a room “needs” tends to raise these questions about practical versus frivolous choices. Does any one really “need” a buffet just because it takes care of that odd empty spot at the end of the dining room? No but then I still have an odd empty spot at the end of a dining room that bothers me for reasons I don’t quite care to admit to. Just having dining room feels decadent after nearly a decade of eating at my desk while watching Hulu.

I’m assuming this is the item she’s talking about:

http://www.potterybarn.com/products/modular-bar-system-with-wine-hutchopen-hutch-su13/?pkey=cbars-furniture&cm_src=bars-furniture||NoFacet-_-NoFacet-_–_-

And, yeah I’m not quite on board with this either mostly because I think there are cheaper and more aesthetically pleasing ways to go. But if you collect and drink wine, having something like a wine hutch really isn’t all that silly. I recently started making sure I had a nicely stocked wine rack so that I wouldn’t constantly be running to the overpriced wine shop near me whenever I had to show up at someone’s house for dinner.

@LDW I definitely wonder if the genders were swapped, and it was a guy wanting to get something for the garage or something else “manly” if there would be the same judgments. As you point out, the wine hutch may sound frivolous, but not knowing their situations better, it may be the solution to a long standing issue of having random wine bottles everywhere, all the time.

gyip (#4,192)

@TrotskyHoldsMyiPod Although I don’t doubt that gender probably matters for others, I’d think a “tool storage box” worth $1000 or $500 (I don’t know much about these but I do know they can get weirdly pricey) would be equally frivolous. If you spent a LOT of time working with your tools, maybe eventually this would be a practical yet also luxurious purchase. But like with wine, I’d think, “Can’t you just store them in boxes for now?” Is it really worth $2000 to get a hutch now instead of two years down the road, even if it’s a quality piece of furniture you’ll never need to replace?

All the same, I’d add to my original comment by saying it’s her money too (forgetting the $2000 requested is less than half of the $5000 extra). It’s not fair to the wife to make her wait to spend HER money … or at the very least, his money that they’ve agreed to share. They can’t be equals just most of the time until it benefits him. He’s certainly entitled to ask if she’d agree to forego her spending in order to save, essentially, both of them money, but she’s not obligated because it isn’t her loan!

Anyway, I’ll be less snarky about the term “wine hutch” and agree that they can compromise on this.

CubeRootOfPi (#1,098)

I don’t think it has to be an either/or situation. They can make extra payments to the student loan while saving up for a wine hutch and/or find a cheaper alternative.

Susan Tidebeck (#5,691)

I’m surprised Craigslist never came up. Create an email alert with the words “wine hutch.” Within a year you will find one at half price, probably from someone trying to pay off a student loan.

No one who has debt should buy expensive furniture. This is not something that requires discussion.

squishycat (#3,000)

@Sarah Rain@facebook That’s stupid. If the debt is manageable, and the furniture is quality, buy the furniture *and* pay off the debt (in the above example, there was enough money to both buy the furniture and pay off more of the debt than usual). Good quality furniture lasts, serves a purpose, and doesn’t need replacing.

@squishycat It’s the economic equivalent of buying the (overpriced) furniture on credit and paying interest on it. Unless you’re lacking anywhere to sleep or sit, I would always consider that a bad idea.

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