How do I talk to my wife?

[RayMetz100]

My wife's parents are on disability and unemployment. Around 4 years ago they called us worried their landlord was selling their duplex and their rent would be raised. We (stupidly?) wanted an investment and bought the duplex for $214k. We upped their rent to match the other side, but pay them cash for the difference to keep their actual rent low. We don’t want to report the lower rent on our taxes and cheat the IRS. It's a favor we're doing for her parents that we have no intention of changing.

One rental item is that same property, negative cash flow. The other rental is a property we bought(borrowed) with my parents and brother for $85k, $28k borrowed by us.

We don't plan on getting out of either rental property.

I pay for 7 cell phones a month. My family of 4, each of my wife's parents, and my mom. My mom pays me back $240 per 4 months. ($60 per month). I'm working on getting my mom on her own plan, but intend to keep paying the other 6 lines.

My wife likes her cable. I'm working on changing vendors to bring the price down but she's not too excited about it. I'm guessing it's 2-3 months away.

My Pocket money is $180/week, 13 weeks/qtr is same as $780/mo. Then I add another $60 for non-weekly expenses like haircut, oil change, gifts, and Clothes. So the $60 is short term personal savings. (balance is $55 right now)

$180 a week is mostly my lifestyle of restaurants. I can easily spend $100 on a weekend with one family dinner out or just my wife and I can be $60. I think that is where most of the fat in my budget is, but right now I'm just trying to adjust to $180 per week and not going beyond that. If I can do it for several weeks, I'll try $160, etc. I take it out as cash each Friday. It also covers small ebay expenses like Audio CDs, Books, Headphones.

In my new budget, I pay the minimum on our $20k of credit cards and she uses her $500 to pay extra. The $500 used to be her Lexus payment but last year I used my bonus to pay off her Lexus instead of paying off a credit card, so she's been using her Lexus money to pay extra on the credit card. She claims that this July her Lexus would have been paid off by her, so she wants to keep the $500 for herself and get a loan on a tummy tuck or something. I'm dead set against more loans, but can't legally stop her. If her Lexus died tomorrow, I think there is a good chance she'd go out and get another 7 year loan or lease again. Her words -> Why shouldn't she? It's "her" paycheck isn't it? She's not asking me to spend any of my paycheck on her loan so why should it matter to me? I disagree and think at least I'd be responsible if she died or divorced.

This year we owed $1800 in taxes. I adjusted the number of dependents I claim to raise my withholding this year, and she used her $500 Lexus money to pay the taxes instead of extra credit cards.

Keep us posted on your progress

My progress this week was writing out the budget, talking to her, and moving around my phone plan so I can move the non-contract phones to a different carrier or my Mom's to her own plan.

Thanks for your suggestions.

[cptacek]

Is this a serious post? The more I read about how you handle your finances the less I believe it.

[Scanner]

I haven't read through all of this and I am certainly no experts on relationships but I tend to agree with DisneySteve on his take about communication.

I would only add that it's appropriate/the norm the wife spends a little more than the husband so cut her a little slack.

Remember. . .we are guys and we can be pleased with 3 "S's" - Sandwiches, Sports and Sex.

Women's needs are more complicated.

[disneysteve]

One rental item is that same property, negative cash flow.

We don't plan on getting out of either rental property.

I pay for 7 cell phones a month. My family of 4, each of my wife's parents, and my mom. My mom pays me back

If she wants her parents to have cell phones that they can't afford, let her pay for them out of her money.

My wife likes her cable.

So let her pay for it.

$180 a week is mostly my lifestyle of restaurants. I can easily spend $100 on a weekend with one family dinner out or just my wife and I can be $60.
It also covers small ebay expenses like Audio CDs, Books, Headphones.

You need to learn the concept of Want vs. Need. Sure you can spend $100 for a family dinner. Sure you can blow money on CDs, books and headphones. But you CAN"T AFFORD THEM. You have 20K in credit card debt, no emergency fund, no savings, living paycheck to paycheck and not putting away nearly enough for retirement. Unless you have a very rich relative who is on his deathbed and has you named in his will, you need to get your head out of your you-know-where and get with the program. You are living paycheck to paycheck entirely due to your own bad habits and nothing you've said so far makes me think that you have any intention of changing them. You are going to TRY to cut your weekly blow money by $20? Oh Boy! Talk about pissing in the ocean.

she uses her $500 to pay extra. The $500 used to be her Lexus payment
she wants to keep the $500 for herself and get a loan on a tummy tuck or something.

Her words -> Why shouldn't she? It's "her" paycheck isn't it? She's not asking me to spend any of my paycheck on her loan so why should it matter to me?

She seems to have forgotten that you are paying virtually all of her living expenses like rent, utilities, food, etc. She isn't asking you to spend your money on her loan but you aren't asking her to contribute to running the household either.

OMG. With every one of your posts, this situation gets worse and worse. Even though you seem to be starting to pay attention, it really seems to be like you don't fully appreciate how bad your problem really is and your wife is just living in fantasy land without even the slightest hint of having a clue.

You guys have a bunch of debt, rental properties that are losing money every month and have surrounded yourself with luxuries. All the while, you both continue to spend money on things you simply can't afford. Your wife is even worse because she doesn't even care if you have the money or not. A loan for a tummy tuck? Get real.

If this story is real (I see cptacek is starting to doubt that), you guys need serious, serious help. See if you can get your wife to read this thread. I'd be very curious to hear her reaction.

[maat55]

Are either of you christians?

You are living an secular existence. I hope you two get this worked out before you have children.

[disneysteve]

I hope you two get this worked out before you have children.

See post #23. They have 3 children.

[zetta]

This morning I took the plunge and asked her to sit with me for 10 minutes. I wrote out that her paycheck is $2500 (not counting the other $500 a month she gets in weekend work). Out of the $2500 comes $600 groceries, $200 gas, $100 IRS, and $100 Athletic club. That leaves her $1500 of discretionary money. She has been using $500 of that for bills like extra credit card or IRS payments, so really it leaves her $1000/month pocket money. (+$500 that she makes from weekends).

I suggested we put her $2500 paycheck into a joint account, give her $1800 cash for the groceries, gas, and pocket money, and we jointly decide what to do with the rest. She didn't go for that at all and we went back and forth for a few minutes before I had to run out the door for work.

It's great that you're getting your head out of the sand, but the way you approached your wife was almost guaranteed to backfire!

Instead, I would suggest approaching her this way:
Honey, I know I've made a lot of mistakes with managing money over the last 17 years. I'm worried about our retirement and credit card debt, and I'm tired of living paycheck to paycheck. I'd like us to work together instead of me trying to impose some plan on you, and think maybe going to a workshop together would be a good way to approach it. Would you be willing to try either Suze Orman, Dave Ramsey, or David Bach (Smart Couples Finish Rich)?

Let her pick the advisor. Let the workshop or worksheets do the job of getting her to lay out her side of the money picture. Give her a chance to create a get-out-of-debt plan she can live with. Tell her where you are going to cut your spending, and and show her over the next 2-3 months that you are sticking to it.

[RayMetz100]

Thank you for all the advice.

Is this a serious post? The more I read about how you handle your finances the less I believe it.

This is my real finances and relationship.

With us making $130k, it's been easy to just drift along spending and borrowing for the last 17 years. When we compare our situation to our parents,sibelings, and friends, we're in the 90th percentile, rich. That's why it's so hard to justify cutting back on our spending. I ask myself "why can't a guy making $100k + bonus take his family out to dinner a few times a month?" I figure if my brohers, sister, and parents can do it, why shouldn't I? I make more than them and drive cheaper cars.

If she wants her parents to have cell phones that they can't afford, let her pay for them out of her money.

I like her parents more than she does. The cell phones and cheaper rent is mostly my idea. I'd feel embarassed to change it now. I still feel like I CAN afford it. Before I changed anything, I'd have to work on convincing myself I can't afford it.

So let her pay for [cable].

We had that arrangement for the last few years. It didn't convince her to drop it. We may do it again. I think I first need to split out my Internet into a separate bill. There's always a package though.

you CAN"T AFFORD THEM. You have 20K in credit card debt, no emergency fund, no savings, living paycheck to paycheck and not putting away nearly enough for retirement.

I believe I can afford them in the way millions of Americans do. I just can't do it and "win" financially at the same time. I'm working on turning this titanic around. Not because there is an iceberg about to sink me. Not out of fear. I want to turn things around because I want to be intentional about my finances and do things I want like travel worldwide someday.

Even though you seem to be starting to pay attention

I've been listening to Dave Ramsey several nights a week for the last few months. I used to seriously think weekly about replacing my $2,000 97 F150 with a brand new Prius. I was visiting showrooms. I used to think monthly about buying a 3rd rental property. Dave Ramsey helped me be thankful for my crappy old dented truck and my plan for when it dies now is to replace it with another beater for around $2000.

it really seems to be like you don't fully appreciate how bad your problem really is

this is true. I want things to get better, but I still don't consider things bad. When I look up the income and savings of all people on this planet, I'm in the 99%th percentile. I feel rich. I know things could be better and I've started working towards that, but I feel like they are pretty good. I work for one of the top software companies in the world. My wife has a stable 40 hour job. Both my kids, age 14 and 16, are working regularly. The third kid is one we fostered from 3mo to 11mo, then my brother fostered and adopted him. He's age 3. Not that Dave Ramsey would be proud, but I have "perfect credit".

With every one of your posts, this situation gets worse and worse.

From my point of view, things have been getting better in the last several months when I stopped visiting car showrooms. Things got better when I recently wrote out my monthly budget. Things got better when I posted here and received advice from you all. Things got better when I called my cell phone company to get a better handle on that money sink. Things got better when I last talked to my wife about it.

you guys need serious, serious help. See if you can get your wife to read this thread.

There is no way I'll let my wife read this thread. She'd be mad for months and wouldn't understand me letting strangers see our finances.
Explain "need". I know I need air, water, and food. I need relationships and love. I need money for shelter. But I have all those. How is money help a need? Millions of Americans and non-Americans die each year in much worse shape than me. Did they all "need" financial help? I want help because this has become an interest of mine. If I was interested in sailing, I'd want help with that. I don't see how I need help with either though.

Not to discount the value of all you helping me, especially DS, but from my point of view, I want your advice, I don't need it. I will eventually make it to death either way and in 1000 years no one will care either way what happened with my finances. I want this for me now because I'm interested now.

Are either of you Christians?

We are Christians, but the way we've been handling our finances hasn't been glorifying God. I believe a "perfect" Christian could sail around the world solo, "win" financially, pilot a spaceship, lead a church, and organize a library. None of us are perfect though. Even when we're doing what God wants us to do to the best of our ability, we won't appear to others that we're glorifying God in every possible aspect of life, especially at the same time. To a sailor, most of us don't appear to be glorifying God to the best of our ability. Same with an astronaut. Just because a Christian is competent in a "good" ability, doesn't mean that others aren't as Christian as they are. To me, Christianity means knowing that only Jesus is good enough for God. I'm thankful that Jesus offered to accept me anyway.

I think God might want around 90% of his believers to "win" with personal finances. I'd guess the actual number winning is closer to 10%. I'm not saying I want to be average. I want what God wants for me, not average. Personal Finance is a recent focus of mine and I'm making progress on it. I want more progress today than I made yesterday on it and I think God wants that for me too.

[disneysteve]

With us making $130k, it's been easy to just drift along spending and borrowing for the last 17 years. When we compare our situation to our parents,sibelings, and friends, we're in the 90th percentile, rich. That's why it's so hard to justify cutting back on our spending.

My wife and I have been married 17 years. We earn about $130,000. We have one child. So pretty similar to your situation. I drive a 1998 Toyota. My wife drives a 2000 Toyota. Both were bought used. We have no debt except for our mortgage on which we owe just over $87,000. But I save at least 21% of my gross income. My wife has 50% of her gross going into her 401k. We have about $400,000 in savings and investments.

I think one of the biggest mistakse you are making is comparing yourself to others. That can be very, very deceiving because you aren't seeing what is happening below the surface. How much credit card debt do they have? How much do they owe on their vehicles? How much (if any) do they have in savings? You really can't judge anything about a person's financial status by looking at how they live their lives. Is your goal to look like you have money or to actually have money?

I like her parents more than she does. The cell phones and cheaper rent is mostly my idea. I'd feel embarassed to change it now.

Fair enough.

I believe I can afford them in the way millions of Americans do. I just can't do it and "win" financially at the same time.

Bingo. That's exactly right. Yes, you can continue to spend at or above your means. My wife and I could afford to spend a whole lot more than we currently spend. As I said, we save on average about 25% of our gross income. That's about $33,000/year that we could be spending instead of saving. That would buy a lot of dinners out, vacations, clothes, jewelry, whatever. But that just isn't how we choose to live our lives.

I want to turn things around because I want to be intentional about my finances and do things I want like travel worldwide someday.

Great. To do that, though, you need to start living below your means and saving for the future. Since you currently save nothing and live paycheck to paycheck, that has to involve cutting spending. Otherwise, where will the money come from? You need to start making a clear distinction between "can afford" and "should afford." They are two very different things.

I've been listening to Dave Ramsey several nights a week for the last few months. I used to seriously think weekly about replacing my $2,000 97 F150 with a brand new Prius. I was visiting showrooms. I used to think monthly about buying a 3rd rental property. Dave Ramsey helped me be thankful for my crappy old dented truck and my plan for when it dies now is to replace it with another beater for around $2000.

Great! That's the mindset you need to keep. You just need to follow it through even more in all areas of your life, and you need to find a way to get your wife onboard with the program.

I still don't consider things bad. When I look up the income and savings of all people on this planet, I'm in the 99%th percentile. I feel rich.

This is where you are getting into trouble. The fact that you earn more than most is of no significance and focusing on that is keeping you from seeing the problem clearly.

Not that Dave Ramsey would be proud, but I have "perfect credit".

This is one place where I disagree with DR. I think having a high FICO is a good thing. I just don't think being in debt for things you didn't need or couldn't really afford is good.

From my point of view, things have been getting better in the last several months when I stopped visiting car showrooms. Things got better when I recently wrote out my monthly budget. Things got better when I posted here and received advice from you all. Things got better when I called my cell phone company to get a better handle on that money sink. Things got better when I last talked to my wife about it.

I totally agree. Every little step is an improvement. As I said earlier, this isn't a problem you are going to fix overnight. I believe the most important part of fixing it is your mindset. if you keep telling yourself, "I should be able to afford it" or "I earn more than 90% of the population" you are sabotaging your own efforts to clean this up. Stop comparing yourself to others. It doesn't matter how much others earn. It doesn't matter how others choose to spend their money. That isn't what will determine if you are able to retire some day. That isn't what will determine if you get that opportunity to travel the world. What will determine that is what you and your wife do with your money.

[RayMetz100]

Is your goal to look like you have money or to actually have money?

My goal is to be more intentional with my money. I've made a ton of money in my 37 years, but my net worth is still less than 1 year of my annual income. It's not just more net worth I want, It's more intention for spending my money throughout the year. For now I'd be thrilled if I could say "for the last several months, I stuck to my spending plan". Even if my spending plan was 100% of my income, if I stick to it, I consider that progress. I haven't stuck to a plan any of the 37 years and I'm hoping if I can at least do that (baby step 0?), then I can start working additional goals.

you need to start living below your means and saving for the future. Since you currently save nothing and live paycheck to paycheck, that has to involve cutting spending. Otherwise, where will the money come from?

I want to start living below my means, not need. My plan to cut spending is to keep my monthly plan up to date, and to stay within it. Even if the plan gives me $180 a week of pocket money, I think it's progress. My wife bought me a ticket to Vegas in 2 weeks. Before my plan, I'd probably borrow something for the trip. I'd rationalize it that I haven't been to Vegas in 5 years, so I deserve to borrow $500 for the trip. Besides, I have some stock available to sell in August and might get a bonus in September. That's my old line of thinking.

With my new plan I'm now thinking "my budget already has no room and no savings. I can't afford any more money for Vegas, no excuses. If I just go with my $180, then at least I'm on plan. If I learn to stick to the plan for a year, it's likely next year's plan will include some extra vacation money and I can buy my own ticket anywhere I want."

You need to start making a clear distinction between "can afford" and "should afford." They are two very different things.

I'll take a try at this... Can Afford means what 90% of Americans do. I don't want to be in that category anymore. That got me this far and I've decided I want to go further. "Should Afford" means it fits within a plan I did months and years earlier. A good plan includes emergencies and "one time" expenses. If I'm outside or having to adjust my plan, then it's not something I "Should Afford". It's a clear indication I Shouldn't do it, even though I can. I want to practice staying within healthy boundaries.

need to find a way to get your wife onboard with the program.

My plan for her is similar to my plan for me. I want to make a plan, even if it's $1500 pocket money and $400 gas for her. I want her to see it in black and white, and stick to it. Then eventually she will find sense in lowering it. Not that anyone in their right mind would lower it for nothing. But if she saw that if she lowered it by $400 and the Home maintenance budget went up $400 and she'd have paint by the end of summer, then I think she'd go for it. Right now if she lowers by $400 than it could go to my new Prius loan or something, so she has no incentive. My short term goal is to just put her on in intentional budget, I'll work on the rest later.

The fact that you earn more than most is of no significance and focusing on that is keeping you from seeing the problem clearly.

The opportunity. I still don't see it as a problem. My personal finance opportunity is to spend my money on things I've, correction we've, wanted rather than things we have to or splurge on. As you said, there is no extra money. Being on plan doesn't create more income. It just re-allocates expenses from haphazard things to planned things. That's what I want to do.

I believe the most important part of fixing it is your mindset.

can afford(no plan) vs. should afford(on plan)
besides that, what other mindset things should I work on?

[cptacek]

I want to start living below my means, not need.

You've never said what you do (I don't think). What if you get run over by a bus tomorrow? You can't work, have expensive medical bills. You have credit card payments and a wife that won't engage with you to pull together. What then? Unless you have some type of guaranteed trust-fund type income, you are hosed.

That is why you need to start living below your means. To prepare for the future, no matter what that future holds. To do otherwise, with the kind of money you make, is irresponsible and reprehensible with regards to the responsibility you have to your family.

[RayMetz100]

I develop software. You are right that many accidents or illnesses could quickly take our lifestyle to $200k in debt and Social Security disability income. I do have Bi-Polar and have already been hospitalized three times in the last 10 years. Luckily all were less than 25 days and I'm still working. I believe I'm uninsurable as an individual already.

For some reason I still don't fear that though. It may be irresponsible, but I think the odds are low and if it did happen, me and my family would still survive better than most people on the planet. I just searched "average world income" and it came back $5,500 - $7,000. Just my wife's income or disability is more than that. A clerk at Burger King makes 3 times that. I don't want average, but I don't fear it either.

I think I can improve my personal finances without fear. Do you think fear is necessary?

[cptacek]

You don't live anywhere in the world. You live in the U.S. The standard of living is higher here than the rest of the world. The average world income doesn't mean a thing in this context.

You are trying to cut $20 off of your monthly expenses and want to congratulate yourself for doing that. How do you think you can cut > $100,000/year off and be ok?

[RayMetz100]

If someone making $5k/yr asked my help with personal finance, I could offer suggestions. That's how I would handle my own income dropping to that. Of course I wouldn't have a $400/mo cell phone bill to worry about or a house or 99% of what's on my budget now. It would involve standing in line at the food bank at least once a week and likely living with family. In many ways, managing a $5k lifestyle would be more relaxing than my $130k now. I still don't fear it.

I'm responsible to do the best with what I have. I'm not doing that now and if I made double my salary, I may even be worse off. In fact, I remember when I made $30k and I had less credit card debt. So going back doesn't scare me, even if it meant not paying $200k in debt. There would still be 24 hours in the day and I would still have a chance to do the best with what I have. That wouldn't change so what's the worry?

It's like being in Vegas with $180 vs. $1,800. You just do the best you can with what you have in both cases. Right now I need to worry more about how I'm managing our $130k/yr. and not worry about next year's income, whether it's $200k or $20k.

[Seeker]

Right now I need to worry more about how I'm managing our $130k/yr. and not worry about next year's income, whether it's $200k or $20k.

Ray,

Your view:
1) You are 37 years old.
2) You have a 16 YO and a 14 YO (and possibly a thrid child of 3 YO -- whom is fostered by your brother yet living with you?) and are in a marriage of 17 years.
3) You see yourself as "rich" on $130 k/year. You are trying to manage 130 k without the reality that you do not have 130k to manage (wife manages her own finances of approx 30k / year).

Wife's view:
1) She spent the first 5 years of married life producing two children and managing $35/week (her allowance from you).
2) Somewhere along the line, she obtained a job and separated her finances from yours.

Problems:
1) There's a "trust" issue on both your parts. Understandably. After 17 years of marriage, you may want a change, but you're also bi-polar. If wife is a realist, she will not be able to change under those circumstances.
2) If you "understand" that you are living paycheck-to-paycheck, and you do not fear what that means for you, your wife and your children, then you are not "ready" to manage your household's finances. Planning for the future is the entire reason for creating a budget and sticking with it.
3) If wife is not "saving," then she is not "ready" to manage the household's finances either.

If the two of you really wish to "fix" this, then it is imperative that you both sit down together for a good length of time (NOT 10 minutes before you have to head out the door for work) and talk it out. EVERYTHING needs to be expressed TOGETHER.

The two of you needs to come up with an accurate $ amount for "income" together. The two of you needs to come up with an accurate $ amount for "expenses" together. Same with "debts" -- together. Same with "goals" -- together. Future goals as well. Do either of you plan on retiring? By when? The two of you may need to revamp the portion of $'s that are spent by each of you on each item of expense. Each of you needs to KNOW what the other is doing with $'s and when and why.

You still write with "My plan for her", "I want", "She needs" etc. This is not the communication level of two people working as a team toward common goals.

You and she communicate on different levels and neither of you are understading or helping the other. She and you have different goals, and different levels of trust. Until you can communicate honestly and completely about both wants and needs; then neither of you face reality.

What I bolded above is what tells me that in spite of all written here, you do not understand your wife. She has "settled" for controlling her own income. She has met with your expectations for her income share. And she has issues communicating effectively with you as well. Frankly, if I were her, I would have taken control of everything "financial" in my household (if it were my household).

You versus me.
He versus she.
Yours versus mine.
OURS. Households and families are "ours" -- stop thinking as an individual and 99.9999% of your problems will resolve themselves.