Living within your Means: Implementing Rules for Spending
Prior to the recession money had not been a problem for Stan and Melissa. Both worked full time and earned enough so they were somewhat lax about a budget. Without warning Melissa was unexpectedly laid off. With Melissa’s help Stan drew up a budget. They became much more thoughtful about their purchases. They both shared a concern: they were used to buying what they wanted with no need to check out their purchases with each other. They did not want to be policing each others purchases or having to justify every item they bought.
They agreed on setting up a rule that whenever either of them spent over a certain dollar amount each month, they needed to contact the other to discuss their purchases from that point on for the remainder of the month. That way each of them would have a fixed amount they could spend monthly on discretionary items, whether it was one big purchase or several smaller purchases. They did not have to check out each purchase until they went beyond their limit.
The stumbling block was that they could not agree on the amount at which they needed to discuss a purchase. Stan thought they should discuss their purchases once either of them had spent $300 in the month whether it was for several small items or one big item. Melissa thought $500 was more realistic. This figure will vary with your income as well as with your mindset as a spender or a saver.
They phoned for advice. I said to them that couples can easily get into a power struggle over differences like this between $300 versus $500 per month, or over whose way is better. I said there was no “one right way” to set this limit. My experience was that going with the lower amount, in this case the $300, meant that neither partner’s limit was being violated. The cost was they would start discussing their purchases sooner, which might be a good thing.
They agreed that talking sooner would probably be helpful since they were not used to checking in with one another as often as they would need to do to stay within their new budget. They were determined to continue to save from Stan’s earnings because they hoped to start a family soon.
Like many couples Stan and Melissa said they did not like to talk about their finances because it occasionally led to arguments and differences. They ended up angry with each other for a few days.
I encouraged them to use my twelve step Connecting Conversation to have a successful talk about money. It is available as a free ebook on my website: www.talk2myheart.com. I explained to Stan and Melissa that the purpose of the steps is to help them have a successful conversation so they will continue to discuss their finances. They agreed to call in two weeks to tell me how they were doing with the $300 limit and with their Connecting Conversation discussing finances.
For a helpful reference see CBS Moneywatch: Money Rules for Couples