Example Couple: The Husband Spends, The Wife Wants to Save
28 August 2006CNN has a profile of a couple that fits this description. The husband is a spendthrift, blowing thousands of dollars on Christmas presents and his car. The wife wants to save money, but doesn’t seem to have the ability to take charge of the household finances. He seems blissfully unaware of the financial problems this choice is creating:
A series of recent events have exacerbated the differences in their financial styles. In January, Michael was offered a job in Phoenix, prompting the couple to move there from Chicago with their daughter Ava, 19 months. But Michael’s new position pays mostly on a commission basis, and Brittany’s hunt for part-time work has been stymied by the news that she’s expecting their second child in January.
Although Michael expects to be earning six figures again in a few years, at the moment their once comfortable $135,000-a-year dual income has dropped by more than half.
To make ends meet, they’ve burned through $11,000 of their $15,000 emergency savings and tapped $15,000 of a home-equity line of credit on their soon-to-be-sold Chicago condo.
It strikes me as a pretty bad idea to get in this position. The savings from moving to the lower cost of living area in Phoenix don’t seem to have materialized, especially if they’ve blown through $26,000 from the lower salary. The problem here seems to be a refusal to adjust their lifestyle in the face of a lower income. And that sounds like it’s going to get worse before it gets better – having a baby will only add to the expenses. Think about it this way – the $2500 the article says the husband spent on Christmas presents for the wife is nearly 4 percent of their current gross income! Imagine all the other random stuff he has to be spending money on. This is a good example of how one spouse can ruin the finances of the couple on their own, especially if there’s no resistance from the other side.
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