Dear Dave: I have a question about budgeting. I give myself and my husband $150 a month each for blow money to be used on whatever we want. I’m upset because he spends all his eating out, then he buys other things he wants that he has no money for. Am I being too stingy?
Cheryl
Dear Cheryl: I think you guys are handling your money poorly. You’re acting like his mother instead of his wife, and he’s acting like a little boy instead of a man. You don’t want to give your husband an allowance and then not be happy when he spends money “he didn’t have” because he went over what you dictated to him. That’s a bad budget process.
The budget process, if you’re the nerd in the family, should start with you writing it all out. Then he sits down with you, has an equal say in the decisions and you two okay it together. He needs to understand that this is you asking him to man-up and be part of the decision-making process, so that you can both be in agreement as to what’s best for the family. In one sense, you may not like it at first, because right now you’ve got control of things. But in another sense, I’ll bet you’re pretty tired of carrying the weight of all the financial decision making and being the only adult in the household.
He doesn’t even have to work on all that much. I want you to lay it out, but I expect him to sit down and go over it all with you. You’re not asking him to be an accountant with a pocket protector, but you have every right to expect him to be in on the decisions that are made about your family and your finances!
Dave
Tuesday, May 26, 2015
Monday, May 11, 2015
Should you borrow to buy a car
Dear Dave,
My wife and I are on Baby Step 3 of your plan. We’re also saving up to buy a car with cash. We’re about $3,000 away from our goal, but now my wife wants to go ahead and finance the rest. She has started wondering what the difference is in borrowing to buy a car and borrowing to buy a house.
— Lex
Dear Lex,
This is a good question. It sounds like you guys have made good progress, but now one of you is running out of steam. That’s OK. Getting out of debt and staying out of debt can be a tough road.
For one thing, cars go down in value. The second thing is I don’t like debt of any kind. I don’t really like borrowing for a house even, but I tolerate it as long as you use a 15-year, fixed-rate mortgage with payments that are no more than a fourth of your take-home pay. I mean, it’s a much larger purchase. You can get a great car for $15,000 to $20,000 dollars. Depending on where you live, a good home can cost you 10 times that or more.
Still, the best way to build wealth and have a high-quality financial life is to not be in debt. You’re never going to win with money in the long term if you can’t learn to delay pleasure. That’s the bottom line. Personal finance is about controlling the person you see when you look in the mirror.
Every one of us has that little 4-year-old kid inside, a little kid whose name is Immaturity and who wants what he or she wants right now. What your wife is asking is a normal request, but it’s also a sign that we all have to address that little kid that’s inside us once in a while — and tell that kid no.
— Dave
My wife and I are on Baby Step 3 of your plan. We’re also saving up to buy a car with cash. We’re about $3,000 away from our goal, but now my wife wants to go ahead and finance the rest. She has started wondering what the difference is in borrowing to buy a car and borrowing to buy a house.
— Lex
Dear Lex,
This is a good question. It sounds like you guys have made good progress, but now one of you is running out of steam. That’s OK. Getting out of debt and staying out of debt can be a tough road.
For one thing, cars go down in value. The second thing is I don’t like debt of any kind. I don’t really like borrowing for a house even, but I tolerate it as long as you use a 15-year, fixed-rate mortgage with payments that are no more than a fourth of your take-home pay. I mean, it’s a much larger purchase. You can get a great car for $15,000 to $20,000 dollars. Depending on where you live, a good home can cost you 10 times that or more.
Still, the best way to build wealth and have a high-quality financial life is to not be in debt. You’re never going to win with money in the long term if you can’t learn to delay pleasure. That’s the bottom line. Personal finance is about controlling the person you see when you look in the mirror.
Every one of us has that little 4-year-old kid inside, a little kid whose name is Immaturity and who wants what he or she wants right now. What your wife is asking is a normal request, but it’s also a sign that we all have to address that little kid that’s inside us once in a while — and tell that kid no.
— Dave
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