Money disagreements are the best, am I right?
Ok so maybe they’re not the best, but we all have them, whether we choose to admit it or not.
I used to turn a blind eye to our disagreements and think that Jordan and I were totally in sync with our cash. But taking a step back and looking at our money disagreements has helped me see how our relationship has grown over the years. We started dating right before we graduated college so we’ve grown from broke college students to 20-somethings with cash, to broke grad students, to now soon to be parents (side note: omg) living in another country.
We’ve had a smorgasbord of money situations, and I’m sure there are many more to come, but with each disagreement has come a “learning opportunity” (pulling out my best corporate jargon here). We learned very early on that we could continue having the same arguments, or we could learn to make adjustments that we both feel comfortable with.
It’s worked in our favor so far. We used to have a lot of underlying tension around money. When we moved in together I would silently seethe over the amount of food he ate. All of a sudden grocery trips were so much more expensive and I would shoot him a look of disgust as he dove into his second bowl of cereal in the morning. I would crawl at the walls after 5 minutes of sitting down to work on our finances together. And he absolutely hated how I couldn’t clearly communicate our money situation or stay organized with any of our accounts.
I’m sharing our disagreements and how we resolved them, not because I think what we do is perfect, but because it might be helpful to hear that yes, it’s ok to disagree about money and there are productive ways to approach those disagreements head on.
I’m also sharing this because the most popular article on this site is one about how we share our money. While I think that article gives a great view of our day to day money management, I want to be real and share that even though we’ve set it up well, we still do disagree. It happens. You’re not a failure for disagreeing over money. And there is more that you can do about it other than bottle up your emotions as your S.O. reaches for his or her second bowl of cereal.
Our basic rules for money fights
To be honest, we’ve never really defined these but as I look back on how we’ve learned to handle every situation, we stick to these rules, which seem to work for us:
1. Respect what the other person values (even if you don’t understand it): there are some things we didn’t fight about that people normally argue over: our wedding, our house, our individual spending. For each of these things, we were really upfront about what we each person valued the most. For example, when we got married I knew that I needed to keep a separate spending account to feel like I still had independence. This wasn’t high on Jordan’s needs, but he respected that I valued financial independence in a relationship and agreed to separate spending accounts to help me keep that independent feeling.
2. Once a decision has been made, there’s no your opinion versus my opinion anymore. When we disagree, we lay everything out on the table. Seriously, we don’t hold back. But once we come to a compromise, that’s it. If something doesn’t turn out the way it was supposed to or we lose money on a decision, there’s no pointing fingers.
3. We take breaks: we don’t always have the information to support our point of view ready, so if we start to disagree about something and one of us needs more time to fully think about (and research) how we feel, we take that time. Money decisions don’t need to be made overnight.
Money Issue #1: Not being organized (or forthcoming) with money
In all honesty, we’ve gotten into this disagreement more times than I care to think about. This was the one we’ve probably most recently sorted out. It was also never a blow-up fight – just a lot of underlying tension.
I’ve written before about how I’m not very organized and Jordan is very organized. That can cause some tension. While we would occasionally laugh about how I would forget about what accounts I had (“oh I did open that store credit card, didn’t I?”), it’s not the easiest to make a financial decision when we don’t have complete information.
Most recently Jordan was trying to update our net worth calc and I casually mentioned a retirement account that I’ve had since I was 22, that I had failed to mention in our previous 5 years of marriage. As he’s in his spreadsheet I pop over his shoulder and say, “oh, I completely forgot I have a retirement account that you’ll want to add. I have no idea how much is in it or whether you’re the beneficiary…”
Not only did that frustrate him because I was messing with the spreadsheet, but he also probably felt like I was hiding money from him (I wasn’t, I swear).
I had to realize that what I was doing wasn’t just a little annoying, it was pretty disrespectful to him as he tried to get a full picture of what was going on financially. To fix this, I did two things. First, I took some time and figured out where all of my accounts were, typed up a list of all accounts and passwords, and put it in his expertly arranged file cabinet. I wanted to show him that I can be organized too!
Second, I convinced him to ditch the spreadsheet that he would update quarterly and I signed us up for Personal Capital. If you’ve read anything on this site, you probably have heard me mention how much I love the free tool that they have, and this is why. It’s eliminated this money issue. We can each log in at any time and get a full snapshot of all of our accounts. There’s no need to log into all of the different banks, brokerages, etc that we have. We linked all of those accounts here and it updates them automatically. It makes me look organized, even though I’m really still not.
I’ve made a guide to show you how we organize our money – it includes the spreadsheet that we used to use to keep track of all our 21 accounts, and also how we organize now with Personal Capital. You can get that guide here.
Money have you feeling like a mess?
A simple spreadsheet solution that’ll take you from “wtf?” to “ah. money is simple.”
Money Issue #2: Not being specific enough with how we would use (or not use) the money in our savings.
On the scale of 1-10, with 10 being an all-out meltdown, this disagreement was probably as close to a 10 as we’ve ever gotten. Ok fine. Maybe it was a 10. The situation was dire. I needed out of my job – and quickly. Every single day that I went into the office made me crumble just a little bit more inside. Things progressed to this dire state quickly and the London job market does not move quickly. I felt like I couldn’t wait to find another position.
While we had emergency savings which were there in case someone was laid off, what was the option of needing to just leave a bad job?
This question – what are all the ways we feel comfortable using the funds in our savings account – was the root of the issue. I needed to use the money as a crutch to fall back on but felt guilty about it. Jordan was hesitant to watch our hard earned savings get depleted because I didn’t like my job.
The result was an all-out fight because I was already teetering on shaky ground emotionally. His rational concern of, “is this the best way to use this money? How will we build it back up?” was met by a string of expletives coming from my mouth. Not my proudest moment, but I HUGE learning curve for us. What really defines an emergency?
We had to get really clear about what our emergency fund (and all of our other savings accounts) was for. Ultimately, it didn’t feel right to use an emergency fund for this situation. But as a compromise, we created an F-fund (depending on our mood it’s either the f-it fund or the freedom fund). This is for that freedom in life, to say leave a job that is horrible, pack up and move cities, make some big, drastic change that isn’t necessarily an emergency but would make life infinitely better. I love this bank account because of all the possibilities it holds. And I can’t wait to see what we decide to use it on when we say f-it.
Money Issue #3: Different risk tolerance
I’ve written before about how Jordan is riskier in life and with money. He enjoys jumping out of a plane and taking educated bets on things like single company stocks and cryptocurrency. I, on the other hand, am really risk averse with my money. I love a good index fund for both stocks and bonds and prefer to be seated comfortably on a plane, rather than jumping out of it. Needless to say, we don’t see eye to eye on how much risk to take with our money.
While we’ve had this disagreement come up quite a few times, it most recently bubbled up again at the end of 2017. We were planning for 2018 and looking down the road a few years thinking about what we might want to do next in life.
For goals that are a couple of years down the road, I wanted to leave our money in savings where it earns a comfortable little interest rate of 1.4%. Jordan pointed out that inflation is above 2%, so by keeping a lot of cash in there, we’re actually losing money.
We couldn’t see eye to eye on where to put this money and how to handle our different risk tolerances, specifically for our short-term investments. We were at a standoff for a couple of weeks, with neither of us wanting to bend to the risk tolerance level of the other side. Trying to find a middle ground almost felt like we were both losing and our conversations about this weren’t productive.
This has shown up over and over again in our relationship and will probably be a constant discussion. But I do think we’ve found really productive ways to handle this conversation in the future.
Solution 1: Jordan keeps his own gambling fund. We agreed on a set amount that he could put into risky investments. I’m talking the risky, risky investments. Putting all of the money into one speculative stock (which ended up doing pretty well) and then taking those winnings and investing in in cryptocurrency (which he’s still done well with). This is fun for him. He invests in companies or products that really interest him as an engineer, but there’s a limit on how much he can gamble with.
He’ll write an article about how he approaches this gambling, but I feel safe because after these investments increased, he pulled out the principal investment and threw it back into a stock market index fund. He’s gambling only with his winnings now. Because I’m risk-averse, I never consider that money in our full financial picture (I assume it’s going to be lost) and he has a great time seeing what happens. It’s a win-win.
Solution 2: While solution 1 takes care of the “fun” money that Jordan wants to gamble with, we still had the broader question about what to do with a bulk of our money we are saving for some moves we’re going to make 2-3 years down the road. Specifically, our F-it fund and our fund for a chic, Scandinavian tiny home. I broke down how to handle your short-term investments in this article, but we got to the root of our disagreement by asking ourselves 2 questions:
1. When do we need this money by?
2. What happens if we can’t have it then? (Because of a drop in investments, etc)
If we have a set date that we really need to have the money available and waiting for another few years for the market to turn around would mess with our lives, that money should stay really safe in a savings account. That’s precisely what we did with our F-it fund. If our tiny home fund isn’t ready when we want it (in 2 years), we’re completely fine waiting a few more years to get back on track. For this, we decided to put it into a Lifestrategy fund with Vanguard, that includes both stocks and bonds.
By asking these two questions, we came up with a solution that we both feel great about, rather than something we’ve begrudgingly compromised on.
What other things do you find yourself disagreeing with your S.O. on?
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