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October 21, 1998

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Subject: Re: Spouses and Investing
Author: 2gifts

I can't tell from your note how you generally handle finances. Do you put everything together in one pot, or do you separate them out? From your description of him paying his Am-Ex bill, it sounded like your finances were separate, but then you talked about your budget and that he gets an allowance, so it sounded like they were all combined. Some clarification on that, I think, will help people to be able to give you some helpful hints. Also, there was a string about this late last summer in the Women and Investing Board that had quite a few suggestions. You might try checking over there as well.

I'll give you a rundown of how it works at my house, and you can see if any of it might apply to you. First off, my husband is absolutely awful at managing money and knows it. I, on the other hand, just love playing with finances, doing the taxes, handling the investments etc. Hubby's solution, then, to handling money has been to give me his paycheck since before we were married and getting an allowance. Sounds like you might be doing some of that.

  "First off, my husband is absolutely awful at managing money and knows it. I, on the other hand, just love playing with finances, doing the taxes, handling the investments etc."

Other things that we've done that have really worked for us include:

- I manage all the money that comes into the house. That means that I pay all the bills, do all the investing, set and meet our savings goals, plan our retirement etc. It also means that with just one of us managing everything, there is nothing to fall through the cracks. Bills always get paid on time because it's my job to make sure that gets done, so there's no interest to worry about. It's interesting how much he trusts me on this. I recently managed to mis-file a bill, so it didn't get paid on time. This is something that has pretty much never happened, but I thought it would just be an expensive lesson for me, so I just paid it and didn't say anything. He happened to get home before me one day, and opened all the mail where he had a nasty note from this credit card company about this ridiculous late fee. He called them up then and there, insisted that all bills in our house are always paid promptly and told them to check their records and our credit rating. He actually managed to get the late fee credited back because he told them if they were going to insist on it, we'd pay it and they could just close the account. We both laughed when I got home and told him that I had actually made the mistake, and I really did owe these people this money. I paid it, but you can see that he really does like that he doesn't have to worry about any of the bills.

- I manage the budget. I generally do this in my head as I know how much we generally spend, how much extra we have, and what might be coming due. That helps in planning major expenditures or if one of us wants something that wasn't planned. Hubby refers to it as getting Congress to appropriate the funds, but generally just asks if there's enough in the budget this month to cover whatever. He likes not having to worry about where the money will be coming from, and he trusts that I can generally find it. If, for some reason, I can't find the funds immediately, at least I can plan, and we just move the purchase out til I'm more comfortable.

- Hubby has input into everything, and we are always discussing finances. Before I tracked everything in Quicken, I actually had a written list of all accounts, who to contact, how to manage the money etc. that I would make him review with me every 6 months. With Quicken, it's a lot faster, and getting reports is really easy, so I make him review our finances way more often than that. He likes seeing the numbers grow, and it makes him comfortable that I am managing the money adequately. It's interesting that money is one subject we have never fought about as our styles really complement one another.

  "We set our goals together. That includes large expenditures like the new house, kids' college, and when we plan to retire. It's my job to get us there. "

- We set our goals together. That includes large expenditures like the new house, kids' college, and when we plan to retire. It's my job to get us there. I set aside a certain amount each pay period, and apply it toward the appropriate goal. For instance, the kids get $100 a week each towards their college expenses. What I do with that money is generally up to me, but I usually run the plan by him to have a sounding board and to make sure he knows what we're doing. I just took the kids out of a mutual fund, and am moving them into the Foolish 4 as well as a couple of DRP's. He knows that's the general plan, though he doesn't necessarily know what DRP's I may choose. That part is up to me. For instance, I just bought some shares in Coke about 2 weeks ago [it was on sale - it's now back up about 12 points from where I bought it]. I told him I was going to do it, and let him know when it was done. I also just had an idea about getting the kids more interested in managing money, so told him I was thinking about putting one share each in their names [their college money is still in our names], and DRP'ing money in on birthdays, Christmas and whenever so that it would grow, and it would be theirs to manage at some point. He thought that was a good idea, so I'll do it once my DRP gets set up.

- I have a much higher risk tolerance than my husband, and we both know it, although I'm probably still middle-of-the-road. If it were up to him, we'd have everything in a savings account somewhere. But by letting me manage the money and watching the results, we have both become more comfortable with investing, and both realize it's a long-term prospect. When the market takes big dips, he just laughs when I tell him the world is on sale. He knows we'll be fine in the long-term. He also knows we will be able to retire no later than 60 [kids will graduate college when we're 55, so I've added a few years to give us a chance to get back on our feet after 8 years of college bills crammed into 4 years].

I think if you try setting some financial goals, put a plan together that you are comfortable with, and try to get your husband to agree to try it for a while, you will build up a comfort level. It doesn't have to be much. We started with $50 a month in a DRP and kept adding to what we were saving and investing. After some time with a good track record, you will both feel better having you in control than paying someone else to do it, especially when a broker only makes money when you are trading which is not the same as investing. Start small and go slowly. You can always increase your investment funds as you go, and move quicker as you get more experience.

If I think of anything else that might be helpful, I'll let you know.


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