Welcome to Ask the Bills, where every two weeks Helaine Olen answers readers’ questions about their most nagging personal-finance and financial-etiquette dilemmas. Seeking advice on a money issue? Email firstname.lastname@example.org.
My husband and I got married last summer, but we just combined accounts since that’s what you do, right? We share bills, and it was getting annoying figuring out groceries and things like that. It’s our first month with combined accounts and it removes so much mystery! Do you have any tips for couples merging money for the first time in order to avoid the inevitable sniping about, say, an H&M habit (mine) or a fast-food and energy-drink predilection (his)? I hate energy drinks, so seeing his daily $3.25 charges just irks me. But of course, I’m spending the same amount on coffee. He also buys flowers for me, and now I know I paid for them, too!
Let me tell you about my late Great-Aunt Doris and her husband, Uncle Charlie. Charlie loved steak but, at some point in their marriage, Doris (who was, frankly, something of a cheapskate when it came to spending on people other than herself), decided steak was too expensive. She banned it. No more steak for Uncle Charlie! A few years later, Uncle Charlie died. Doris was distraught. “I should have let Charlie eat steak,” she wailed at the funeral. No one knew what to say—but not because they didn’t want to make her feel guilty. You see, it was well-known in the family that several times a week, Charlie would leave work, walk to a nearby restaurant, and order a steak for lunch. He paid cash and Aunt Doris was none the wiser.
But what, you may be wondering, does that have to do with you? Only this: Don’t deny your spouse small pleasures in the name of saving money! It breeds resentment, anger, and—if Uncle Charlie teaches us anything—sneakiness. Controlling other people, after all, is an all-but-futile task. Do you want your husband going behind your back just to consume an energy drink?
Luckily, you get that dictating how your spouse spends every penny is a bad policy, if for no other reason that you have your minor spending sins, too. No one is perfect. Good on you for recognizing that! So what to do now? My advice: The two of you should come up with a number—a fixed amount both of you can spend each week or month—without checking in. Then honor it.
I know that many believe married couples should maintain separate accounts. They will tell you that you are doing a foolish thing, merging money and marriage. You don’t want your husband to complain about your visits to Starbucks? Easy. Have your own credit card, one you pay from your own account. That strategy absolutely works for some, especially those on second marriages with more complicated familial arrangements. And, yes, it certainly preserves the mystery—you won’t know how much those flowers cost for sure! But, ultimately, you and your spouse are in this together. It’s fine that your finances reflect you are husband and wife.
My boyfriend and I are in our late 20s and have lived together about three years. After living in a one-bedroom apartments, we now make enough steady income to rent a three-bedroom home. This was really important to us: We live far away from our families, so we wanted a guest bedroom, and my boyfriend works at home so a home office was really a necessity. We’re both very conscientious with our incomes. The problem is that we’re putting our money toward bills, savings, and student loans, and I’m not sure how to divert money toward finishing our new home. Our spending money doesn’t give us a lot of room to work with. We live pretty simply, but we also take trips regularly to visit family and friends in other states. I’m fine with used and thrift-store furniture, but since we don’t own a car, paying to transport it would mean it basically costs the same anyway. I’ve been flirting with getting a small loan—$1,000 to $2,000—from our bank. Is it worth it? I think we could fit the monthly payments into our budget. In other words, should money for furnishing our home come from savings, our spending money, or from credit?
Many of us get a particular feeling when we move into a new home—it feels incomplete. If we’re leading a full life, a fulfilling life, we’ll have a fully furnished house, right? Isn’t that’s what adults do?
Wrong. Adults show patience.
I’ve moved enough times to know that it’s best to live in a home first, to get a sense of how you actually live within it, before running out and buying new couches and storage containers all willy-nilly.
Moreover, buying in a rush leads to impulsive, sometimes expensive mistakes. Salespeople can be pushy. Sometimes, they’ll make you a deal on the price if you commit to the purchase immediately. It’s hard to know why one sofa bed is more expensive than another. All too often, we just want to get it over with, and we end up pulling out the plastic and buying something that’s not quite right.
So live with the emptiness for a while. Get a sense of what’s necessary and what you could do without. Visit a few furniture stores and see what’s out there at what price points. Only then should you consider taking on a bank loan to purchase furniture. Otherwise, you could end up paying off a bill for something that makes you unhappy or you’ve given away entirely. And be careful of 0 percent financing offers, something many popular furniture chains offer consumers. (What could be wrong with an interest-free loan, you ask? Well, if you don’t pay it off in the proscribed period, the interest rate will apply—and it might well apply all the way back to the time of purchase.)
As for the used vs. new furniture debate, the best bang for your buck comes from getting used high-end furniture. The discount is usually significant, while the quality of the item itself is frequently still quite high. The low-end stuff? Not so much. But this is a matter of personal preference. Some people—and I confess to being one of them—like the thrill of the hunt, the serendipity of the find. Others find that experience akin to torture. But if you’re like me, the deals can be amazing. I’m answering your letter while sitting on one of a pair of matching Natuzzi loveseats. I paid less than $500 for them—and that included transportation. New? I don’t even want to contemplate what the number would’ve been.
Helaine, I’ve been living and working in Asia for the past 10 years, and it’s time to move back to the States. My wife and I have a fair amount of savings (about $90,000) and want to buy a house as soon as possible. I have stellar credit with zero debt but also no assets other than my savings. My concern is that we will both be starting new jobs, and I am worried about getting a loan. We would put down around $70,000; our price range is $225,000 to $275,000 for a three-bedroom home near a good school for our son. I expect to rent for a year while we hunt down the perfect place and rack up some job history, but I hate to throw away a year’s rent or more when we are ready to buy. What do you recommend?
I seem to be getting a lot of homeownership questions lately. That’s not a surprise. Spring is the most popular time to buy a home in the United States. That makes sense, in one major way. If you have children, like you do, you want to make a move after the school year ends but before the new one starts up again.
But that doesn’t mean I think you should be buying a home, at least right now. You’re returning to the United States after a decade away. You need time to get reacquainted. Lots here changed! A Republican was president when you left. Now we have a Democrat. We experienced a thing called the Great Recession. Millions of people lost their homes to foreclosure. Many school districts saw their budgets cut, sometimes savagely. Then there are little bits of insider knowledge you’re almost certainly not privy too. What is traffic like during the morning rush near the home you plan to buy? You likely don’t know the answer to that question. How could you? You don’t live nearby.
So don’t rush in. Take the time to know the communities where you’re thinking of resettling. Talk to people who are using the local schools to find out what they really think of them. There’s nothing wrong with renting for a year. Yes, it means an additional move and likely additional costs, but it might well prevent you from making an even more expensive mistake.