Relatives who just don't get it

[SwordGuy]

I read a post on FB last week where the person said they took their ~3 year old car to the dealership for an oil change and while there they were told they needed new tires. The poster didn’t want to spend the money on new tires so she just traded her car in for the newest model. I can’t even imagine thinking this would be better than getting the new tires.

First, start from the position that:

1) Credit cards have "space" on them that can be filled (instead of the way we view it as a liability to be avoided).
2) You've filled up all that "space" on the cards.
3) You have little to no savings because, well, you can't save because of all the debt payments you have to pay each month.
4) Tires would be an extra cost on top of the monthly payments and there's no wiggle room.
5) Therefore, it's "more affordable" to trade which car you make payments on instead of paying for the tires.

Hope that helps.

Now I need to go wash my brain out with soap.

[jinga nation]

I read a post on FB last week where the person said they took their ~3 year old car to the dealership for an oil change and while there they were told they needed new tires. The poster didn’t want to spend the money on new tires so she just traded her car in for the newest model. I can’t even imagine thinking this would be better than getting the new tires.

First, start from the position that:

1) Credit cards have "space" on them that can be filled (instead of the way we view it as a liability to be avoided).
2) You've filled up all that "space" on the cards.
3) You have little to no savings because, well, you can't save because of all the debt payments you have to pay each month.
4) Tires would be an extra cost on top of the monthly payments and there's no wiggle room.
5) Therefore, it's "more affordable" to trade which car you make payments on instead of paying for the tires.

Hope that helps.

Now I need to go wash my brain out with soap.

OMG! That's a heckton of logic gates being flip-flopped.
Please ensure the soap is organic and biodegradable and from sustainable/renewable resources. Because the environment is running out of wiggle room. :-p

[Syonyk]

That's actually a really good description of how a lot of people think about money, debt, credit cards, payments, etc.

I talked to someone at one point who had the view that when you paid a car off, then you bought a new one.  Because if you didn't have car payments, that money would end up going to payments on something else, and then you wouldn't have money to buy a car when you needed one.  It was utterly baffling, but I certainly see that sort of behavior.

[Zikoris]

That's actually a really good description of how a lot of people think about money, debt, credit cards, payments, etc.

I talked to someone at one point who had the view that when you paid a car off, then you bought a new one.  Because if you didn't have car payments, that money would end up going to payments on something else, and then you wouldn't have money to buy a car when you needed one.  It was utterly baffling, but I certainly see that sort of behavior.

I told a coworker once about putting stuff on credit cards for the points and paying it off every month so no interest/fees. Simple concept, right? No, apparently it doesn't work because you won't have enough money to pay it off. Even though your spending and income was exactly the same, just on the credit card versus cash. He explained that it's impossible to just have money in the bank because it gets spent, so my system would be a disaster in even one month. I was like.... Well, couldn't you just NOT spend it? Lol.

[RetiredAt63]

That's actually a really good description of how a lot of people think about money, debt, credit cards, payments, etc.

I talked to someone at one point who had the view that when you paid a car off, then you bought a new one.  Because if you didn't have car payments, that money would end up going to payments on something else, and then you wouldn't have money to buy a car when you needed one.  It was utterly baffling, but I certainly see that sort of behavior.

I told a coworker once about putting stuff on credit cards for the points and paying it off every month so no interest/fees. Simple concept, right? No, apparently it doesn't work because you won't have enough money to pay it off. Even though your spending and income was exactly the same, just on the credit card versus cash. He explained that it's impossible to just have money in the bank because it gets spent, so my system would be a disaster in even one month. I was like.... Well, couldn't you just NOT spend it? Lol.

My X would see the bank account was healthy and spend the money on something, even though it was already earmarked for something else.  I hate to remember how often I paid the minimum on the credit card payments.  It wasn't that he didn't know, because I told him often enough, it just never sank in.  So I can perfectly understand people thinking that way.  We are all here because we don't think that way.

[Sugaree]

That's actually a really good description of how a lot of people think about money, debt, credit cards, payments, etc.

I talked to someone at one point who had the view that when you paid a car off, then you bought a new one.  Because if you didn't have car payments, that money would end up going to payments on something else, and then you wouldn't have money to buy a car when you needed one.  It was utterly baffling, but I certainly see that sort of behavior.

I told a coworker once about putting stuff on credit cards for the points and paying it off every month so no interest/fees. Simple concept, right? No, apparently it doesn't work because you won't have enough money to pay it off. Even though your spending and income was exactly the same, just on the credit card versus cash. He explained that it's impossible to just have money in the bank because it gets spent, so my system would be a disaster in even one month. I was like.... Well, couldn't you just NOT spend it? Lol.

My X would see the bank account was healthy and spend the money on something, even though it was already earmarked for something else.  I hate to remember how often I paid the minimum on the credit card payments.  It wasn't that he didn't know, because I told him often enough, it just never sank in.  So I can perfectly understand people thinking that way.  We are all here because we don't think that way.

I see we were married to the same man.

[PMG]

Mom?! That you?

[onward19]

I read a post on FB last week where the person said they took their ~3 year old car to the dealership for an oil change and while there they were told they needed new tires. The poster didn’t want to spend the money on new tires so she just traded her car in for the newest model. I can’t even imagine thinking this would be better than getting the new tires.

 I would say this sounds crazy, but it clearly happens often enough for dealers to try to pitch people the idea.

 The last time ( and it was the last time) that I took my car to the dealership for an oil change, they sent the tech out to me in the waiting room to brag on what amazing shape the car was in for it's age, and how well we'd maintained it etc. It really is in amazing shape for it's age. But they went from that into a pitch for the nice shiny new model sitting on the showroom ten feet away, and how much of a good price I'd get on a trade-in since my old car was in such good condition.
  I can see how people would be tempted by that if they already make poor financial decisions and/or are tired of their old car and want something new.

[ysette9]

Or you could just not wash it.... like my embarrassing car.

This is my strategy. My car is white and it barely rains here, so it gets GROSS. Every time I see it I am filled with a mixture of amused disgust and perverse pride. Ideally I only see it once a week or so anyway.

It isn’t my ideal state. I used to love washing my car and taking pride in it. Back when I had time and a driveway to do the work. Now with little kids and urban living the best I can do is take it through the drive-through car wash occasionally, but that doesn’t do anything for the crumb problem in the back seat.

[RetiredAt63]

That's actually a really good description of how a lot of people think about money, debt, credit cards, payments, etc.

I talked to someone at one point who had the view that when you paid a car off, then you bought a new one.  Because if you didn't have car payments, that money would end up going to payments on something else, and then you wouldn't have money to buy a car when you needed one.  It was utterly baffling, but I certainly see that sort of behavior.

I told a coworker once about putting stuff on credit cards for the points and paying it off every month so no interest/fees. Simple concept, right? No, apparently it doesn't work because you won't have enough money to pay it off. Even though your spending and income was exactly the same, just on the credit card versus cash. He explained that it's impossible to just have money in the bank because it gets spent, so my system would be a disaster in even one month. I was like.... Well, couldn't you just NOT spend it? Lol.

My X would see the bank account was healthy and spend the money on something, even though it was already earmarked for something else.  I hate to remember how often I paid the minimum on the credit card payments.  It wasn't that he didn't know, because I told him often enough, it just never sank in.  So I can perfectly understand people thinking that way.  We are all here because we don't think that way.

I see we were married to the same man.

Yes, we were.  As in, we are not now.  Amazing how much further my money goes now.   ;-)

I swear that the ditty about telling the men from the boys by the size (cost?) of their toys has real truth.  Not for all, of course, but for too many.

[sherr]

I swear that the ditty about telling the men from the boys by the size (cost?) of their toys has real truth.  Not for all, of course, but for too many.

Hey, you're about to hurt my astronomy-loving feelings. ;)

[RetiredAt63]

I swear that the ditty about telling the men from the boys by the size (cost?) of their toys has real truth.  Not for all, of course, but for too many.

Hey, you're about to hurt my astronomy-loving feelings. ;)

You are on these forums, I would assume you thought long and hard before buying any of your equipment. And I am also assuming this is a serious hobby, not just buying equipment on a whim. If not, feel free to give yourself a face punch.  ;-)

I am sure there are husbands (or ex-husbands*) who could tell the same stories in reverse, but I am amazed at how many women I know, in person and on various forums, who penny pinch while their husbands indulge themselves in every whim.  I even know a few widows who were worried about finances after their husbands died who are finding their finances are actually in better shape.  The small indulgences also add up, as we know from Pete's get rich $10 at a time blog.

* We know there are mustachians of both genders who post here, who have been through the financial and emotional hell that is divorce.  In the long run the finances end up OK, because we are mustachian and we do make them work.

[Taran Wanderer]

Speaking of weird marriage arrangements, I have a college friend who got married about a year after graduation.  She was a teacher, he was a pharmaceutical sales rep.  Their financial arrangement (per his request) was that they split all expenses equally - rent, utilities, groceries, etc.  Of course, at the end of the month, he always had money for new skis, golf clubs, clothes, you name it.  She did not.  That lasted about a year before they divorced.  At least she recognized the situation and resolved it quickly.

[Zikoris]

Speaking of weird marriage arrangements, I have a college friend who got married about a year after graduation.  She was a teacher, he was a pharmaceutical sales rep.  Their financial arrangement (per his request) was that they split all expenses equally - rent, utilities, groceries, etc.  Of course, at the end of the month, he always had money for new skis, golf clubs, clothes, you name it.  She did not.  That lasted about a year before they divorced.  At least she recognized the situation and resolved it quickly.

There's nothing inherently wrong with that arrangement. I've always had that setup - split joint expenses 50/50, pay individual expenses separately - because I am super egalitarian and have no interest in either subsidizing someone else, or being subsidized. But the key is, you need to have a standard of living that works for the lower earner - it's fucked up to ask for 50/50 and then also push for housing, food, etc beyond the lower earner's ability to afford. And honestly, a teacher would have to be pretty dumb to not realize ahead of time that separate expenses with a high earner would mean... they had more money left over.

[SwordGuy]

Speaking of weird marriage arrangements, I have a college friend who got married about a year after graduation.  She was a teacher, he was a pharmaceutical sales rep.  Their financial arrangement (per his request) was that they split all expenses equally - rent, utilities, groceries, etc.  Of course, at the end of the month, he always had money for new skis, golf clubs, clothes, you name it.  She did not.  That lasted about a year before they divorced.  At least she recognized the situation and resolved it quickly.

There's nothing inherently wrong with that arrangement. I've always had that setup - split joint expenses 50/50, pay individual expenses separately - because I am super egalitarian and have no interest in either subsidizing someone else, or being subsidized. But the key is, you need to have a standard of living that works for the lower earner - it's fucked up to ask for 50/50 and then also push for housing, food, etc beyond the lower earner's ability to afford. And honestly, a teacher would have to be pretty dumb to not realize ahead of time that separate expenses with a high earner would mean... they had more money left over.

I've noted over the last 8 years on MMM that those who think this arrangement is fair tend to make the same or much more than their partners.    I've also noted over a lifetime that folks who benefit from ANY arrangement tend to believe it's the right and proper way to do things and have little interest or motivation to learn otherwise.   Quite a lot of resistance to learning otherwise is often the case, actually.

I'm not saying any specific person is, I'm just noting a general pattern that's very often true.

My wife and I are a a team.   We each bring different strengths to our marriage.   Only one of those strengths to consider is our ability to bring in income.   My wife is way better at giving us a way better standard of living for what we spend than I would ever be.  It would cost us 20% more (at least!) if I was in charge of food and clothing expenses.   One of us needed a job with more flexibility in its hours because of our disabled child, my job ended up requiring a fair bit of travel and longer hours over the years.    My wife did more around the house because of that, too.

To split expenses evenly and keep our own individual income left over would have been grossly unfair in our situation.

Plus, we're a team and we're in this together.

[Metalcat]

That's actually a really good description of how a lot of people think about money, debt, credit cards, payments, etc.

I talked to someone at one point who had the view that when you paid a car off, then you bought a new one.  Because if you didn't have car payments, that money would end up going to payments on something else, and then you wouldn't have money to buy a car when you needed one.  It was utterly baffling, but I certainly see that sort of behavior.

This is extremely common thinking. Far, far more common than you would expect, to the point that I would even call it the norm in a lot of circles.

I knew a financial advisor who thought this way. He had a low mileage Subaru that he had put a ton of money into modifying. Anyway, once it was paid off, he made the RADICAL decision to keep his beloved, low mileage, heavily modified car instead of trading it in and dumping more money into modifying another car.

He was so amazed by the cash flow it freed up, he actually walked around telling people "my car LITERALLY makes me money every month!! LITERALLY!"

Yeah...this guy got paid, quite well, to give people financial advice.

...while his car LITERALLY made him money every month by not having a loan payment. SMH.

[Taran Wanderer]

To split expenses evenly and keep our own individual income left over would have been grossly unfair in our situation.

Plus, we're a team and we're in this together.

While DW and I have maintained separate (though linked) checking accounts, which allowed us to manage our own balances back when money was tighter, we’ve managed our money as a team from early on.

It first started about 2 months into dating. I was working, she was in grad school. I wanted to go on a road trip with her, but she couldn’t afford to split the cost of the trip.  The cost was only going to be about $500 of food, gas, and a couple of hotel nights as we would be staying with family most of the time. I said I’d just pay for it, and she declined. She’s an independent (and frugal) woman!

We ended up agreeing to split the cost of the trip proportionally to our income. I think she paid for the motel 6 and a tank of gas. I paid for the other 4 tanks and food and the B&B. I’ve always brought in more income, but we’re a team and we figure out the saving and spending together. Money is about the only thing we’ve never argued about, which is weird because it seems to be such a point of conflict for so many others. 

[kanga1622]

I swear that the ditty about telling the men from the boys by the size (cost?) of their toys has real truth.  Not for all, of course, but for too many.

Hey, you're about to hurt my astronomy-loving feelings. ;)

You are on these forums, I would assume you thought long and hard before buying any of your equipment. And I am also assuming this is a serious hobby, not just buying equipment on a whim. If not, feel free to give yourself a face punch.  ;-)

I am sure there are husbands (or ex-husbands*) who could tell the same stories in reverse, but I am amazed at how many women I know, in person and on various forums, who penny pinch while their husbands indulge themselves in every whim.  I even know a few widows who were worried about finances after their husbands died who are finding their finances are actually in better shape.  The small indulgences also add up, as we know from Pete's get rich $10 at a time blog.

* We know there are mustachians of both genders who post here, who have been through the financial and emotional hell that is divorce.  In the long run the finances end up OK, because we are mustachian and we do make them work.

I had an aunt that had exactly 1 bra that she hand washed every night and a few pair of underwear that the elastic was basically shot. She pinched every penny she could to try to keep them afloat. Meanwhile, her husband was working part time while in grad school (taking it all on loans) and buying himself new clothes all the time because he was a “professional.” She was in a much better place when she decided his infidelity (financial and otherwise) would no longer be her problem. But the debt she took on in the divorce was just crazy!

[Just Joe]

I read a post on FB last week where the person said they took their ~3 year old car to the dealership for an oil change and while there they were told they needed new tires. The poster didn’t want to spend the money on new tires so she just traded her car in for the newest model. I can’t even imagine thinking this would be better than getting the new tires.

That is some amazing magical math... ;)

[Imma]

Speaking of weird marriage arrangements, I have a college friend who got married about a year after graduation.  She was a teacher, he was a pharmaceutical sales rep.  Their financial arrangement (per his request) was that they split all expenses equally - rent, utilities, groceries, etc.  Of course, at the end of the month, he always had money for new skis, golf clubs, clothes, you name it.  She did not.  That lasted about a year before they divorced.  At least she recognized the situation and resolved it quickly.

There's nothing inherently wrong with that arrangement. I've always had that setup - split joint expenses 50/50, pay individual expenses separately - because I am super egalitarian and have no interest in either subsidizing someone else, or being subsidized. But the key is, you need to have a standard of living that works for the lower earner - it's fucked up to ask for 50/50 and then also push for housing, food, etc beyond the lower earner's ability to afford. And honestly, a teacher would have to be pretty dumb to not realize ahead of time that separate expenses with a high earner would mean... they had more money left over.

I've noted over the last 8 years on MMM that those who think this arrangement is fair tend to make the same or much more than their partners.    I've also noted over a lifetime that folks who benefit from ANY arrangement tend to believe it's the right and proper way to do things and have little interest or motivation to learn otherwise.   Quite a lot of resistance to learning otherwise is often the case, actually.

I'm not saying any specific person is, I'm just noting a general pattern that's very often true.

My wife and I are a a team.   We each bring different strengths to our marriage.  (...)

To split expenses evenly and keep our own individual income left over would have been grossly unfair in our situation.

We have the same arrangement as @Zikoris. Our family situations are also quite similar I think - in our 30s, no children, not really career focused, no or little student loans, living a modest life even by MMM standards. As you say @SwordGuy, in your situation, raising a child, especially a disabled child which (I assume) is even harder than raising a healthy child, it makes sense that one half of a couple focuses on that while the other focuses on their career. And it would certainly not be fair if a woman who works parttime or not at all to care for a disabled child has no money of her own to get a haircut while her husband can spend on whatever he likes. I think very few people would think that's fair. In our case, we make sure the "big pots" of money are seperate but it's not like he can't eat "my" food in the fridge or something (which is what some people think we do!) . We have a joint account for food and bills that we both put money into and for small expenses the person who has their wallet with them pays.

But I don't really consider Mr Imma and I to be a "team". I know he has my back and will help me whenever he can, but we don't have a joint "thing" to work on as a team. I live my life, he lives his life. We don't have children or a joint business or a farm or anything like that.

When we met, I had a lower income than he did, and lived in a cheap rental that I paid for on my own. When he first moved in, we had to discuss how much we were each going to pay towards the rent, and I didn't feel it would be fair if he would pay 75% of the rent because he made more money. Effectively that would mean I would make a profit off him. It didn't feel right. Besides, my income was lower but I was putting myself through evening classes at the time and I knew I'd probably make the same as him later on in my career. I knew his income would never really increase - he's an artist, he works parttime to pay the bills. He does make a bit more now than he did then, but it's never going to be a lot. He's happy to work this job for his entire life. He's not particularly interested in RE either because he likes the structure work brings to his life.

For the first couple of years my income was lower, then it was similar to his, then we both started to make more money but we were still almost making the same. Now, for the first time, since a couple of months I make significantly more money than he does. We have been thinking of how to handle this, because we both like the 50/50 split that we've been doing for years. We are both financially responsible but we make different choices. As a child of an abusive marriage, it's also extremely important for me to always have access to money that is mine alone.

However, due to my new high income, he no longer qualifies for subsidized healthcare either, so I've decided to pay health insurance for both of us now. We like our current lifestyle so I'm not expecting much of a lifestyle creep. At this point, my net worth is about €10k higher than his, even though our incomes were similar. But from now on, my net worth will go up significantly every month. It does feel a bit weird, but on the other hand it doesn't really feel that unfair. He has spent most of his free time over the years making art, something he enjoys but knows will probably never earn him a lot of money. I've spent my free time studying, putting myself through undergrad and grad school while working. I didn't really enjoy that but I knew it would pay off. Different choices, different results. Because I also have a disability, reaching FI ASAP is extremely important to me. I want to be able to stop working when I want to, when I'm still healthy, instead of being forced to work until I no longer can in order to qualify for a disability payment.

[havregryn]

Speaking of weird marriage arrangements, I have a college friend who got married about a year after graduation.  She was a teacher, he was a pharmaceutical sales rep.  Their financial arrangement (per his request) was that they split all expenses equally - rent, utilities, groceries, etc.  Of course, at the end of the month, he always had money for new skis, golf clubs, clothes, you name it.  She did not.  That lasted about a year before they divorced.  At least she recognized the situation and resolved it quickly.

There's nothing inherently wrong with that arrangement. I've always had that setup - split joint expenses 50/50, pay individual expenses separately - because I am super egalitarian and have no interest in either subsidizing someone else, or being subsidized. But the key is, you need to have a standard of living that works for the lower earner - it's fucked up to ask for 50/50 and then also push for housing, food, etc beyond the lower earner's ability to afford. And honestly, a teacher would have to be pretty dumb to not realize ahead of time that separate expenses with a high earner would mean... they had more money left over.

I've noted over the last 8 years on MMM that those who think this arrangement is fair tend to make the same or much more than their partners.    I've also noted over a lifetime that folks who benefit from ANY arrangement tend to believe it's the right and proper way to do things and have little interest or motivation to learn otherwise.   Quite a lot of resistance to learning otherwise is often the case, actually.

I'm not saying any specific person is, I'm just noting a general pattern that's very often true.

I love this post!
In Sweden there seems to be a borderline obsession with being super individual and almost everyone is dividing expenses this way. I have yet to meet a divorced woman who didn't royally screw herself over this way. Because they tend to earn less and spend more on kids etc.
In any situation where this would be 100% fair (both partners earn the same and spend the same) it would also be 100% irrelevant (because math).
In all other situations, they are punishing the lower earner for no obvious reason. Ironically, outside this forum I get the opposite vibe than what you say. Most high earning men I know like to have the wives take over a larger chunk of care for kids but also understand that it can only work if total income is shared fairly. I usually meet low earning women who seem to have been brainwashed into believing that being economically exploited by their partners is a badge of feminist pride.

[Roadrunner53]

That's actually a really good description of how a lot of people think about money, debt, credit cards, payments, etc.

I talked to someone at one point who had the view that when you paid a car off, then you bought a new one.  Because if you didn't have car payments, that money would end up going to payments on something else, and then you wouldn't have money to buy a car when you needed one.  It was utterly baffling, but I certainly see that sort of behavior.

I told a coworker once about putting stuff on credit cards for the points and paying it off every month so no interest/fees. Simple concept, right? No, apparently it doesn't work because you won't have enough money to pay it off. Even though your spending and income was exactly the same, just on the credit card versus cash. He explained that it's impossible to just have money in the bank because it gets spent, so my system would be a disaster in even one month. I was like.... Well, couldn't you just NOT spend it? Lol.

I use my CC for everything and pay it off at the end of the month. I know approximately how much I need to pay off the card and each week I have 1/4 taken out and deposited into another account 'for safe keeping'. At the end of the month when I get the bill, I transfer all 4 weeks deposits back over to the regular checking and PAY THE CC OFF! It isn't rocket science! I like to remove the money from the account just so I am not tempted to spend foolishly and not have enough to pay off my bill. The transfer is automatic each week so no work involved until I transfer the sum back on a date that I choose. The coworker you mentioned could get into a habit of paying his CC each week. He could make 4 payments a month or two payments a month. The CC people won't reject early payments!

[Imma]

@havregryn I had no idea this was common in Sweden. I've never met anyone in real life who does this.

In my country (the Netherlands) the "all income in one pot" approach is absolutely the most common, not just for people in traditional relationships where people are married and one is the breadwinner, but in almost all life situations. Personally I don't think this is a great idea unless people are actually married. I've heard far too many stories about people moving in together, putting all of the money in one account, use that joint money to pay off one person's mortgage or student loan, then a break-up happens and one person is left with empty hands. I wouldn't want to fully share my income without going all in - all assets in both names and a legal right to spousal support to protect the spouse that gives up work to care for the children.

I have a friend with 3 kids, lives for free in a house owned by her in-laws, unmarried to her partner, doesn't work. Hasn't really worked since leaving college as they started their family young. Their life sounds nice now (without bills to pay one income can easily support their family) but if her man ever decides to leave her she'll have to go back to her parents. And if he would pass away she's going to be totally dependent on the charity of his family. She has no rights at all. I think she's an idiot for putting herself in this situation.

[RetiredAt63]

That's actually a really good description of how a lot of people think about money, debt, credit cards, payments, etc.

I talked to someone at one point who had the view that when you paid a car off, then you bought a new one.  Because if you didn't have car payments, that money would end up going to payments on something else, and then you wouldn't have money to buy a car when you needed one.  It was utterly baffling, but I certainly see that sort of behavior.

I told a coworker once about putting stuff on credit cards for the points and paying it off every month so no interest/fees. Simple concept, right? No, apparently it doesn't work because you won't have enough money to pay it off. Even though your spending and income was exactly the same, just on the credit card versus cash. He explained that it's impossible to just have money in the bank because it gets spent, so my system would be a disaster in even one month. I was like.... Well, couldn't you just NOT spend it? Lol.

I use my CC for everything and pay it off at the end of the month. I know approximately how much I need to pay off the card and each week I have 1/4 taken out and deposited into another account 'for safe keeping'. At the end of the month when I get the bill, I transfer all 4 weeks deposits back over to the regular checking and PAY THE CC OFF! It isn't rocket science! I like to remove the money from the account just so I am not tempted to spend foolishly and not have enough to pay off my bill. The transfer is automatic each week so no work involved until I transfer the sum back on a date that I choose. The coworker you mentioned could get into a habit of paying his CC each week. He could make 4 payments a month or two payments a month. The CC people won't reject early payments!

Your banking situation may mean you can't do this, but why not just pay it off more often?  I use online banking, so every week or 2 I just go online and pay off my cards in full.  This means I never worry about payment due dates, they are as irrelevant as interest rates.  The money is in a chequing account, so I'm not losing any interest money by using it in chunks rather than all at once.

[Adventine]

@
I have a friend with 3 kids, lives for free in a house owned by her in-laws, unmarried to her partner, doesn't work. Hasn't really worked since leaving college as they started their family young. Their life sounds nice now (without bills to pay one income can easily support their family) but if her man ever decides to leave her she'll have to go back to her parents. And if he would pass away she's going to be totally dependent on the charity of his family. She has no rights at all. I think she's an idiot for putting herself in this situation.

That IS a difficult situation. In that situation, even as the biological mother of their three children, she could not legally oblige her partner to provide financial support after separation?

[economista]

That's actually a really good description of how a lot of people think about money, debt, credit cards, payments, etc.

I talked to someone at one point who had the view that when you paid a car off, then you bought a new one.  Because if you didn't have car payments, that money would end up going to payments on something else, and then you wouldn't have money to buy a car when you needed one.  It was utterly baffling, but I certainly see that sort of behavior.

I told a coworker once about putting stuff on credit cards for the points and paying it off every month so no interest/fees. Simple concept, right? No, apparently it doesn't work because you won't have enough money to pay it off. Even though your spending and income was exactly the same, just on the credit card versus cash. He explained that it's impossible to just have money in the bank because it gets spent, so my system would be a disaster in even one month. I was like.... Well, couldn't you just NOT spend it? Lol.

I use my CC for everything and pay it off at the end of the month. I know approximately how much I need to pay off the card and each week I have 1/4 taken out and deposited into another account 'for safe keeping'. At the end of the month when I get the bill, I transfer all 4 weeks deposits back over to the regular checking and PAY THE CC OFF! It isn't rocket science! I like to remove the money from the account just so I am not tempted to spend foolishly and not have enough to pay off my bill. The transfer is automatic each week so no work involved until I transfer the sum back on a date that I choose. The coworker you mentioned could get into a habit of paying his CC each week. He could make 4 payments a month or two payments a month. The CC people won't reject early payments!

Your banking situation may mean you can't do this, but why not just pay it off more often?  I use online banking, so every week or 2 I just go online and pay off my cards in full.  This means I never worry about payment due dates, they are as irrelevant as interest rates.  The money is in a chequing account, so I'm not losing any interest money by using it in chunks rather than all at once.

I 2nd this suggestion. I get paid every 2 weeks so on payday I just go in and pay the balances in full. I have no idea when my payments are actually due and I never look at the statements. I just look at the transactions online when I make my payments.

[Imma]

@
I have a friend with 3 kids, lives for free in a house owned by her in-laws, unmarried to her partner, doesn't work. Hasn't really worked since leaving college as they started their family young. Their life sounds nice now (without bills to pay one income can easily support their family) but if her man ever decides to leave her she'll have to go back to her parents. And if he would pass away she's going to be totally dependent on the charity of his family. She has no rights at all. I think she's an idiot for putting herself in this situation.

That IS a difficult situation. In that situation, even as the biological mother of their three children, she could not legally oblige her partner to provide financial support after separation?

For the children, yes, but not for herself. In my country most divorced parents share care 50/50 (so you only receive child support for the days the child is with you) and child support is a standard amount based on tables, not a matter for endless discussion like in American courts. In their income situation she'd get maybe €400 in total child support if she's lucky.

If she was married, she would be entitled to spousal support, and she would automatically be classified as a tenant in their home. That means her in-laws wouldn't easily be able to evict her - the deal that they made with her husband would automatically transfer to her.

[Adventine]

@Imma it does sound like she's put herself at a really significant disadvantage. Let's hope the relationship doesn't break down.

[Apples]

To those who rationalize the "split expenses with separate incomes" strategy - why don't you view yourselves as a household that makes joint decisions, and then you each get a set amount of spending money to do whatever with?  If the higher earner's job requires living in a HCOLA, then that severely disadvantages the lower earner (this exact situation happened with a friend of mine).  Partner1 is an aerospace engineer, and lives in and around major cities, because that's where big airports are.  Partner2 had online work that could be done anywhere, but had no bump for living in a HCOLA.  Keeping their incomes separate was deeply unfair, in my opinion, to Parter2.  Another friend couple has PartnerA in the military, so while they get pay bumps/decreases based on where they live, PartnerB has to reapply for jobs in the new area, and has has more and less success depending on where they live.  Again, another situation where splitting expenses evenly is unfair to the second partner.

Finally, relationships and marriage are mini socialism.  You take care of each other.  What would you do, income and budget-wise, if one person is out of work for 6 months? A year?  Got Covid and is in the hospital for a month?  The split arrangement doesn't accommodate those much.

[sherr]

To those who rationalize the "split expenses with separate incomes" strategy - why don't you view yourselves as a household that makes joint decisions, and then you each get a set amount of spending money to do whatever with?

So my wife and I do have combined finances, and I agree with you as to the specific examples you gave. But people are free to work out their own relationships as they wish to, I'm not going to prescribe to them that they must do it my way. Split finances can also help in a number of situations, such as when one spouse is much spender than the other. It's a lot easier to not feel resentful about that if they're merely spending "their money" and you're saving "your money". Pooling it and giving allowances merely invites arguments about how big the allowances should be to some people.

[Zikoris]

To those who rationalize the "split expenses with separate incomes" strategy - why don't you view yourselves as a household that makes joint decisions, and then you each get a set amount of spending money to do whatever with?  If the higher earner's job requires living in a HCOLA, then that severely disadvantages the lower earner (this exact situation happened with a friend of mine).  Partner1 is an aerospace engineer, and lives in and around major cities, because that's where big airports are.  Partner2 had online work that could be done anywhere, but had no bump for living in a HCOLA.  Keeping their incomes separate was deeply unfair, in my opinion, to Parter2.  Another friend couple has PartnerA in the military, so while they get pay bumps/decreases based on where they live, PartnerB has to reapply for jobs in the new area, and has has more and less success depending on where they live.  Again, another situation where splitting expenses evenly is unfair to the second partner.

Finally, relationships and marriage are mini socialism.  You take care of each other.  What would you do, income and budget-wise, if one person is out of work for 6 months? A year?  Got Covid and is in the hospital for a month?  The split arrangement doesn't accommodate those much.

Because to people like us, that's just really unappealing and we have no desire to do so? I personally don't believe in having "spending money". It's not how I operate. Some people, like me, just have a personality type where they need total autonomy in such regards, and the idea of joint finances is really repulsive.

Now, for how I'd handle each of those situations.

There's no such thing as HCOL in my opinion. Any city you look at, you'll have people spending at all different levels. I've lived very cheaply in the most expensive city in Canada for most of my adult life. So for the first situation, I would say just find a way to live cheaply in the so-called HCOL place, that's no problem.

If I was going to be moving a lot for the sake of a partner, I would steer my job path towards remote work or highly transferable skills that let me find work quickly.

I would never be out of work for long periods of time, because I'm not like that. I'm the kind of person who's happy to take whatever job there is if I can't find something perfect. Office, factory, labour, whatever, no problem.

It would suck being in the hospital with COVID, but I'm not sure what the problem there would be with regards to separate finances? It's not like I'd be spending anything while hooked up to machines in the hospital.

For what it's worth, I don't think there's only one holy grail system for this stuff, because every person's relationship and feelings on the matter are different. But I do think it's funny how like clockwork, the two sides on this issue are always the same. Separate finances people are like "This is how we do things, one option among many" and the joint people are like "This is the only way, otherwise you're basically not even married, do you even TEAM". Seriously, like clockwork.

[sherr]

It would suck being in the hospital with COVID, but I'm not sure what the problem there would be with regards to separate finances? It's not like I'd be spending anything while hooked up to machines in the hospital.

Lol, what a not-American (USAican?) thing to say.

[RetiredAt63]

To those who rationalize the "split expenses with separate incomes" strategy - why don't you view yourselves as a household that makes joint decisions, and then you each get a set amount of spending money to do whatever with?

So my wife and I do have combined finances, and I agree with you as to the specific examples you gave. But people are free to work out their own relationships as they wish to, I'm not going to prescribe to them that they must do it my way. Split finances can also help in a number of situations, such as when one spouse is much spender than the other. It's a lot easier to not feel resentful about that if they're merely spending "their money" and you're saving "your money". Pooling it and giving allowances merely invites arguments about how big the allowances should be to some people.

That doesn't help much in the case of divorce.  The shared assets accumulated during the marriage generally get split.  So if A is a saver and B is a spender, then A's assets will get split with B.  They would need some sort of pre- or post-nup to protect A's savings.

In Canada RRSPs are set up so that the higher earner (married) can contribute to the lower earner's RRSP.  It evens out income after retirement, but it also gives the lower earner some financial acknowledgement/benefit if they divorce.

Financial arrangements are also usually different in late marriages/second marriages, where assets built over over time come into the marriage.  I know that if I were to get married again (nope, never) I would do the financial arrangements much differently, simply because of my stage in life.

@Zikoris, we have good health care.  Someone without good health care might really be nailed if they got a serious case of Covid, or anything else.  Plus there is always the issue of lost income during illness, without good insurance.  When I had pneumonia for over a month many years ago, I was fine financially because I had short term health insurance so no loss of income, I took sick leave from work, and my workplace insurance covered the drugs.  Quebec healthcare covered the x-rays and so on, and would have covered hospital costs if I had needed hospitalization.  Financially it was nothing.

@sherr   Definitely not an American thing to say  But it could have been Canada, Australia, New Zealand, UK, most/all of the EU, etc.  Americans have a health system not worthy of their nation's economic status.

[sherr]

@sherr   Definitely not an American thing to say  But it could have been Canada, Australia, New Zealand, UK, most/all of the EU, etc.  Americans have a health system not worthy of their nation's economic status.

Oh I know. I said it was a "not-American" thing to say on purpose, not a "Canadian" thing to say.

[Imma]

To those who rationalize the "split expenses with separate incomes" strategy - why don't you view yourselves as a household that makes joint decisions, and then you each get a set amount of spending money to do whatever with?  If the higher earner's job requires living in a HCOLA, then that severely disadvantages the lower earner (this exact situation happened with a friend of mine).  Partner1 is an aerospace engineer, and lives in and around major cities, because that's where big airports are.  Partner2 had online work that could be done anywhere, but had no bump for living in a HCOLA.  Keeping their incomes separate was deeply unfair, in my opinion, to Parter2.  Another friend couple has PartnerA in the military, so while they get pay bumps/decreases based on where they live, PartnerB has to reapply for jobs in the new area, and has has more and less success depending on where they live.  Again, another situation where splitting expenses evenly is unfair to the second partner.

Finally, relationships and marriage are mini socialism.  You take care of each other.  What would you do, income and budget-wise, if one person is out of work for 6 months? A year?  Got Covid and is in the hospital for a month?  The split arrangement doesn't accommodate those much.

Because to people like us, that's just really unappealing and we have no desire to do so? I personally don't believe in having "spending money". It's not how I operate. Some people, like me, just have a personality type where they need total autonomy in such regards, and the idea of joint finances is really repulsive.

Now, for how I'd handle each of those situations.

There's no such thing as HCOL in my opinion. Any city you look at, you'll have people spending at all different levels. I've lived very cheaply in the most expensive city in Canada for most of my adult life. So for the first situation, I would say just find a way to live cheaply in the so-called HCOL place, that's no problem.

If I was going to be moving a lot for the sake of a partner, I would steer my job path towards remote work or highly transferable skills that let me find work quickly.

I would never be out of work for long periods of time, because I'm not like that. I'm the kind of person who's happy to take whatever job there is if I can't find something perfect. Office, factory, labour, whatever, no problem.

It would suck being in the hospital with COVID, but I'm not sure what the problem there would be with regards to separate finances? It's not like I'd be spending anything while hooked up to machines in the hospital.

For what it's worth, I don't think there's only one holy grail system for this stuff, because every person's relationship and feelings on the matter are different. But I do think it's funny how like clockwork, the two sides on this issue are always the same. Separate finances people are like "This is how we do things, one option among many" and the joint people are like "This is the only way, otherwise you're basically not even married, do you even TEAM". Seriously, like clockwork.

I was going to type this but you already did. We all make choices and with some life choices, separate finances may be more difficult to maintain. For some people, like me, the one pot approach would be extremely difficult. My partner makes the choice, for himself, to work as little as possible, to focus on his art. That was a 'take it or leave it' deal from the start. I took the deal knowing full well what the consequences would be for me. And he knew from the start that I always want to have access to money that's exclusively mine.

Which is, for example, a reason that I'd never start a relationship with someone in the military. I know that I'm the type of person that needs to put down roots. I wouldn't be suited to that life. My friend's husband is in the military and she did what Zikoris already suggested, she became an excellent interim office manager/PA/secretary. She is very well paid and has turned the frequent moving into something that's actually a career advantage in her case.

I'm from a country with decent social security so if my partner was unemployed or disabled or in hospital with Covid that would not affect our household finances at all. All those benefits would by the way go to him, personally, and would be based on his income, because in our country, for the purpose of social security, there's no such thing as a household, only individual tax payers.

The only way our household finances would be affected is when he would quit working without having a stash or any kind of claim to social security, so just quitting a job to basically sit on his ass all day. If he did that I would kick him out and I'd live on my own income and I'd still have more than enough.

We do have access to each others bank accounts, so in case of emergency, if I ran out of money while he was in a coma, I could take money out of his account. We've been together for years and years so I trust his judgement with my money when I'm unconscious.

@RetiredAt63 I assume that people with seperate finances usually have pre-nups. Otherwise you don't really have seperate finances, just separate wallets. That's a bad idea, because you don't know what you're spouse is doing but you are still responsible. Like my unmarried housewife friend. It's fine if you choose to have a traditional relationship with a breadwinner and a housewife, but please make sure you get the protective framework of marriage.

The standard legal contract of marriage isn't for everyone, but it's better than not having any legal document in place. The best option is to go to a lawyer and have them draw up all the paperwork you need in your unique situation. We did that but it's not cheap.

[RetiredAt63]

@RetiredAt63 I assume that people with seperate finances usually have pre-nups. Otherwise you don't really have seperate finances, just separate wallets. That's a bad idea, because you don't know what you're spouse is doing but you are still responsible. Like my unmarried housewife friend. It's fine if you choose to have a traditional relationship with a breadwinner and a housewife, but please make sure you get the protective framework of marriage.

The standard legal contract of marriage isn't for everyone, but it's better than not having any legal document in place. The best option is to go to a lawyer and have them draw up all the paperwork you need in your unique situation. We did that but it's not cheap.

I agree about the pre-nup, but lots of people (especially young and in love and idealistic people) don't realize that separate wallets =/= separate finances.

Plus here civil law (including marriage and divorce) are provincial, so some provinces recognize common-law marriages and some don't.  So if someone assumes common-law rules in a province where they don't exist, things can get iffy.  And it can go the other way, room-mates of opposite sex can find Revenue Canada thinks they are common-law married!  I had a friend who had to work very hard to kill that idea.  I have friends who have been together forever without actually being married, but they don't have kids.  Given our civil laws, I think here getting married once there are kids planned is essential.

I was one of those young and in love and idealistic people when I got married, and our pre-marriage counseling really didn't cover finances. I didn't even know he had student loan debt! And at that point we were both undergrads heading to grad school so neither of us had any money.  It wasn't until we were working that our different spending/saving habits started to show.

[Mighty Eyebrows]

For the children, yes, but not for herself. In my country most divorced parents share care 50/50 (so you only receive child support for the days the child is with you) and child support is a standard amount based on tables, not a matter for endless discussion like in American courts. In their income situation she'd get maybe €400 in total child support if she's lucky.

If she was married, she would be entitled to spousal support, and she would automatically be classified as a tenant in their home. That means her in-laws wouldn't easily be able to evict her - the deal that they made with her husband would automatically transfer to her.

That is surprising to me, in a progressive country like the Netherlands. In BC (Canada), if you have lived together for 2 years, you are considered equivalent to married (common-law) for any family law matters.
https://www2.gov.bc.ca/gov/content/life-events/divorce/family-justice/family-law/dealing-with-property-and-debt/common-law

As said above, it is worthwhile to write down the partnership assumptions together before getting to this point!

[Just Joe]

Are there any compelling reasons for a couple to avoid getting married in these different countries?

[Plina]

Are there any compelling reasons for a couple to avoid getting married in these different countries?

Mostly there is no compelling reason to get married. In Sweden, it is extremely rare to get spousal support in case of divorce. Housewifes are basically extinct. You can get childsupport. You can not inherit your spouse if you are not married but you can be beneficiary to their retirementsavings. Otherwise there are no advantages today of getting married. You could partly fix the inheritance part through  a testament. On a societal level it is not frowned upon on staying unmarried.

[Apples]

@Zikoris fair enough.  Yeah, the Covid hospital situation is American-based - you rack up dozens or hundreds of thousands in medical costs, which wipe out your savings *unless you have excellent health insurance, which a lot of the population doesn't have*.  Also, for those about to say "out-of-pocket limits", I raise you with "balance billing". 

And finally, here in the US, maternity leave.  The thing that gets a lot of people onto joint finances is that it's unfair to expect the birthing half of the couple to be responsible for covering expenses while on an unpaid maternity leave.

I think I said that marriage is mini socialism.  I guess if you have actual socialism is makes is less necessary to view marriage as such.

[Imma]

Are there any compelling reasons for a couple to avoid getting married in these different countries?

@Mighty Eyebrows we are not a common law country in the Netherlands, that's why we can't have a common law spouse. But except for marriage you can also choose a civil partnership (legally nearly the same thing as marriage but sounds less traditional) and a cohabitation agreement where you and your partner can make your own set of rules. Like in Sweden we can also transfer pension rights to a partner we have a cohabitation agreement with. If you want to leave your estate to a partner you cohabitate with you need a will, but you qualify for the same inheritance tax rate as married or civil partnered (?) couple and in all situations it's easy to become a co-tenant if you rent.
 
 Why so many smart, educated people choose to arrange nothing at all even though there are so many options? I don't know. I think maybe some people don't want to think of bad things that can happen, or maybe because so many people are unmarried these days, they think of marriage or the legal alternatives as a religious ritual and not as something that has serious legal consequences.

@Plina I'm surprised spousal support is rare in Sweden. Do you not have a gender pay gap anymore? Or do you only qualify for spousal support if you don't work at all? In the Netherlands spousal support is still fairly common. The duration is usually only a couple of years but our courts don't think it's fair that a lower earning spouse suddenly has to pay all of their own bills without the support of the high earning spouse, so they basically create a transition period during which the lower earning partner can find a better job or go back to school.

@Apples in this socialist country parents of both genders get paid parental leave. Even female business owners get paid maternity leave. It would be extremely unfair if the woman would have to pay for that on her own.

[Plina]

@Imma We do have a gender gap. Therefore women are encouraged to share the parental leave with the father and the sick days for kids so that they will not be punished when it comes to retirement for ex. You basically have to be a housewife or without income for some other reason to get spousal support. The spousal support would still be limited in time. The kids have a right to maintain the same living standard as they have previously had. So the child support are higher in those cases but that is only the case until the kids are 18 or until they finish high school.

Our social system is mostly based on individuals. Everybody is taxed separately. The parental leave can be taken by both of the parents according to their choices and is based on the income of the parent taking it. The state pension is less if you are married and if you are low income who needs help with rent the income of all people in the household is counted. The sick leave is dependent on your income. We don’t have any inheritance tax.

[alienbogey]

The poster didn’t want to spend the money on new tires so she just traded her car in for the newest model. I can’t even imagine thinking this would be better than getting the new tires.

They did get new tires.  They came with the new car. 

[iluvzbeach]

Haha @alienbogey. You are so right. I stand corrected. 😜

Extraordinarily expensive new tires, but new nonetheless.

[OtherJen]

The poster didn’t want to spend the money on new tires so she just traded her car in for the newest model. I can’t even imagine thinking this would be better than getting the new tires.

They did get new tires.  They came with the new car.

Haha, yes. Much better to spend hundreds of dollars per month for years than to spend $600 once every several years (like my husband just did to replace all the tires on his 20-year-old car).

[Syonyk]

Haha, yes. Much better to spend hundreds of dollars per month for years than to spend $600 once every several years (like my husband just did to replace all the tires on his 20-year-old car).

When your definition of "finances" is "monthly cashflow based," then, quite literally, yes.

A set of tires for a newer car is typically closer to $1000 - depending on wheel size and such, it can be higher.  Of course, that's an unplanned emergency expense, because who knew tires wear out?  If you're spending, say, $500/mo on your car, and have no savings and no slack room in your budget, then rolling it into a new car at $500/mo, with a loan term of "Well, who cares, nobody ever pays off a car anyway..." with the residual loan balance means that you've "saved money" by keeping your monthly payment the same!  That you have a 150 month loan, well... I mean, that's way down the road, so who cares?

It makes sense, from a particular (and depressingly common) point of view about finances.

[Just Joe]

Tire prices are another great reason to drive an older car with more average tires - not high speed, not low profile, not really wide.

My 20 year old V6 domestic sedan tires cost ~$65 each at WalMart. As low as $48 if cost is a major concern.

A modern SUV with 19 inch tires or so are ~$175 or so.

[WerKater]

Or you could just not wash it.... like my embarrassing car.

My car is seven and a half years old. I have not washed it once.

[Sibley]

Or you could just not wash it.... like my embarrassing car.

My car is seven and a half years old. I have not washed it once.

I assume that your area doesn't salt the roads? In the US, the Rust Belt came by its name honestly - salting the roads in winter results in salt on the vehicle, which results in rust over time. Not washing your car, at least to get the salt off, is a really bad idea.

[Mighty Eyebrows]

My area salts the roads and I have never washed a car. It’s been fine.

Caring for one's tools is a sign of respect for the materials and effort that went into making them. It also helps them last longer and work better and so is kinder on the environment, as well.

Some people wash their car too much, but that doesn't make mindlessly rebelling against the stereotype a good idea either.