Your Financial Relationships: Are You a Saver or a Spender?

This post is part of our Your Financial Relationships series. This series is designed to help you discover the financial topics you should discuss with your significant other in order to have a financially healthy relationship. Today we’ll be looking at spending and saving in relationships.

Relationships are complex… the old saying, “the heart wants what the heart wants” is undeniably true. This series is not intended to tell the “heart” what to do; rather, it is intended to  tell your “head” what to do.

One reader recently commented that he broke up with his girlfriend because her credit card was denied when she tried to pay for their meal. I suspect that his emotional attachment to this young lady was not the stuff of a John Keats poem. No one here is advocating that your love interest, spouse or significant other be selected on the basis of credit score, personal net worth or savings account balance.

Personality characteristics that relate to personal finance are important only in the context of understanding and recognizing the manner in which your significant other approaches financial matters. Armed with this knowledge, you can be proactive in heading off financial trouble in your relationship before it occurs. Today, we are going to focus on savers and spenders, the polar opposites, the Democrats and Republicans if you will, of personal financial behavior.

Asking the Questions

The habits of savers and the habits of spenders are so obvious that asking questions to reveal one or the other trait is hardly necessary. Instead, I recommend asking questions that reveal  motivation. For example, your significant other returns from a grocery errand, the objective of which was milk, bread and eggs. You observe that they he/she has returned with two bags of groceries, not the one bag that was expected.

How many of you have already concluded that our errand runner is a “spender?” Hands? Well, you are wrong!

By having a conversation (not an argument), it is revealed that the supermarket was having a sale on milk. Instead of $3.59/gallon, milk was on sale at two for $5. The sale extended to bread which was “buy two loaves, get one free.” Eggs were also on sale, prompting the purchase of two dozen instead of one.

This illustrates the importance of having a conversation. Assumptions are dangerous. Learning the spending habits of your significant other is not enough. You must also understand the motivations, which in this instance, were to save money.

Compulsive Spenders—Out of Control Savers

Moderation is always the key to successful resolution of the conflicts arising when savers and spenders find themselves paired in a relationship. Out of control savers can be just as damaging to a couple’s future financial security as the compulsive spender.

In this example, you and your significant other have decided to purchase a home. Originally, it was agreed that saving up for a 25 percent down payment was the way to go. However, the house of your dreams has just come to market, and it is selling 10 percent below its true market value. At this point, your down payment represents just 18 percent of the selling price.

Make the Argument

The case favoring proceeding with the purchase of the home is an easy one to make. Adding the 10% discount to the 18% down payment results in the equivalent of a 28% down payment, which satisfies the saver’s 25% target? Of course, proceeding with the purchase requires discussion and compromise. An obstinate saver could blow the deal.

This is why it is so important for each partner to feel comfortable challenging the other’s position, putting forward his/her best argument and compromising or acceding to the merits of the winning argument. This is the key to a healthy financial future.

What about You?

What can you add to the discussion? Are you a saver paired with a spender? Any thoughts on the future of a pair of  spenders? Savers?

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