A recent post (Listening Skills for Spouses) highlighted the failure to listen as a leading cause of marital conflict. The plethora of issues surrounding family finances is another major source of friction. Shawn and I have lived on one income our entire married life, and that choice demands creative planning and agile juggling. Keep reading if you want to learn one of our secrets.
We’ve all heard the lyrics of the popular love songs telling us we can live on love alone, but the brutal truth is there are bills to pay, needs to satisfy, and the future to consider. Shawn and I began in debt with two car loans (both vehicles used, 4+ years old), three college loans, and other assorted obligations. Like other newly-weds we had dreams of owning a house and surmised the best place to start was by eradicating that debt.
I graphed (pre-computer era) our financial state and with each payment we colored another square in the appropriate column. Progress was slow. As one column ended we doubled-down on others.
Our mattress was comfortable on the floor with no frame or headboard. The matching laundry baskets in the closet served as our dresser. We watched a borrowed black and white TV and fiddled with a set-top antenna to zero in on the signal. I snagged a nice couch from a coworker whose wife wanted it out of the den, and we employed a few simple hand tools to create miscellaneous tables and shelves.
The siren song of the shopping mall was powerful. We could outfit our one bedroom luxury palace with stuff to raise the comfort level, but that behavior would not support our longer term goal of home ownership. The solution was delayed gratification.
Shawn and I determined to pay cash for all but major purchases such as a car and to pay off any credit card balances each month. Our plan was to avoid spending money we had not yet earned and to keep our debt obligations under control. Tough choices followed, for example, owning a dining room table and chairs had to wait until we had money in hand to pay for it.
Life offers myriad options for expending our finances. Sixty dollars spent on a frivolous outing would not move the debt counter toward zero or move us closer to saving that down payment. We became proficient at walking away from high-pressure sales pitches as we shopped. Financially savvy people grow shrewder with practice.
Within a few months we derived a financial safeguard that has worked for us for thirty-three years. It’s called The Fifty Dollar Rule and I’m happy to share it with you. Here are the main points.
The Fifty Dollar Rule
- We will not look at any item with a price tag higher than $50 and buy it on the same shopping trip. We will capture the details, walk away, and invest time in the quiet of our home discussing the purchase. We will research the product as best we can.
- After a 24-hour waiting period, if we both agree the buy makes sense, we will return to make the purchase.
- If either of us has misgivings about a purchase in progress, that concern constitutes an immediate veto and we walk away.
- We will always discuss major purchases and any debt acquisition. The vote to move forward must be unanimous.
Observing this simple rule has been a major blessing for us.
What financial advice do you have for a couple just beginning married life?