Supplemental Income - Belongs to the Family or the Spouse?

[UbiCaritas]

I’m not knocking this approach, but I will say I don’t get it. Why not just keep the remaining $480 in the home repair fund the next time something breaks (because it will)? Otherwise you’re starting at zero every time.

We’re not at a place where we can save or invest, either. We have a modest emergency fund and sink funds for expenses that aren’t consistent month to month, but right now there is no “extra.” I am content with my $20 in fun money and don’t even spend it every month.

I just want this debt paid off.

Because “stuff breaking” is an ongoing budget item. We have money set aside for it every month, plus a cushion. If the toilet valve breaks, the cash can go to a plumber, or it can go into a combination of savings/my fun money. Worst case scenario, if something insane happened and wasn’t covered by insurance (the roof spontaneously combusts…? Though I think that’d be covered under homeowners’ insurance.) we could pull some of that money out of savings, where at least it’s earning a little interest by being invested in bonds and the like.

I can sympathize entirely with wanting to pay off that debt. It sounds like you’re on a great plan to do it, though–just five more years!

 

[UbiCaritas]

I don’t think that was what anyone was trying to imply, least of all me.

Honestly, to me, it sounds as if you are very strict, rigid, and structured about your finances, hence the disagreement over the extra few bucks each of you get doing odd jobs.

I was even about to reply and say that while Dave Ramsey’s plan is the IDEAL (and very smart for people with absolutely NO common sense about money), once you have ingrained those new habits, sometimes you can let up on certain things.

For instance, Dave preaches about absolutely no debt for anything. Early on in our marriage, we had to take out a significant loan (for us) for my husband to purchased the farm assets of his retiring aunt and uncle. We struggled and lived off my sole income for 2.5 years to quickly pay back that $90K loan. Now, I’m not saying that was bad, but at the time, we would have loved to have purchased more cattle with that farm income and have paid the debt off over a longer period of time but NO, we had to follow Dave…fast forward 15 years and now we see that if we had bought those cattle back then when the prices were cheap, our net worth would be well over $200,000 more now(probably even more than that!) and our income would be over $100K more a year at today’s market prices! Lesson learned: Dave’s advice really has to be tailored to each individual situation.

Sooooo, while I don’t know the particulars of your financial situation (income amount vs debt amount), I WILL say that you really need to analyze the nature of the debt, your interest rates, etc. and see how much wiggle room you have. I, personally, think that maybe you can let up in some areas (but again, that depends on the nature of the debt, terms, etc.) so that you and your DH can actually enjoy life a little more in the moment and not be so stressed out over where your pin money is going

To be clear, I’m NOT saying give up your debt reduction plan, but I’m saying that maybe there are some amounts that are not as critical that they be paid off right away if the interest rate is not that burdensome.

I agree with much of this.

In terms of debt, DH and I have the house (bought at 3. something interest rate), our cars (again, very low interest rate–like 2.something on mine, and 3. something on his, and mine will be paid off in a couple of months), and my student loans (varying interest rates between 6 and 8%). Per DR, we should be paying off the cars first, as they’re our smallest debts. However, DH, being a finance person, can conservatively invest money we’d have used to make those extra car payments and get a much better rate of return than 2-3%. I am lobbying that once my car is paid off, we put that cash towards the student loans, in particular the one at the highest interest rate because he’s not generally going to get a rate of return that high. We’re still discussing that–he’d rather invest it, I’d rather get out of debt faster. I suspect we may end up splitting the difference: invest half, put the other half towards the loans. On the current track, we’ll be debt-free, mortgage aside, in seven years.

That having been said, we’re no longer at a point financially that we have to worry about many of the things that the OP is concerned over. We have enough in savings to live off of for a couple of years, and DH’s education and job history are such that if he lost or left his current one, he could find another very quickly indeed. Basically, we can take the gamble of investing/saving now because we have the savings and therefore the flexibility to back that gamble. (I say “gamble,” but should clarify that I am not talking about high-risk stocks and such.) It’s something of a different issue.

Also, I’m not knocking DR at all. He’s very helpful in a lot of ways and for a lot of people! I just wanted to offer another perspective.

 

[slh3016]

. Do you have any idea how many farmers go bankrupt and have gone bankrupt over the last 30+ years? Borrowing pretty much ANYTHING for a farm is pretty much the definition of risky.

livinghistoryfarm.org/far…/money_05.html

The 1980s were absolutely catastrophic for farmers carrying a lot of debt.

Remember Farm Aid?

en.wikipedia.org/wiki/Farm_Aid

Yes, that’s mostly for crop farming where price yields can and did fluctuate drastically but we cattle farm which has always been more stable (and thankfully our land is inherited…). THAT being said, Dave’s advice wasn’t the wisest for OUR particular situation where cattle prices remained stable for years and have shot up dramatically in the last few years. We could’ve built our herd in those early years and be sitting VERY pretty today . That’s why my advice to the OP is that she has to assess HER own particular situation to see if following Dave’s advice to a tee is what will work long-term for HER family. That’s why I used our situation as an example that following his principles to a tee in our early married life truly was NOT the wisest thing we ever did

 

[pensmama87]

pensmama,

I agree with you that supplemental income, with very few exceptions, should belong to the family and go into the general fund. I’m a stay at home mom and don’t make any money right now, but I keep the house running and watch the kids and cook the meals. Since we’re a team, the money that either of us (mostly him) earns goes towards whatever’s best for the family.

But what to do about it? What does your husband say when you tell him how frustrated you are with the current arrangement? Does he understand that this is a really big deal for you? If he won’t contribute part or most of that to the general fund, can you ask him to stop earning it and spend more time at home with you and the children?

This is what it comes down to.

I get that I can’t make him do anything, but his attitude is that I am being completely unreasonable, so I need to get over it and let him spend his money. I wanted to see what other couples do to see if I really am being unreasonable or not. I am definitely the “saver” and he is the “spender” in our relationship, but his reaction is that “I don’t spend money frivolously so what’s the problem?” No, compared to how many other Americans live he doesn’t spend money frivolously. But our income doesn’t justify the spending he wants, and definitely can’t handle both of us getting roughly the same amount to spend as we wish (which I think is the way we should do it).

Some of it comes down to the fact that he grew up very comfortably as the only child in a two-income household. I just think he sees the numbers but doesn’t get what they mean, and thinks the money will just “appear” or I’ll find a way to make it work. Which maybe I would, but man, that’s a lot of pressure when I already feel like I’m squeezing nickels to make dollars out of them.

 

[pensmama87]

I’m sorry for the hostile attitude I’ve taken in some of my posts. I’m running on very little sleep and for some reason the kids just KNOW that - isn’t it weird how they know that?

What I probably need to do is pick up the phone and set up an appointment with my counselor that I haven’t seen for a while. It seems the consensus here is that regardless of how the money is spent, the couple should treat it as couple money and mutually agree on how to spend it, save it, etc. I feel that way too, and that our financial situation means we shouldn’t be spending the extra (or at the very least not all of it) as “fun money.” I’m not opposed to spending money for fun if the room in the budget is there, and since I’m not babysitting now, I don’t feel it is.

A poster mentioned that my husband and I have a lot of marital issues and they are right. My husband likely has mild narcissistic personality disorder, and for most of our relationship my ways of handling that were super enabling and were pretty much textbook codependent behavior. So for him I’m changing the rules of the game because I’m saying, “No,” and asking him point-blank to make sacrifices, which he is not used to from me, at all. It’s hard to stay encouraged, and I forget sometimes that this is not how all marriages work.

 

[Xantippe]

Yes, that’s mostly for crop farming where price yields can and did fluctuate drastically but we cattle farm which has always been more stable (and thankfully our land is inherited…). THAT being said, Dave’s advice wasn’t the wisest for OUR particular situation where cattle prices remained stable for years and have shot up dramatically in the last few years. We could’ve built our herd in those early years and be sitting VERY pretty today . That’s why my advice to the OP is that she has to assess HER own particular situation to see if following Dave’s advice to a tee is what will work long-term for HER family. That’s why I used our situation as an example that following his principles to a tee in our early married life truly was NOT the wisest thing we ever did

Well, the problem I have with that is that you could not know the future. The nice thing about DR’s advice is that it works reasonably well in good times or bad, without the need for a crystal ball.

Had you bought on credit, a slightly different sequence of events could have finished you off. For instance, consider the 1986 dairy buyout fiasco and what that did to beef producers:

newsok.com/dairy-buy-out-program-of-1986-a-story-with-two-sides/article/2178360

(I grew up on a cattle ranch in the 1980s and my parents and sister and BIL are ranchers.)

It’s not unlike real estate. On the one hand, if you ignored DR and did highly leveraged real estate deals in 2000, you’d look like a genius in 2005-7. On the other hand, if you did highly leveraged deals in 2005-7, you might have been wiped out in 2008-9. Likewise, I have some family members who got into retail in the early 90s and saw their business grow and grow on credit through the dot com era. However, once the dot com bust happened, the “other people’s money” retail strategy turned on them in a big way, and they were very lucky to survive the dot com bust. Fortunately, by the time of the next bust, my retail relatives had drunk the Dave Ramsey kool aid and they came through the housing bust really well.

 

[Xantippe]

I’m sorry for the hostile attitude I’ve taken in some of my posts. I’m running on very little sleep and for some reason the kids just KNOW that - isn’t it weird how they know that?

What I probably need to do is pick up the phone and set up an appointment with my counselor that I haven’t seen for a while. It seems the consensus here is that regardless of how the money is spent, the couple should treat it as couple money and mutually agree on how to spend it, save it, etc. I feel that way too, and that our financial situation means we shouldn’t be spending the extra (or at the very least not all of it) as “fun money.” I’m not opposed to spending money for fun if the room in the budget is there, and since I’m not babysitting now, I don’t feel it is.

Seeing the counselor sounds good!

I feel you may need to tolerate some inequity in discretionary spending (say 60-40 as opposed to 50-50), but it shouldn’t drift to 75-25 or 80-20.

Can you get him to a counselor or your pastor? Maybe a third party could help him come to grips with the fact that you guys have a growing family, and the more slices there are in the family pie, the smaller slice each of you is going to get. Apologies for the depressing metaphor, but that’s how this works.

Your grocery budget already makes me wince with discomfort. As I’ve mentioned before, you would literally have more wiggle room with your grocery budget if your family were on food stamps. Have you mentioned that to your husband? He may not realize to what a degree you are spinning straw into gold as it is.

Page down a bit here and you’ll see what the maximum food stamp allowances are:

cbpp.org/research/a-quick-guide-to-snap-eligibility-and-benefits

For a family of five (which is what you are about to be), the maximum allowance is $771. That is nearly twice what you are currently spending, and that doesn’t cover the sort of household items that I believe that your $100 a week is covering.

You are living like a much poorer family than you are.

Good luck!

 

[PhiloMed]

I think what works will vary by family and even the personality of the spouses.

From our individual earnings, we have an agreed upon amount that goes for bills, retirement, insurance, mortgage (i.e. the important stuff). Once that is paid for, all the extra money is ours to keep and spend as we wish.

I don’t want to hear about the new gadget he bought and he doesn’t want to hear about the new clothes I bought.

So, to me, if you earned it then it’s yours unless there are household expenses or debts to pay off.

 

[Xantippe]

I think what works will vary by family and even the personality of the spouses.

From our individual earnings, we have an agreed upon amount that goes for bills, retirement, insurance, mortgage (i.e. the important stuff). Once that is paid for, all the extra money is ours to keep and spend as we wish.

I don’t want to hear about the new gadget he bought and he doesn’t want to hear about the new clothes I bought.

So, to me, if you earned it then it’s yours unless there are household expenses or debts to pay off.

I think a couple has to be well above median income (or DINKs) before that’s feasible, but it does seem to be something that works for some people. It wouldn’t work for a single income family, for obvious reasons–the SAH parent wouldn’t get any discretionary spending, which would be a big bummer for them.

For a lot of families, even carving out $100 a month total for “fun” money is a pretty big challenge.

 

[slh3016]

Well, the problem I have with that is that you could not know the future. The nice thing about DR’s advice is that it works reasonably well in good times or bad, without the need for a crystal ball.

Had you bought on credit, a slightly different sequence of events could have finished you off. For instance, consider the 1986 dairy buyout fiasco and what that did to beef producers:

newsok.com/dairy-buy-out-program-of-1986-a-story-with-two-sides/article/2178360

(I grew up on a cattle ranch in the 1980s and my parents and sister and BIL are ranchers.)

It’s not unlike real estate. On the one hand, if you ignored DR and did highly leveraged real estate deals in 2000, you’d look like a genius in 2005-7. On the other hand, if you did highly leveraged deals in 2005-7, you might have been wiped out in 2008-9. Likewise, I have some family members who got into retail in the early 90s and saw their business grow and grow on credit through the dot com era. However, once the dot com bust happened, the “other people’s money” retail strategy turned on them in a big way, and they were very lucky to survive the dot com bust. Fortunately, by the time of the next bust, my retail relatives had drunk the Dave Ramsey kool aid and they came through the housing bust really well.

Maybe, maybe not. We had a lot of equity going in so we COULD have survived even a significant amount of downturn and not lost everything. We never would have been “highly leveraged” (at most 25% leveraged) . Again, I’m saying for OUR circumstances, DR’s advice was not wise. That’s the point, it’s all relative to each person’s own situation.

 

[nodito]

I just think he sees the numbers but doesn’t get what they mean, and thinks the money will just “appear” or I’ll find a way to make it work.

Well, if this is what he says he’d like, one approach may be to take him at his word. Go ahead and cancel that cable and he can use his fun extra money to get it back on.

 

[Xantippe]

Well, if this is what he says he’d like, one approach may be to take him at his word. Go ahead and cancel that cable and he can use his fun extra money to get it back on.

Oooh.

I can’t actually recommend that, but it is an option.

Nice cable + beer + other stuff adds up to a lot a month, in the environment the OP is describing. That’s somewhere between 1-2 weeks of groceries a month, right?

That does seem out of balance. Maybe it needs to be beer OR cable, but not beer AND cable, but I wouldn’t try to do that unilaterally.

Maybe take your husband to a counselor or a pastor to hash this out?

I suspect that your husband is thinking that he’ll make more money soon, you’ll go back to work, etc. But the thing is, your kid expenses are only going to be going up from here on out–at least until they are of working age themselves. Even just incidental public school expenses can be a killer (a little for a field trip, a little for a Christmas gift for each teacher, an end of year gift for each teacher, a play costume, materials for a project, your contribution to the Thanksgiving party, Christmas party, Valentine’s party, end of year party, school pictures, year book, school fundraising, etc).

 

[pensmama87]

Well, if this is what he says he’d like, one approach may be to take him at his word. Go ahead and cancel that cable and he can use his fun extra money to get it back on.

Ha! I have been tempted, but unfortunately we’re on contract still so I have no interest in an early termination fee (and it is high with current company).

Good news: after I ugly cried in front of DH last night for how much this was stressing me out (I didn’t want to cry but gah pregnancy hormones), he took a look at the budget spreadsheet and noted that if our projections for utility bills were on, we’d end up about $250 short by the end of the year (meaning I’d have to not put that money into sink funds in order to cover necessary expenses). He got an invitation to a study related to the one he’s been doing that pays $300. (That invite spurred this whole thread because I asked him when he opened it what we should do with the money and he said keep it for things he wanted, which stung.)

But he told me today that he’ll put it in the household budget so we can keep allocating our money the way we have been. So, yay. Looking at the real numbers helped after all.

 

[Xantippe]

Ha! I have been tempted, but unfortunately we’re on contract still so I have no interest in an early termination fee (and it is high with current company).

Good news: after I ugly cried in front of DH last night for how much this was stressing me out (I didn’t want to cry but gah pregnancy hormones), he took a look at the budget spreadsheet and noted that if our projections for utility bills were on, we’d end up about $250 short by the end of the year (meaning I’d have to not put that money into sink funds in order to cover necessary expenses). He got an invitation to a study related to the one he’s been doing that pays $300. (That invite spurred this whole thread because I asked him when he opened it what we should do with the money and he said keep it for things he wanted, which stung.)

But he told me today that he’ll put it in the household budget so we can keep allocating our money the way we have been. So, yay. Looking at the real numbers helped after all.

Yay!

 

[marymary1975]

Ha! I have been tempted, but unfortunately we’re on contract still so I have no interest in an early termination fee (and it is high with current company).

Good news: after I ugly cried in front of DH last night for how much this was stressing me out (I didn’t want to cry but gah pregnancy hormones), he took a look at the budget spreadsheet and noted that if our projections for utility bills were on, we’d end up about $250 short by the end of the year (meaning I’d have to not put that money into sink funds in order to cover necessary expenses). He got an invitation to a study related to the one he’s been doing that pays $300. (That invite spurred this whole thread because I asked him when he opened it what we should do with the money and he said keep it for things he wanted, which stung.)

But he told me today that he’ll put it in the household budget so we can keep allocating our money the way we have been. So, yay. Looking at the real numbers helped after all.

yeeees great to hear that it got resolved! Wonderful news looking at numbers always helps

 

[pensmama87]

Seeing the counselor sounds good!

I feel you may need to tolerate some inequity in discretionary spending (say 60-40 as opposed to 50-50), but it shouldn’t drift to 75-25 or 80-20.

Can you get him to a counselor or your pastor? Maybe a third party could help him come to grips with the fact that you guys have a growing family, and the more slices there are in the family pie, the smaller slice each of you is going to get. Apologies for the depressing metaphor, but that’s how this works.

Your grocery budget already makes me wince with discomfort. As I’ve mentioned before, you would literally have more wiggle room with your grocery budget if your family were on food stamps. Have you mentioned that to your husband? He may not realize to what a degree you are spinning straw into gold as it is.

Page down a bit here and you’ll see what the maximum food stamp allowances are:

cbpp.org/research/a-quick-guide-to-snap-eligibility-and-benefits

For a family of five (which is what you are about to be), the maximum allowance is $771. That is nearly twice what you are currently spending, and that doesn’t cover the sort of household items that I believe that your $100 a week is covering.

You are living like a much poorer family than you are.

Good luck!

I have known this for a while, and I know that there are aspects of our circumstances that mean I can stretch food dollars very well (I stay at home so I generally have time to cook, as well as shop, including that I have reliable transportation and lots of discount stores near me, plus I coupon), but there is a element of “how on earth could I even spend that much money just on food?” (I know I could with more people, but the amount for our family as is seems like…whoa, just a ton of money.)

I have a feeling that when our debt is paid off I am going to feel super, super rich. Our minimum debt payments every month are already over what we pay for groceries. But I don’t mind it and we definitely don’t starve. Maybe I’ll get to use bigger portions of meat, or buy steak or seafood once in a while, but really, we eat just fine.

(Hanging out on couponing websites has distorted my perception some, too, I’m sure - there are families of five, or six, or seven, who manage to feed everybody on $60 or $70 a week, but it’s usually because they know someone who gives them free crates of produce from the farmer’s market or something, or they grow most of their own food. Which is appealing to me, but not happening while we only have littles.)

 

[Xantippe]

I have a feeling that when our debt is paid off I am going to feel super, super rich.

I hope so!

(Hanging out on couponing websites has distorted my perception some, too, I’m sure - there are families of five, or six, or seven, who manage to feed everybody on $60 or $70 a week, but it’s usually because they know someone who gives them free crates of produce from the farmer’s market or something, or they grow most of their own food. Which is appealing to me, but not happening while we only have littles.)

Yeah…

I remember when I was a kid, my grandparents’ freezer was absolutely chock full of hundreds of dollars worth of beef.

But, they were ranchers and had sixty or so head of mama cows plus the babies and used to occasionally have one butchered locally, so that’s how that worked.

 

[pnewton]

But he told me today that he’ll put it in the household budget so we can keep allocating our money the way we have been. So, yay. Looking at the real numbers helped after all.

Glad your problem is solved for now. I am late, but here is what I do.

All money is everyone’s money, at least in theory. As a practical matter, I pocket my extra, a couple of hundred a month, but that is spent mostly for household stuff, or going to eat as a family. It is my money, to carry, but is ours. I have no problem with my wife taking some to eat with co-workers, give to some fund drive or other such purpose. It is all still ours. This works because my wife is the fiscally responsible one.

I say this because circumstances will change. If one is paying off debt, then the day will come it will be paid, money may be much freer one day, so principles can apply to the struggling, the well-heeled and all in between.