Tuesday, April 1, 2008

Money Talk Tuesday

Who Have You Hired To Manage Your Money?

When Mr F and I got married I didn't really have any idea how much money he made. I was under the impression that it was enough. When we bought our house a few months before our wedding we bought a house that Mr F said he would be able to pay the mortgage and utilities of with his income, knowing that I would not be working once we had kids. When we moved to Ann Arbor Mr F put all the utilities in his name and paid all the household bills. I stopped working but still paid my own credit card bills and medical bills from some savings I had. I always paid my bills in full. I just assumed Mr F did too. We didn't talk about it. Mr F was running his own business from home and he had all those bills to deal with so it just seemed to make sense that he would just throw the home bills in with that too.

Mr F is 8 years older than I am. He had been running a *successful* business for years. He had been living on his own for years. I had only been out of grad school for a couple of years. He made a significant amount more than I did as a social worker. It just seemed natural to let Mr F take over all the bills. He was older, more successful, independent, and he was the man. He was the natural choice... right? It never occurred to me to ask how he paid his bills... you know... on time?... in full?

It took me a few years to realize that maybe Mr F wasn't the best choice. Nothing was said but I was starting to pick up on a *stressed* vibe from Mr F. Still I didn't take over the finances. At this point I felt overwhelmed and like I wouldn't be able to figure it out. To be honest I just didn't want to pay the bills... does anyone? By this point Mr F was now hiding things and becoming defensive and more more reluctant to turn over the finances. Red flag anyone?

A couple years later and Mr F (with the help and encouragement of his fantastic therapist) was finally ready to reveal the truth. Mr F had made some pretty big financial mistakes that resulted in something close to 35K in avoidable debt. Why do I say avoidable? Well because it could have been prevented. Of course had I known what we could and couldn't afford I might have made different choices... but more importantly because most of the debt with incurred simply because Mr F was just bad at paying bills. He didn't pay attention and paid them late. He racked up finance fees and bounced checks. We filed our taxes but he didn't send the payment. Why did he do all these things? I'll never really know. He felt overwhelmed with the burden of running a business and the house for one. And he has ADD. And he kept thinking he'd get it all under control next month... which just kept getting pushed to the next month, year, years... you get the picture.

I was shocked by Mr F's admission. I was dumbfounded that he just hadn't told me after the first year managing our household expenses. I was sick to my stomach and furious both with him and with myself. Why hadn't I stepped in? Why didn't I ask more questions? Why was I so comfortable taking a back seat? Within days we had acquired a loan so we could pay off all the miscellaneous outstanding debts. I took away all of Mr F's credit cards. And I took over paying all the bills. All of them. In the last few years I have never once bounced a check, or racked up any finance fees. It took us a couple of years but we were able to payoff the loan in full (while paying less each month than Mr F had been trying to manage the debt).

The lesson we learned from this is that the person who manages your family's money is performing a major job and you need to hire the right partner to do that job. When I think about Mr F's skills and his deficits it is almost laughable that we hired him for this position. I blame myself as much as I blame him for the debt he acquired. So my question to you is who pays your bills and why? Did you consciously *hire* one of you over the other or was it a more passive decision?

I've put a poll up in my sidebar today. Please, please, take a few seconds to answer it.
Pop on over to Smoochiefrog's Money Monday post. This is her third post in her debt series documenting her journey back from bankruptcy.


katieo said...

I do it in our household. It's funny, my husband and I always joke that we never had any money issues until we got married. For some reason, when we were both single, the money was just there (more than it is now anyway). He started to for probably the same reasons Mr. F did, I don't know, it just seemed natural. Like Mr. F, at the time he ran his own business, so I guess I just assumed he knew what the best financial choices would be (I'm a musician, not exactly the picture of sound financial judgement) That, and I'm naturally lazy, so it's not like I'm going to be jumping up and down for the job.
Well, he doesn't exactly excel at juggling the complex world that is our finances. So I do it (because I DO EXCEL at it), and update him all the time. We both know our boundaries and have the same goals.
I actually wish someone would've gotten us a "money" book for a wedding gift. We're doing great now, but it would've been really nice to have a plan in place right out of the gate.

Andrea said...

Quick question how do you tell somebody your just no good at thimy husband is the worst he has good intentions but for goodnesss sake he likes to spend money, I really just want to give him an allowance and do it all myself but then I dont I do not like to spend money unless its on the babies.
I wish I could just give all our money to somebody and say give us an allowance let me know what I should spend on this and that and be done with it. Ugh it sucks being a grown up. This is it though we are expecting #2 this summer so we discussed this exact topic last night it time to get it all under control.

Julie said...

I have always done it...I took care of all the bills from when we first moved in together. I am good at it...I will cubby money away within our accounts to cover upcoming bigger expenses and such. BUT I am the one who racked up our credit card.

My Dad went bankrupt right after I got out of college...we lost our childhood home to foreclosure. My parents were quite wealthy initially...they actually lost like 4 homes because we had 3 other vacation homes. I can't even believe it now that I am older. That was 20 years ago. It was during the last recession in the early 90's and my father had his own consulting business in banking and real estate. When everything crashed and banks started to fold, so did my parents finances. Everything. I have lived on both sides of path...growing up with wealthy parents and then having parents who had to get food stamps.What it taught me is that nothing is stable, nothing is permanent and at least for me, we are always one paycheck or emergency from financial disaster.

I am never late with a payment and always pay in full. Well, except when I started to use a credit card a couple of years ago. I think I was depressed and I would spend money on just stuff. Nothing fancy, nothing that I could say "see, that is where the money went." Just stuff. I was living out in the country after living in the city for 15 years, at home with babies, not working and I do believe a bit postpartum depressed. I gained a bunch of weight AFTER the kids were born and accrued sizeable credit card debt. I am now trying to fix all that. We actually took out a loan from our 401k to pay for the credit card and pay ourselves back with interest each month. I now carry nothing on the credit card and I won't use it. There is something about a credit card with a zero balance that makes it harder to just use for frivolous purchases. It was much easier to use it for everything when it had a running balance.

Money issues used to really stress me out. Especially things like "emergency funds" (which we do not have) and college for our kids. But you know, we do the best we can and everything is so expensive. We will manage. We are healthy and love each other. That is the most important thing. I'll just keep repeating that as all of my much more affluent friends go on multiple vacations and have babysitters and all that lovely stuff. Truly, we are blessed.

Julie said...

Sweet peas, my post is so long. Sorry I must have thought this was my freaking blog or something:)

P.O.M. said...

This is a good topic too. Being single, I have always handled my own finances. Not always a good thing, but I've learned from my mistakes and am very comfortable now.

As a matter of fact, this will probably be an issue if/when I get married (HA, not holdin' my breath over here) As I do not want to relinquish the control (or the money). Unless, of course I marry a very wealthy man, then he can do it all! (once again, not holding my breath)

Even then, I will always have "my account" just in case. Is that a bad thing?

Mrs Furious said...

Sorry my car broke down so I've been stranded in the preschool parking lot all afternoon! Good times.

"It was much easier to use it for everything when it had a running balance. "
I think that is a very important point. I think that is what happens for a lot of people. Once you've got a balance you can no longer tell which items are putting you over.

"That, and I'm naturally lazy, so it's not like I'm going to be jumping up and down for the job. "
LOL... I can't relate to that at all ;)

It is not easy to change rolls. We let it go on for about 5 years until something had to be done about it!
Now I see things in the house as "who would I hire for the job". You know like you are both candidates for each position. Looking at it that way it was so obvious that I wouldn't have hired him... and yet by not ever doing anything I had.
Maybe you could approach it that way. "Hey we're having another kid and I think we'll be more stressed lets write down all the jobs and see which one of us we'd hire for each one."
I'm the better cook so that is my job. Mr F isn't afraid of the lawnmower so that is his job.

Mrs Furious said...

I've got my own account. Not a bad thing.
But Mr F is not allowed to have his own account ;)

Heather said...

I'm starting to wonder if Pete is like Mr F (no offense Mr F). Pete is amazing at some things; methinks money management is not one of them. He made a suggestion last night that I saw as his open-ness to letting me take things over (which makes sense since I'm the primary income right now). Rather than try to do one or two things here or there, I suggested we look at the Debt Diet thing on Oprah.com, and create a strategy. He also has poverty-striken mentality, which I liken to famine-brain mentality. He thinks he's completely poor, so he refuses to even consider savings or a long-term plan. My goal is to look at our spending, look at our available income, and to have him socking away at least something into savings every month (preferably in an interest-bearing account).

This was not what I thought this would be like, fwiw. I really wanted to marry someone who knew this stuff, not someone more in the dark than me (which is saying something!).

But oh well. I'll master this just like everything else, as I am a badass.

Mrs Furious said...

"But oh well. I'll master this just like everything else, as I am a badass."

The thing with Mr F is that it isn't like he is going to learn this or even wants to. When we talk about it I feel like I'm talking into a vacuum. It is all me or nothing. And I know that is just the way it will be. If I hadn't intervened Mr F would be one of those people who goes on Oprah and has 150K in debt or something. It is like his brain can't translate this info into a language he can hear let alone understand. (not that he is an idiot)

Heather said...

Ahem, could you kindly write me back via email!? Pretty please?


Fudgy the Whale

Mrs Furious said...

Argh my email is slow! I'm trying...

Sandcastle Momma said...

I've always handled our money and he used to complain if he thought we didn't have enough - like maybe I was spending too much. I got mad one day, threw everything on his desk and told him to do it. Two weeks later ALL of our utilities were shut off because he didn't want to spend the money - he wanted it in our account so we wouldn't be broke. After realizing that he's a financial idiot I took the bills back over. He's never said another word about it and I handle it all. I swear if he didn't have me the man would be making a ton of money but living under a bridge LOL

Mrs Furious said...

Sandcastle Momma,
oh that is hilarious!

angie said...

I mostly pay all the bills. Which is pretty funny since my husband has an MBA in finance from Columbia. My husband pays his credit cards, but I pay all the other bills. We actually have separate bank accounts and since I make significantly more I pay all the bills. Our separate bank accounts are so we can have a local bank (mine) and we can have his military account where we get all of our car/home insurance and our mortgage (my husband was an officer in the army for four years). So it's not really that we have separate accounts where we each pay half the bills etc. Then what I have left over I give to him to pay extra on our mortgage and to save for things like our property taxes. We have budget day at the end of the month where we each tell the other how much we have left over from our respective bills and make plans on what to do with any left over money. We also do a daily budget tracker where we literally enter into an excel spreadsheet every single dollar we spend. So we know exactly where our money goes and we know whether we have spent under or over our daily/weekly/month limit. We know exactly how much discretionary money we have to spend per month. By discretionary I mean anything that is not a regular bill like cable, phone etc. So food, diapers, starbucks are all discretionary spending. This helps keep us on track.

We have 1 car payment and our mortgage. But our student loans are paid off and we carry no balances on credit cards. Much of this is due to our really watching our budget. Though, we like to spend money, don't get me wrong (we travel A LOT).

Just my 2 cents (or actually 2 hours given the length of this post. I really need to get my own blog :-)

Kid Art said...

In our house we now split the job, but for many years the ongoing bill payment/maintenance was all me. We took a look at income and expenses and set the budget together though.

From day one up through having kid #2 we used this great Excel spreadsheet that my husband created. It is basically a 1 pager snapshot of an entire year, includes actuals and budgets - so you can always forecast cash flow throughout the year. Unfortunately it is a very manual, hands on document - all income and expenses have to be entered by hand - so it just hasn't been practical to use it in the past few years (2 jobs, 2 kids, 1 dog ACK!).

Currently we have a monthly budget but the expense tracking side of things is really lacking - neither one of us has as much time to devote to this aspect of life as I would like.

And Mrs. F I thought of you last night for the space of time where Turbo Tax claimed we owed $10K in taxes. I now have it down to $4K... and still working on business expenses. Seriously insane! Marriage penalty anyone??

Deb said...

I used to do it, but now Hubby does it. Both of us are equally good at it, and to be honest, equally bad at it -- we just have different deficits. I pay bills at the last possible moment, which drives Hubby insane. (I'm never late, I just don't like coughing up money before I must.) He pays bills the moment they hit the doorway, but he has made some royal judgement errors with investments (whereas I am ultra-conservative about investing and would probably lose money just by sitting on it).

I think we have one of those rare marriages where money isn't a major issue between us and never really has been (we have plenty of others to fill the void). But I've been in Mr. F's shoes when I was a single gal, and it's not fun.

Deb said...

BTW, I love what you said about looking at every task in the house as a potential job opportunity and using that perspective to determine who handles it. I will adopt that immediately, because I think it will make me resent my load a little less. After all, I really am the most qualified for laundry and dishes -- he sucks at those things, while I am a goddess. Hmmm... I'll be filled with less resentment but I may become more full of myself. Must weigh this one carefully...

Mrs Furious said...

I took a unisom and am not able to be coherent.
I'll be back in the AM.

Haley said...

Great topic! As a single gal I'm in charge of it all, and there is great comfort in that -- control is a wonderful thing.

After watching enough Oprah over the years I am bound and determined that no marrying will occur without a bit of financial counseling first(or at the very least a purposeful, open, and direct discussion of finances). Screw romance on this front, I want things written down and agreed upon.

And a related comment, but sort of lateral...One thing that I heard Suzy Orman say that has stuck with me, is that if you and your partner make significantly different salaries, it's smart to have a joint account where you both contribute equal proportions of your income (60% or whatever) and then separate accounts for the rest. I love the balance of partnership and independence inherent to this plan, and the fact that it should (SHOULD) keep feelings of inequity from popping up. But who knows, as I haven't tested this yet...

Gigs said...

I think our husbands sound the same in a lot of behaviors. I did have the heads up on mine's financial weaknesses, as I had to loan him money to pay his taxes when we were still dating. After we got married, we decided to keep separate bank accounts, mainly because I didn't feel safe giving him access to what I worked to earn and keep. Sounds terrible, right? But 15 years later, it is still working for us. We spilt our bills, and share only the mortgage. It gives us both a smaller chunk of bills to manage. Over the course of our marriage, I have taken and cut up all of his credit cards and have tried to teach him to live within our moderate means. (He never paid those bills off in full and it made me CRAZY. This is something I always do without question.) When I found the secretively acquired Lowes card, believe me, there was hell to pay. However, in his defense, I truly am not any better at understanding money management than he is. My mom is a financial wiz (not sure why - she was a librarian by trade...) and I totally relied on her. She was like a free financial planner to us for years. Because truthfully, neither one of us is right for this job. We both lack interest, understanding and savvy.

I had been blessed to grow up in a family where money was handled very wisely. It is why my dad was able to retire at 55 and my parents now travel the United States in their motorhome building homes for Habitat for Humanity. No income worries at all. I come from a mentality of not worrying about money, because there has always been (and in my mind) always will be enough. But I am definitely a saver. Maybe all those years watching my parents be frugal did teach me something of value!

As far as the best one for the job... I really think I am the best one for almost everything, so I have to work on compromise and adjusting my expectations on a lot of things or I will drive myself crazy trying to do it all "the right way." This is an even bigger issue than money at our house...

Mrs Furious said...

"I really think I am the best one for almost everything"
LOL... yes I can relate to that ;)
There I things that I have just decided not to learn anything about that way they are not my jobs... mulch, the car, the trash.

Mrs Furious said...

Oh Gigs...
and the Lowes card.... YES we had a little issue with that! I had to threaten to take away his library card for crying out loud! We were practically keeping the library in business with all his late fees.

Mrs Furious said...

4K for taxes?!? I wish....

Oh you make Tony sound like the man in this comment so I hope he appreciates it ;)

" I think it will make me resent my load a little less."
It does... and I'm the queen of resentment so I should know ;)
It also helps me to realize that he does do things around the house that I don't want to do.

I love to love/hate/love that Suze Orman.

angie said...

I should say that when I told tony what i wrote he said "Yes, you pay the bills, but I MANAGE the money. Which means he creates all the spreadsheets, figures out how we should spend the extra money, creates the spreadsheet to make sure we are saving for car/home insurance and property taxes. So he does contribute at a more intellectual level. But I pay the bills :-)

Mrs Furious said...

I meant in the officer & and Columbia way. But yeah I guess you did kind of gloss over his "management" role ;)

Robin said...

Hey Mrs. F -
I just wanted to thank you for bringing up all this financial stuff. We do ok, but we always seem to spend a little more than we have coming in. I just spent the last few hours re-doing our budget and have come up with something that I think will work. We are putting more in savings, and are going to go cash only for groceries, dining out and extra spending. I really think this will help us to really think about spending the money when we know if it runs out, it will be nothing but beans for the rest of the month.

Anyway, the finances are something I knew I needed to really delve into, but I just didn't have the motivation. Thanks again for bringing it up. I feel so much lighter with a new plan. :)

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