Laundry on line back of cottage of "permanent" farm worker at the FSA (Farm Security Administration) labor camp. Caldwell, Idaho. Lee, Russell, 1903- photographer.
This post is the first in a series featuring fictional characters facing real-life financial organizing challenges. Today’s episode features the madly-in-love couple Holly and Jack.
Holly and Jack dated for one year before moving in together and now share a one-bedroom apartment in San Francisco. They are both 34 years old. Jack is a freelance photographer who specializes in urban-edgy professional head shots, and Holly is a successful sole-proprietor CPA specializing in small business valuations. Holly has been a frugal saver all of her life and hopes to own a home one day. She recently wrote a final check to payoff her student loan debt. Jack doesn’t like making plans further than one year out into the future. He has no savings besides a small cash emergency fund, $25,000 credit card debt, and $75,000 student loan debt for his MFA.
Holly’s net income is twice that of Jack’s, so the couple agreed that Jack should contribute 50% less than Holly to their shared household expenses. Holly offered and the couple feel comfortable with Holly also covering 75% of other discretionary expenses such as dining out, weekend get-aways and travel.
Holly saves most of her remaining discretionary net income. Jack makes his student loan payment and credit card minimum payments, but spends most of the rest of his discretionary income on clothing and dining out, sometimes with Holly and sometimes alone with friends or family. Holly is always invited but sometimes declines going out with Jack and his friends to stay on track with her budget.
Catching up on laundry, Holly feels through the pockets of a pair of Jack’s jeans and discovers a receipt for $183.20 for a pair of boots from Stompers Boots. Holly is annoyed, but wants to avoid a conflict.
A recent post How much have you spent on clothing this year? at Budgets Are $exy got me thinking about a related question: have you talked with your spouse or significant other about what you’ve spent on clothing this year? Or about how much you’ve spent on gifts, dining out on your own with friends and family, or any number of other expenses that affect your shared financial picture as a couple?
Couples who share finances need to air their dirty laundry to each other about their personal spending habits.
Holly is annoyed because the boots purchase signals a difference in their financial goals. She is asking herself “why am I subsidizing 75% of our lifestyle so that Jack has extra money to buy high-end boots?” She would prefer to set aside more of her own earnings towards the future goal of buying a home.
But she offered to pay 75% of their expenses and doesn’t want to micromanage Jack’s personal spending. She doesn’t say anything, but wonders about Jack as a potential future life partner. Meanwhile Jack has no clue what happened.
Conflict is avoided for the moment, but the stage is set for a future argument.
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This is an interesting fictional couple concept. I imagine many real world couples face similar challenges when trying to reconcile their differing views on how to manage/save/spend money.
If these folks were real, I would be tempted to give them Stephanie’s business card.
Hi Jason B.
Good point. As an attorney specializing in family law, Stephanie could help Holly & Jack draft a clear co-habitation agreement. However, as I see it, the difficulty they face as a couple is a fundamental misalignment of goals. A co-habitation agreement won’t solve this.
I know a few couples who are like this. I once had a friend who would ‘secretly’ shop and not tell her husband. Then, when he would see a new dress or top and ask about it, she would tell him that she’d had it for years.
Though your characters are fictional, they are based on reality. I can’t wait for the next post.