When a Saver and a Spender Say “I Do”

MSN Money has a wonderful piece on how a frugalist and a spendthrift can get married. Of course, the frugalist helps the spendthrift spend less and save more. An excerpt:

When we got married, my savings became our savings, and his debt became our debt. There was no prenuptial agreement or legal contract stating what was his and hers. However, I made it a point not to pay off his debt. He needed to learn a healthier philosophy on money, and often that requires some tough love. Not only did this help improve our finances, we both admit that these lessons also helped our marriage.

Understanding Sacrifice

We were engaged for about eight months before we got married. My husband graduated college before me and was the first to be out on his own. He landed a great job and began aggressively chipping away at his debt.

He sold his first love (and by “first love” I mean his truck) which he was making payments on, and made a large dent in his credit card debt. He bought a 1995 Saab for $500 to get from point A to B (this change of vehicles also helped his gas bill).

He rented a one bedroom apartment, ate most meals at home, and took his lunch to work. We didn’t deprive ourselves of going out with friends, but we were very careful with how much we spent. We would order water instead of cokes, skip the appetizer and dessert, and go home with enough leftovers to make another meal that night.

For wedding gifts, we didn’t ask for fancy china or stemware. Instead, we used it as an opportunity to get the necessities we would need to be on our own: trash cans, Tupperware, towels, pots and pans. We saved a lot of money this way, and kept working at the debt.

By the time we got married, my husband had knocked his debt by half. Every paycheck he received from work went straight to rent, food, and bills. Although this was tough for him, I kept reminding him how nice it would be to live debt free.

After learning how much sacrifice it took to get out of debt, he realized he didn’t want to ever use a credit card again — something he might not have learned had we taken my savings and paid it off the easy way.

Accumulating Wealth

Once we got married, I joined in the race to pay off the cards. This was now our debt, and just as much my responsibility to help. However, at the same time I was doing what I love to do most — save, save, save!

It’s not enough to just pay off debt; you must also accumulate wealth. This is where I differ from much of the financial advice you hear today that says you must pay off every dime of your debt before you start saving for yourself.

You must have some savings and this is why: if you get out of debt, but have no savings to fall back on, it is likely you could end up in the same position of borrowing money to make ends meet. Yes, you now understand the sacrifices involved, but needs are needs. And if you can’t pay the rent, you’ll start to remember how easy it was to swipe a card and forget about it.

It is also a sense of accomplishment to deal with positive numbers. During the time you are working on your debt, you see paycheck after paycheck go toward items and things you bought in the past—maybe even years ago — and all the interest those items have accumulated over the years. You are spending all this money, and have nothing tangible to show for it.

When you save, you are dealing with the future—not the past. Saving is an active way to remind yourself of the financial goals you are reaching for in your future. It feels good to watch your money grow in a positive direction.

This is why I suggest that even as you are paying off debt, you are also learning to save. I don’t care if it is $10 a month, $50 a month, or $100 a month, you need to get in the habit of making that a priority. Then, when all the debt is gone, you not only have a zero debt balance, but you also have a positive cash balance from your savings. You then have the strength to continue your commitment to savings, and increase your contributions to the maximum.

During our first year of marriage even as we worked away at our debt, we saved. We each maxed out our Roth IRAs and contributed enough to our employer sponsored retirement plans to get the match. We also began saving for a house, which we bought eight months into our marriage.

I have to say that I am eternally grateful to my wife who helped me to change from a spendthrift to a frugalist. It was her discipline that made me change my ways and together we are building for a better future.

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