My Wife's Spending is out of Control

Get Out of Debt Blog – Month 3

Get out of Debt Blog Month 3If you haven’t been following my quest to get out of a half million dollars in debt, I suggest you begin with My Journey to Payoff half a million in debt or check the Get out of Debt Blog master page.

Going through the numbers for July 2009 made me sick to my stomach. I felt nauseous and angry that I cannot get my wife to concede that we need to attack this debt before it consumes us. As I said before, I was motivated by Dave Ramsey’s Total Money Makeover Book, but I didn’t want to get as intense as he suggests. We don’t make an exorbitant amount of money, but significantly more than the average Joe. In this I feel we don’t have to pinch nickels and dimes, but rather focus on not spending money on unnecessary items. For example, we can get away with not clipping coupons for hours to save $10 a week. That is a drop in the bucket. What we need to do is stop taking expensive family trips, buying new everythings, and refrain from using credit.

I can’t get my wife on board as she takes the position that we have plenty of money, and that it’s summer and we should take trips while it’s nice. We’ve had desperate times in the past, before our careers took off, which sort of skews her impression of our current circumstances. Yes, much more money is coming in than ever before, but much more is going out as well. Dave Ramsey claims he has been a millionaire twice. I try and convince her that having a decent income, even being a millionaire, does not mean we can spend at leisure. Instead we should be cautious and put ourselves in a good position should the unthinkable happen. Our jobs are pretty secure, but other circumstances could arise where one of us is out of work. If that happens, our expenses don’t go away, but our income plummets. Bankruptcy would be an option.

It is hard for me to negotiate with her as she actually brings in more each month than I. Who am I to tell her how to spend the money? As you’ll notice below, she went out of control this month and didn’t really consult me on many of these purchases until after the fact. To her many things were necessary and didn’t require my consent. If there was a benchmark for incidental spending, we’d be in the 99th percentile. I have since dug up my copy of “The Total Money Makeover” and have requested she read the book cover to cover before purchasing anything else. Hopefully, Dave Ramsey’s words and the stories therein can put my wife in the frame of mind that I am.

I hope she changes her ways because a dark cloud with our investment property has been looming overhead in August. So far I’m evicting a tenant for non payment of rent, another is leaving, there are rotten boards that need replacing, two doors and door frames have been damaged, and an electrical fire broke out. Needless to say, our rental income is about to drop by a couple thousand, we’ll need to put a few thousand into the building for repairs, and an eviction proceeding is always pricey.

Get out of Debt Goal Reminders

Get out of debt goalsGoal 1: Achieve a Net Worth of $0 by paying down debt and increasing savings and investments.

Goal 2: Have $0, and I mean ZERO debt and liabilities.

Goal 3: Increase my net worth to $500,000.  Basically, turn half a million in debt to half a million in assets…a daunting task to say the least.

Get out of Debt Status – Month 3

Financial Status for the end of July:

  DEBT EQUITY Asset Value
Property $274,883 $320,000 $45,117
  Remarks: This is our home plus our 4 unit rental property.  I took the value of the properties from Zillow to determine equity and subtracted the remaining balances on the mortgages to figure the Asset Value.
Equity-Line $39,450 $0 -$39,450
  Remarks: Took this line on our primary residence to fund the down payment on an investment property.
Credit-Cards $4,593 $0 -$4,593
  Remarks: After paying down $11,000 last month, I’m so angry that we actually accumulated more Credit Card debt.  My goal at the end of my last post was to have this paid off this month.
School-Loans $155,015 $0 -$155,015
  Remarks: Yup, it's a lot.  Between the both of us there are 13 years of schooling with no parental help. We'll probably tackle these last as the interest rates are very nice.
Vehicles $32,750 $27,750 -$5,000
  Remarks: I took the trade in values for both vehicles from Kelley Blue Book to determine equity and subtracted the remaining balances on the loans to figure the Asset Value.  I like the idea of one commenter last month on paying off one of our vehicles and freeing up that monthly payment.
401Ks $0 $45,239 $45,239
IRAs $0 $7,052 $7,052
Investments $0 $7,000 $7,000
  Remarks: This is a gamble on an IPO that still hasn't panned out.
Savings   $11,178 $11,178
529   $1,748  
  Remarks: I can't let my kids have the same burden as my wife and I with school loans.  Our goal is to pay for at least half of their college education...which is not included as assets.
Totals $506,691 $418,219 NetWorth: -$88,472
Monthly Changes $1,672 $2,027 NetGain: $3,699

My Get out of Debt Monthly Budget

I’ve tracked our income and expenses for the month of July.  This month I should get a real good idea on what our average expenditures are. 

  Income This Month Over/Under
Salaries and rental income $18,179 $19,944 +$1,765
  Remarks: A tenant is playing catchup with rent giving us a bit more income this month.  Also a bit of overtime.
Other      
Total: $19,944    
    
  Deductions    
Taxes $3,841  $3,841  -
401K $1,240  $1,240  -
  Remarks: We could put this toward debt, but I need to match company contributions and the investment market is just so under valued at the moment.  I hope I'm making the right choice.
Life-Ins $48  $48  -
Health-Ins $465  $465  -
Dental-Ins $30  $30  -
529 $100  $100  -
Total: $5,724
Remaining Income: $14,220
  Long Term Debt    
Mortgages $2,737  $2,800  +$63
Equity-Line $200 (min)  $0  -$200
  Remarks: Nothing paid this month.
Vehicles $821  $821  -
School-Loans $1,286  $1,286  -
Total: $4,907 Remaining Income: $9,313
 
  Expenses    
Insurance $415  $316  -$99
Day Care $450  $590  +$140
  Remarks: Our day care situation has changed this month and will again next month, I should have a new budget for this by the end of September.
Gas $500  $345  -$155
Food + $1,100  $1,620  +$520
  Remarks: The + means anything you would buy at a retailer, such as a shovel, toilet paper, lawn bags, clothing, etc.  A few new wardrobes purchased.  
Electricity $450  $253  -$197
Oil $800  $0  -$800
  Remarks: We ended up on a payment plan last year and when the price of Oil dropped significantly, we had a balance of a grand or so.  Still haven’t needed to pay anything additional for oil yet. 
Water&Sewer $255  $870  +615
  Remarks: This is a quarterly charge and should even out of the year. 
Trash $20  $20  -
Internet/Tele $80  $85  +$5
Cells $90  $93  +$3
Cable $130  $144  +$14
COH $400  $320  -$80
  Remarks: COH is Cash on Hand that is spent every month on lunches at work, fast food on the go, tolls, quick marts, small apartment fixes, and the like. Last month all the incidentals went here.  This month, I'll itemize them below to see if they can be budgeted for.
Credit Card $275 (min) All of our extra income goes toward
this.  Therefore, the paydown is
tracked above in the Debt status table
Newspaper $10  $10  -
Gifts $100  $0  +$100
Dinning Out $200  $70  -$130
Entertainment $200  $164  +$36
  Remarks: Entertainment is for movies, day trips, video games, and other luxuries. Obviously, these aren’t needed, but for now we’ll keep it at a modest amount. 
Incidentals  
  $430 Non Frequent Profession Related Fees
$99 New Identity Theft Insurance
$610 Family Trip to Beach
$865 Donation to Cancer Charity
$911 Family Trip to Park
$230 Random things like copays
$1,559 New Furniture
  Remarks: I could probably budget for everything here, but broken down and saved for monthly according to frequency.  Although, I’d rather just pay down debt until we can build up savings where purchases like this can be on a whim without much concern.  If I could only convince the wife that this is the right way to do it. 
Total: $9,604 Remaining Income: -$291


Now that I have three months of recorded expenses, I can take the averages for consistent payments based on their trend. This should be simple for utilities, phones, cable, food, etc. I’ll update my next post with the new numbers. However, I’m still at a loss on how to handle budgeting for incidentals. I guess I’ll add a few more categories that will act as a savings repository for such things, but I’d rather just push the bar lower and only spend money on necessary incidentals.

My Get out of Debt Progress for August 1st

Get out of Debt Progress

My Get out of Debt Conclusion for the end of July

Total Money MakeoverIf my wife ends up reading the Total Money Makeover instead of just glancing at it for my amusement, I hope she’ll be as inspired as I was to relieve this burden of debt and get on board.  This month has been a brutal step backward in my opinion.  The professional expenses and identity theft insurance were necessities, but the others we could have done without.  I worry that one day I’ll come home and she’ll have hired someone to put an addition on the house, fix the leaky basement, extend the deck, or put in a pool.  Such things are needs in her eyes, but not in mine.  At least she’s not a shopaholic spending thousands on clothes like those crazys on talk shows.  You can comment on this post below, or if you wish

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 < Getting Out of Debt June 2009     Getting Out of Debt August 2009 >

 

Nothings Changed


As I said in my earlier post, you need to decide how bad you want this. You are not in agreement with each other. That cannot continue. You lack true focus. No gazelle intensity.

Your tracking income/expenses in spot on and needs to continue but it is the behavior modification that wins the game.  I give my wife cash every month ....yes cash... and tell her don't come back until next pay period. Sometimes she runs out of cash too early and I have seen her stay home for days and not spend a single cent because she has no money. We do this even with thousands of dollars in the bank. That is how this game works if you wan to win. You have to deny now for the future return.

If you keep it up....you'll be in good company soon.

http://www.popcrunch.com/bankrupt-65-famous-people-who-lost-it-all/

Why are you treating your wife like a child?


 I think it is wonderful that you have made some decisions to handle your financial life in a way that suits you.  And that is great. But trying to impose your decisions on someone else is not treating her with respect.  That can't be good for your long term relationship.  (And put in financial terms, divorce is quite a money loser.)  Why don't you try compromising with your wife, having separate finances, or working out a plan that works for both of you?

Identifiing children


If a couple are currently running a combined income household then agree too a combined goal. In this case "spend less than you make"

Make a budget at the beginning of the month that leads both of you to this goal.

Make sure both have input and agree to proposed monthly budget before the month starts.

Soon you will both see who is acting childish.
 

Gotta stop using credit


I love my creidt cards too but overspending is just not an answer to anything. I only use them for security when making purchases as well as to get rewards for shopping. Credit cards were created to lure you into buying unnecessary things and that's what they are best at. Showing you how you can take something worth $300 and pay $30... Yeah right... only you're putting another $200 into the credit card company's pocket.

Because she is acting like a child...


Actually, I don't know the author's wife and how she spends money, but I can tell you that in my experience, my wife acts like a child when it comes to money.  She refuses to even look at the budgets that I've come up with, and all I'm trying to do is have a responsible plan for our future and our children's future.  After working with her for 10 years on the topic, I've come to realize that she absolutely refuses to work from a budget.  In her mind, certain things are simply "must haves" and have to be purchased regardless of whether there is money to purchase them.  However, her "must haves" definition is very loose and she does little to compare prices.  The most generous appraisal I can give her is that she believes I am lying about how much money we have available, and feels that no matter how much she spends, I'll make sure we are all right.

Of course, I try to show her all of my "work" in computing our income, expenses, and need to invest.  I'm completely transparent about all of our finances and even proactively tell her when I'm making a discretionary purchase (secretly hoping for reciprocation).  In my mind her "la-la-la I'm not listening" strategy is to avoid the adult responsibility of economics.  This is also exemplified by my wife's utter inability and disinterest in negotiating any large purchase.  This basically leaves me alone in dealing with all of our tough household issues (e.g. insurance claims, home repairs, large item purchases, taxes, etc.)  It's incredibly stressful handling all of that alone - she won't even talk about it to lend moral support.  Then, when you add her active derailing of our financial plan by careless spending, it becomes almost unbearable.

Yes, there are two sides to the story, but nothing I've said above is an exaggeration.  If you look at the facts, her behavior is not that of an adult.  What's the line from the Godfather?  Something like "Women and children can afford to be careless, but not men."  My wife is a living personification of that truism.

 

I think we need a support group guys


To the post of "Because She is Acting Like a Child" and anyone else who has a difficult time working out a way, with your wife, to control spending, I think we need a support group....................................Maybe just to share ideas.  I guess this blog could be it. 

You just described my wife!!


Have you fixed this situation??  My wife acts exactly the same - and even says "You ruin everything" if I even bring up the issue of cost.

I think you are off base


Whomever posted this post may not be familiar with the addiction of spending money or the addiction of shopping.  People with addictions need help just like a child sometimes.  If all you are going to offer is, "make a compromise", you may as well not even make a suggetion.  All of us go through the compromise stage, and it may work for a couple of hours, or days or weeks, but then there is a sudden spending spree again, when we are still in debt.  Don't get me wrong, I believe we men, need advice from a third party female on how to get this under control.  If every man had an experienced female coach to help him, control the outflow of money from his wife, we would all be better off.  I've been battling this for a long time, and your comment about "divorce" could not be more real. We have not had one, but her overspending and my trying to control have gotten us very close.

Get Out Of Debt's picture
Trying


Yeah the Gazelle intensity is not there, but I don’t feel we’re in such a bad place that a full out life change is required.  This may probably extend my effort to get out of debt an extra year or two, but I think it’ll be worth it.

I can’t just allot my wife money each month as she is the breadwinner.  That would surely lead to divorce if I imposed such restrictions.  Then, as the second poster said, I’d be treating her like a child.  I don’t know, maybe it’s needed, but it wouldn’t go over well and may result in her spending more just to spite my attempt.

What I need to do is get her on board.  I gave her Dave Ramsey’s book a few weeks ago and she has yet to begin.  I’m hoping Dave will inspire her enough so that maybe we could at least get to “rabbit intense.”

Thanks for your comments. 
 

Homey, I see this leading to


Homey, I see this leading to divorce no matter what you do.

Been there, done that


My husband is a big fan of Dave Ramsey, too. Even though I scrimp and save and pinch pennies, he has determined that I can do even more to cut our expenses. His suggestion? Stop eating meat every night and serve rice and beans. Hmm...I'd like to think we're not in such dire straits yet, but then again neither of us has a steady job (we are basically self employed), we do not have health insurance, and we are asking for a loan mod on our mortgage. In our case, the little things would make a difference.

Good luck to you in your efforts to get out of debt. if it weren't for our two mortgages and line of credit, we'd be there too. And unfortunatley in today's market we are upside down on those mortgages. Goodness only knows how our credit profile will suffer before it is all said and done.

get help!


If your wife is spending out of control, you need to sit down and talk to her.  Show her the bank account and what she is doing to it.  Great article!  You can also contact sites for do it yourself credit repair

Tyler

 

 

 

 

Yes, you should share every


Yes, you should share every problem as a couple, even though most of her purchases are for family's use, still they have to wait until all your debts are paid off.

 

Stylish Shopping

 

Wow,


To pay off 11K in debt in one month is certainly admireable, so to see the bills return with another $4300 can lead to fighting words.  I think you may need to figure out a way for some "inexpensive" downtime activities.  While you are quite a way away from Chandler Bankruptcy  you could find yourself financially depressed if the wife refuses to stop incredible spending.  There should be an incentive for her to stop spending, even if for just a few months.

 

...


OMG enjoyed reading this blogpost. I added your rss to my reader.

hm... thank you..


i'm gonna make my own journal

Maybe you should spend only


Maybe you should spend only what you need and less of the luxuries.  And that being thrifty is also beneficial, because you could save a lot of your money for emergency uses. rates for merchant accounts

fast cash advances


sounds like a good idea to make your own little spending journal. I will have to start one of my own thanks.

Spending


I may have posted this before but my wife does spend a lot! However, in fairness, she uses a lot of coupons and shops at Kohls and Target a lot.

Maybe just a man thing, but I don't think I have bought anything for myself in 10 years. OK...maybe it just seems like that long.

Ohio Short Term Health Insurance

same here


hey buddy its a same thing here i m not rich but just want to control the spending but my wife doesnt think that way

Ouch


I think even my wife is surprised when she sees how much she spends!  But she does work really hard and deserves it as much as I do. 

Still it would be nice to have something to show for our work in the form of savings.

 

Ramsey's On Target...


Thanks for sharing your journey. We attended Dave Ramsey's Financial Peace University at a local church and are working on our own mountain of debt. His plan is one of the best financial debt solutions out there.

Your situation isn't as bad


Your situation isn't as bad as it sounds. Try putting yourself in the shoes of only one working spouse while the other one spends on useless things like $100+ on facebook games.

My Similar Woes


 Actually, I don't know the author's wife and how she spends money, but I can tell you that in my experience, my wife acts like a child when it comes to money.  She refuses to even look at the budgets that I've come up with, and all I'm trying to do is have a responsible plan for our future and our children's future.  After working with her for 10 years on the topic, I've come to realize that she absolutely refuses to work from a budget.  In her mind, certain things are simply "must haves" and have to be purchased regardless of whether there is money to purchase them.  However, her "must haves" definition is very loose and she does little to compare prices.  The most generous appraisal I can give her is that she believes I am lying about how much money we have available, and feels that no matter how much she spends, I'll make sure we are all right.

Of course, I try to show her all of my "work" in computing our income, expenses, and need to invest.  I'm completely transparent about all of our finances and even proactively tell her when I'm making a discretionary purchase (secretly hoping for reciprocation).  In my mind her "la-la-la I'm not listening" strategy is to avoid the adult responsibility of economics.  This is also exemplified by my wife's utter inability and disinterest in negotiating any large purchase.  This basically leaves me alone in dealing with all of our tough household issues (e.g. insurance claims, home repairs, large item purchases, taxes, etc.)  It's incredibly stressful handling all of that alone - she won't even talk about it to lend moral support.  Then, when you add her active derailing of our financial plan by careless spending, it becomes almost unbearable.

Yes, there are two sides to the story, but nothing I've said above is an exaggeration.  If you look at the facts, her behavior is not that of an adult.  What's the line from the Godfather?  Something like "Women and children can afford to be careless, but not men."  My wife is a living personification of that truism.

I feel your pain!


I once was a married man who's wife's spending was also out-of-control...  I can tell you from experience, if you both don't get on the same page with your finances, you may be heading down the path to parting ways.

I tried for years without success...  My spending was bad, but my ex-wife would spend like there was no tomorrow!

Dale

How to get out of debt

freedom


I am sure many of us feel this way. However, this is what happaned in our society. And it is not a bad thing unless you want a subserviant wife. In the USA women have more freedoms than any where else like choosing individual health insurance. In other countries women have no where near the freedom as women do in the US and suffer because of it.

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