For many couples, the age-old debate about saving versus spending can be as passionate as discussing which film to watch on a Saturday night. But when it comes to long-term financial goals and day-to-day spending habits, finding a middle ground is crucial. It ensures that both partners feel valued and understood, and it prevents money from becoming a crisis point in the relationship.
Understanding the dynamics
Firstly, it’s essential to recognise that both saving and spending have their place. Savers often prioritise future security and avoid unnecessary risks, while spenders might value experiences and immediate pleasures. Neither approach is inherently right or wrong; they’re simply different.
The numbers game
Consider this: A young couple, Anna and Ben, bring home a combined monthly income of €5,000. Anna, a saver, would like to put 20% (€1,000) into savings every month. Ben, on the other hand, wishes to allocate just 5% (€250) and use the rest for experiences, holidays, and finer things in life.
Instead of seeing this as a problem, Anna and Ben can find a compromise. They might agree to save 15% (€750) and then allocate the remaining €500 for shared experiences or individual indulgences. This way, they’re building their financial future while still enjoying the present.
For a balanced financial relationship:
- Discuss financial goals: Understand what each partner envisions for the future – buying a home, travelling, early retirement, etc.
- Set a budget together: Allocate funds for savings, essentials, and discretionary spending.
- Regularly review your finances: This helps in adjusting the strategy as and when required.
Finding The Middle Ground
For the saver-spender dynamics to work harmoniously:
- Joint and separate accounts: Consider having three accounts – a joint account for shared expenses, and two separate ones. This way, both partners have autonomy over their money, reducing feelings of constraint or guilt.
- Set limits: Agree on a spending limit for discretionary purchases. For instance, any purchase over €200 should be discussed together.
- Plan shared experiences: Instead of splurging spontaneously, plan for shared experiences that both partners can look forward to. It could be a holiday, a concert, or even a fancy dinner.
Every time you hit a financial goal, celebrate! It could be saving up for a down payment, buying that car, or simply sticking to your budget for six straight months. Recognising these moments will help both partners feel accomplished and motivated to keep moving forward.
It’s possible for a saver and a spender to build a harmonious financial life together. Respect, open communication, and compromise are the keys. Money should never be the wedge that drives couples apart. Instead, let it be the tool that helps you both craft the life you’ve always envisioned together. After all, in the end, it’s not about how much you save or spend, but the memories you create and the future you build.
Follow Luca Caruana’s weekly column here, and his LinkedIn account or his Instagram for more budgeting hacks. For other money-related columns, check out Luca’s thoughts about the girl math trend and his advice to help change the narrative about women and money.