Family Finances

By Orson Scott Card

How a couple handles money can make or mar their marriage.

For many couples, handling money comes easily; but for others, conflicts over finances can sometimes seem insurmountable.

Among many other things, a new marriage is very much like a corporate merger. Two people, possibly with very different habits in handling money, suddenly find themselves trying to combine those different methods with one source of funds and one household to take care of.

After interviewing dozens of Latter-day Saint couples from Florida to Michigan, from Washington, D.C., to the San Francisco Bay area, I reached one simple conclusion: no one way of handling money is always best. Even though my sampling is limited to the United States, the general conclusions can apply to Saints everywhere.

Among some couples the husband handled all the money, wrote all the checks, and gave the wife an allowance for household expenses. On the average they were neither more nor less content with their approach than the couples in which the wife wrote all the checks and the husband arranged to have a spending-money allowance. In between those extremes were dozens of couples who had separate checking accounts, or who discussed and paid the bills together, or who took turns handling the finances.

And there didn’t seem to be any significant difference between couples who had very little money or who had a great deal: there were as many who had financial problems with a lot of money as with a very little.

What does make the difference, then, between couples who can handle finances with ease and those who can’t? Couples who handled their finances successfully seemed to have several things in common: communication between spouses, reasonable expectations, willingness to budget, and rejection of debt.

Communication between Spouses

If husband and wife both know what is going on with the money, it doesn’t matter who is actually writing the checks. But when either the husband or wife feels unsure—insecure—about where the money is going, problems begin to arise.

Kent and Teresa Barker, a young couple in Sterling Park, Virginia, liked the way Kent’s parents handled the money. “My mother always wrote out the checks and kept track of them. Dad would just go over the checkbook with her and see that things were getting taken care of for the month. That’s the way we handle it, and every month we jointly compare what we’ve spent with our budget and see how we’ve come out. Neither of us has to ask the other for money—we both know exactly where we stand financially, how much we can or can’t afford for special things.”

Brother and Sister Earl Roueche of McLean, Virginia, have followed a similar procedure through many years of marriage. “I don’t think either one of us ever spends any money without the other one knowing what it’s being spent for. We talk over even the minor decisions. After all, minor purchases add up fast!

“Whether we’re spending more money for food, buying clothes, or deciding on whether to buy a car, we always discuss in some detail before we do it. Many things we discuss with our children, because it will affect them, too. We wanted to buy a piano one year. Wet took several of the children with us, and then after we had looked at several pianos we told the salesman that we would come back later after a family discussion. He really laughed when we came back, because he had thought we were just making an excuse for not buying a piano! But after talking it over, we decided as a family that we could buy it—though it meant cutting out some other extras. The children didn’t mind, because they felt it was their decision, too.”

That seems to be the important thing: whether all those involved feel like the decision is mutual. The problems seem to come when one spouse or the other starts to decide arbitrarily. “No, you can’t buy that” can be frustrating when one spouse is always saying it to the other.

“I had never been involved with the finances,” one woman said. “My husband made all the decisions, and I never knew what was going on. So imagine my surprise when all of a sudden I found out we were on the verge of bankruptcy!” In this case, the husband had simply believed that men were supposed to handle the money. He wasn’t very good at it, though, and his wife was! So they decided that she would balance the books; they began discussing every purchase, every payment, and deciding together—and with their combined wisdom and mutual self-restraint they were able to avoid bankruptcy after all.

“One thing that never works,” say the Kay Christensens of Kansas City, Missouri, “is the attitude, ‘This is my money, so I’ll go spend it the way I like.’ No matter whether the husband or the wife is bringing in the money, all the money should belong equally to both. Neither the husband nor the wife has the right to go spending ‘because it belongs to me.’”

Several families found that communicating about money had another good effect: “She is a good financial conscience,” one husband said. “When I’m tempted to let something go in order to buy something else, it helps me to keep control when I know that my wife will worry about the payment I didn’t make.”

And discussing before buying is a good way to avoid “impulse shopping.” “We never buy things on a whim,” many couples told me. “We always discuss. And that means that usually we don’t waste our money on anything foolish.”

Talking things over between husband and wife is not a guarantee that nothing bad will ever happen financially. But it is a guarantee that one spouse or the other won’t be shocked when something goes wrong, won’t be resentful when belt-tightening is needed, won’t fritter away the family’s financial resources. And when both spouses have agreed on the way the money should be spent, there can be few quarrels over what “you” did with the money.

Reasonable Expectations

“One of my sons had a terrible time with money when he first got married,” one father told me. “His wife had been raised in a wealthy family, and she was used to getting what she wanted. The trouble was that my son was going to college and holding down a part-time job, and there just wasn’t any money. But she would decide they had to have an electric can opener because her parents had had one, and she wheedled until he bought her one. That kind of thing happened again and again, until they were in pretty bad financial shape.”

Sometimes one spouse or the other—or both—hasn’t really learned the value of money. Accustomed to having money whenever they want it, accustomed to all the luxuries of their parents’ homes, they don’t realize that the early years of marriage almost always require some sacrifices. The husband may be going to school, but even if his education is essentially complete, he won’t reach his earning peak for many years. The beautiful home with lovely furnishings doesn’t come right away in most cases.

Husbands’ expectations can cause problems, too. “I was single for many years before I married,” said one man. “I was used to buying whatever I wanted. You just can’t do that anymore when the children start coming. We were deeply in debt before I finally learned that lesson. The boat would have to wait a few years!”

Indeed, a bishop in the South said, “Time and time again I talk to families who don’t have enough money to pay tithing, to meet basic food needs—but they’re the families who last month bought a boat! There are people in our ward who take their minds off their financial troubles by going out to dinner and a movie every weekend! When their son’s Little League team goes to tournament, they go too and stay in an expensive motel and eat at restaurants. They fritter away their money and then wonder where it went.

“People like that,” he went on, “need to take a hard look at what their income actually is. They have to stop expecting their money to buy what their wealthier neighbors’ money buys. Even if you do catch up with the Joneses, there will always be the Smiths with even more, and now you have to keep up with them. I wish there was some way to convince people to just keep up with themselves and forget the neighbors’ life-style!”

Richard and Kathy Halvorsen of Overland Park, Kansas, found where their priorities belonged. “We like nice things, and now we have some nice things; but neither of us has ever gotten completely depressed because we could not have a certain luxury. What we can afford to buy is a necessity! We were dirt poor when we were first married and went to school on a shoestring,” Brother Halvorsen reported. “Kathy worked me through college—and got her own degree at the same time. We learned how to do without things. Now when we can afford something, it is a pleasant surprise.”

Willingness to Budget

“We sit down and figure out all our basic needs—tithing, food, and clothing. House payments, utilities, that kind of thing,” said Rulon Munns of Lakeland, Florida. “Then we make a list of things we want or feel we need, like a new car or a couch or a dining room set, and list them in their order of importance. After we have paid all the necessary bills we start saving the rest of the money for the number one thing on our list. After we’ve bought that, we go to number two.”

That seems to be the key to many families’ financial contentment: budgeting the necessities first, and then using the leftover money—if there is any—wisely.

“What surprised us when we started to budget,” one Salt Lake City couple confessed ruefully, “was that we actually had more necessary payments than we had income! And here we’d been spending as if we had extra money every month. It took careful ordering of priorities and skimping for quite a while to get on top of things. Sticking to that budget was hard at first. But when we compare our financial situation then to the way it is now, we know we’ll never stop budgeting.”

A young lawyer who is in his fifth year with a major law firm said, “All of the other associates own large homes. When we were looking for a house we wanted one of those big homes so badly. We debated over it—we could have got a loan to buy one of those big homes, but our payments would have been so large we would have been scraping to buy food and clothes and to pay the utilities. And so we bought this much smaller home, and now we have money left over to live on.”

Before going into any major purchase, most of the better money-managing couples drew up a year’s budget in advance, figuring exactly what the large payments would do to the rest of their finances. “Budgeting keeps your eyes open,” said Carlos M. Bowman of Midland, Michigan.

The Bert Ray Wanlasses of Detroit, Michigan, could have bought some furniture a year after they bought their first home. The payments seemed low—but then they drew up the budget. “We realized that if we bought the furniture, something else essential, like our tithing, would have to be neglected. So we paid tithing and bought slipcovers. We lived with those slipcovers for five or six years. We eventually paid cash for the furniture.”

An important part of budgeting is writing down where the money actually goes. “Once after we listed all the budgeted things—house, car, insurance, food—we thought we could save about two hundred dollars,” say the Deane M. Gearigs of Roseville, Michigan. “But by the end of the month, there was maybe five dollars left. Where did it go?” They kept careful track of it and realized that the money was going for important things that couldn’t be changed. “We changed the budget to include those expenses, and now there’s no unconscious flow of money that we’re not aware of—those ‘extras’ are figured as part of the budget.”

For a budget to work, it’s essential that a couple know what all their needs really are—not just the major payments. One Salt Lake City man confessed, “It used to bother me that my wife kept asking for more and more money for household expenses. But then I realized that I understood no more about grocery prices than she understood about the expenses of taking care of the car. So now we keep each other posted on what prices are doing, what the needs are, and figure it right into our budget.”

And one bishop said, “When my financial clerk moved away, it was about a month before I could get a new one. I kept the ward’s books for that month and discovered that the Church has an ideal system for keeping track of which account the money is going into. So I set up our family accounts using the Church’s accounting system. It works perfectly—I always know exactly where our money’s going and where it’s gone.”

A budget is no guarantee that there won’t be problems—medical expenses, unexpected property assessments, a steep rise in insurance rates, a sudden family emergency. All were cited as reasons why a good budget is occasionally broken. But without a budget, many families live in a state of perpetual emergency, never sure why there isn’t enough money to pay the bills. With a plan that is carefully followed, a family can at least have the security of knowing exactly where they stand financially.

Rejection of Debt for Most Purchases

“I worked full time at the Forest Service while I was a full-time student getting my degree,” said Bishop Jack Green of Sterling Park, Virginia.

“And he was married,” his wife added. Yet when he finished his education they were in a better financial situation than when they married.

How? They were careful. And they refused to go into debt.

“When we moved into our first unfurnished house we decided we were going to furnish it for $200. The house had a stove, and that was all. We bought a secondhand refrigerator, an inexpensive dinette set, a used couch and chair, a used vacuum cleaner, a cheap new mattress, and used bedsprings—and we kept it under two hundred! We still have that couch downstairs. It’s pretty beat up, but it’s useable.”

Many successful couples insisted on one point: “We didn’t run out and buy a house like our parents’ house and furnish it like that. There’s only one way that can be done—excessive debt. And we refused to go into debt for furnishings at that point in our marriage.”

In two areas most families did go into debt: for the house and the car. A few families rejected debt even on the car, though I met no one who had paid cash for a house.

But other debts? Jay Foster Irwin of Detroit, Michigan, says, “We have charge cards for convenience, but wherever possible we pay by check. And we try not to let the bills from credit cards pile up for more than a month.”

Robert Laird, a bishop in Orem, Utah, counsels young couples not only to tithe, but also to save. “Even if it’s only ten dollars a month, it adds up. And saving gives you a cushion. With money in the bank, you aren’t as tempted to go into debt.” The eventual goal? “Have enough set aside to handle emergencies. After that you save for other purchases.” Anyone who has ever had his car’s automatic transmission break down knows that a few hundred dollars in the bank is vital.

Many couples found that the temptation to go into debt became strong when they got their first good job. “When we realized that we now had all that money coming in every month,” one husband said, “we began to think that twenty-five dollars a month here and thirty dollars a month there wasn’t very much at all. But we caught ourselves in time. When we save money in order to pay cash for something, the bank pays us interest while we wait. But when we go into debt to buy something, we pay interest. It makes no sense. Besides, when we’ve finished paying for something we buy on time, it’s already old. But when we pay cash for something, we own it completely when it’s brand new!”

Another problem is the automatic raise. “I knew a raise was coming in February, so I didn’t worry,” one young man said. “When the raise came, I was already behind.” The solution? “Now we don’t spend money until it’s in the bank. There’s nothing we need so badly we can’t wait for it, except food, necessary clothing, and shelter.”

Sometimes, however, debt is justifiable. Carolyn Green of Sterling Park, Virginia, wanted a piano, but they couldn’t afford it. She and her husband figured out that if she taught only a few piano students she could pay for the instrument in three years. “Even so, we saved up the first year’s payments in advance, just in case. Then we bought the piano and made the payments out of my piano lesson money. We would never have gone into debt for the piano if we hadn’t been sure it could pay for itself. Now I just teach my own children to play, but the money we save on their piano lessons makes it a good investment even now!”

As any accountant can tell you, debt is sometimes a legitimate tool of finance—when it comes to investments. When the item to be purchased is going to pay for itself, like the Greens’ piano or a van for a sign painter or a typewriter for a freelance secretary, borrowing can be essential. But since the debt must still be repaid even if the money-making project doesn’t work out well, it is wise to invest in items that retain value, so that they can be resold if that becomes necessary. Debt can also be legitimately used for capital investments, such as land or buildings or businesses. (However, borrowing money in order to speculate can easily lead to serious difficulty and is contrary to the counsel of Church leaders.)

Buying something on credit is also sometimes not only legitimate but necessary in order to establish a good credit rating.

The kind of debt that most finance-wise couples seem to avoid is borrowing to pay for things that do not retain value, things that do not “pay for themselves”—like furniture, vacations, minor purchases, household appliances, clothing, food storage, and such “pleasure items” as stereos, radios, expensive sets of books, and art objects. As one couple that lives comfortably on a modest income pointed out, “We can’t enjoy using something that we don’t own—and we don’t feel like we own something until it’s completely paid for. So we figure, if we can’t pay cash, we can’t afford it.”

Money Has Never Been a Problem

A young couple in Provo, Utah, struggling through college with three children on only three thousand dollars a year, told me: “Money has never been a problem with us. How could it? We don’t have any!” But speaking seriously, they said, “We refuse to quarrel over money. We are determined to be happy. Why be miserable because we live in a cramped apartment? It just makes us closer!”

And that seems to be the biggest difference of all between the couples who handle money easily and those who suffer over it. Time after time the couples who, no matter how large or small their income, had a harmonious relationship over finances said, “We don’t really care that much about owning things. It’s nice—but we can do without it. What’s important is each other.”

With that attitude the obstacles are rarely insurmountable. Even when financial problems do come, the couple can face them in unity, refusing to be divided by difficulty.

The experience of Latter-day Saint families I interviewed points to several principles of handling money:

1. Communicate! One spouse should never be unsure of what is going on with the finances. All but the most trivial decisions should be made together, combining the wisdom of both husband and wife.

2. Expect only what is reasonable. Money doesn’t come easily, especially early in marriage. Neither husband nor wife should expect to be able to spend as they did when they were single.

3. Budget! Plan ahead and follow the plan as closely as you can. Record where the money went. Unless you know where you really want the money to go, it won’t go there! But be prepared to adjust the budget to meet emergency and unplanned needs.

4. For most purchases, reject debt! The temptation to buy now and pay later must generally be avoided if a couple hopes to be financially secure. Do not borrow to invest in speculative ventures.

5. Remember that your marriage is more important than anything you might own, more important than any problem you might face. Don’t let money be a wedge between you.

“We have enough,” they said. Enough ranged from a tiny basement with two beds for four children to a seven-bedroom house with a view of the sea. For many, enough is not an amount—it is an attitude. And if a family is content to live on what they can earn, and no more, then they will almost always have enough. Enough, at least, to be happy.

• Orson Scott Card, a freelance writer, is gospel doctrine teacher in the Twenty-first Ward Salt Lake Emigration Stake.

Illustrated by Parry Merkley