If you’re serious about saving money for the future, congratulations. Not too many people are like you. Interest rates are low and consumerism is America’s favorite pastime.
Chances are your spouse doesn’t share your views on frugality. Everyone around them is planning vacations, buying new homes, and bragging about their latest purchases. It makes it seem like everything is fine when really it isn’t.
Between 2004 and 2014, median household income fell by 13%, while consumer spending grew by 25%. People are spending more and earning less. You know this is a problem, but making your spouse understand is a different story.
But if you want to build a financial safety net and save enough money for retirement, you can’t do it without their support. Here’s how you can convince them to save money together.
Put Yourself In Their Shoes
In my work, I’ve seen many couples discuss spending like a win-or-lose battle. One person wants to defend their right to enjoy life and spend money from time-to-time, while the other is focused only on the future.
This back-and-forth happens all the time with me and my wife. She likes to call it “Financial Terrorism” whenever I freak out over a small purchase she makes. I’m just trying to be practical, but it’s led me to say some things (“You’re leading us to financial ruin!”) that are hurtful to her and makes it more difficult to agree in the end.
So if you want to have a successful conversation with your spouse about spending, put yourself in their shoes first. Learn exactly why they feel it’s necessary to spend money like they do. Show that you understand and sympathize so they’re willing to put down their battle weapons and actually talk to you about it.
Focus on the Benefits
There’s no tricking your spouse into thinking that abandoning the habit of consumerism will be comfortable and easy. They’ll have to change their entire mindset, and then give up many amenities they’ve grown accustomed too, like the extra vehicle, 3 story house, and
They’ll have to change their entire mindset, and then give up many amenities they’ve grown accustomed too, like the extra vehicle, 3 story house, and an annual vacation.
You understand this is an unfortunate necessity of today’s economy. The US retirement savings deficit is between $6.8 and $14.0 trillion.
Your joint health care costs during retirement could run several hundred thousand dollars. And Social Security funds are running out. Even if you have some money stashed away, it’s probably nowhere near enough to sustain you through retirement.
And Social Security funds are running out. Even if you have some money stashed away, it’s probably nowhere near enough to sustain you through retirement.
But spouting off stats like that aren’t likely to make your spouse enthusiastic. It’s a scare tactic they might respond poorly too. So don’t focus on why saving money is critical for long-term survival.
Instead, focus on the benefits, such as:
- If we get rid of our debt, we’ll save money on interest that we can use for something we enjoy.
- Imagine how much easier it would be to keep up with cleaning and maintenance on a smaller home.
- We can use the extra money to help our kids if they get sick or need help.
- Imagine what we can do during our retirement years if we have the funds saved up.
- If we get all of our financial obligations taken care of while we’re younger, we can retire some place exotic.
- We can easily live 25+ years after retirement. If we have a big nest egg, we won’t have to worry about relying on the kids for support or ending up in a retirement home.
Practice What You Preach
If you don’t already have your hunger for consumption under control, you’re not ready to talk to your spouse about savings. Some financial advisors say you should “make goals together,” but I recommend leading by example.
Start putting more energy and effort into yourself and your relationship before asking for financial austerity.
For example, you can
- Exercise more
- Improve your diet
- Downsize your own belongings
- Get your financial accounts in order
- Reduce your credit card debt
- Start spending more time with your spouse and children
- Participate in more activities your spouse values
If you haven’t already made improvements personally, it will be difficult to convince your spouse they can too. Especially since everyone around you is stuck in this alternate reality:
You can earn less and spend more and everything will be just fine. Sometimes though, you need to spend more to save more.
Remember It’s a Process
Abandoning a life of consumerism can be liberating in a lot of ways. Having fewer things makes your life less complicated, and opens up opportunities to have better experiences long term. But real minimalism requires serious discipline. Your spouse may be reluctant to say “yes” to saving because they know they can never live up to your standards.
But each step your spouse takes in the right direction helps. Make sure they understand that you don’t expect them to reinvent themselves and their spending habits overnight. The habit of consumerism is something you chisel away at, much like you chisel away at the debt you incurred from it.
So turn yourself into a cheerleader, instead of a “Financial Terrorist.” Show your appreciation for whatever efforts your spouse does make to save money. This kind of positive reinforcement will help you succeed at saving together long term.
About the Author: Ian Bond is a private banking senior executive with over three decades of experience with Goldman Sachs, Credit Suisse, and Citigroup. Ian is the founder of MyRetirementRehab.me created to help other executives and professionals rehabilitate their finances and make a prosperous, enduring retirement a reality.