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Do you guys operate within a budget?
I know this is technically the answer, but implementation here has been much more difficult. Would love ideas of how others have done this with very high incomes and spouses. I’ve tried a few times without it sticking.
It feels like most of the advice out there is oriented around cash-flow oriented envelope systems that don’t make sense when you’re spending in the range most of the people on this board are spending.
Mentor
Don’t know if this will be helpful, but we both max out 401k’s and IRAs, and then are each responsible for some expenses. She pays for nanny, landscaping, house cleaners and any dog-related expenses, plus much of the household expenses we buy through the nanny (nanny buys groceries and sometimes take-out and she pays her back). We use her medical. I pay mortgage, taxes (real estate, quarterly estimates and whatever we need to pay April 15th), private school fees, utilities and cable and vacations. She mostly buys my daughter’s school clothes, and I pay for sports and music lessons. I pay for all of the money we donate to non-profits, hospitals and community service organizations. I’m on the hook for club fees and dues.
The rest she can spend as she wants and I invest as I see fit beyond the 401k and IRA. Let’s me not worry about her mani-pedis and facials or lunches and dinners with her girlfriends and she doesn’t feel like I’m micromanaging her income.
We could be more disciplined about saving, but life’s too short and a happier marriage is worth the lost savings. She makes 25% of what I make so it works out ok.
I do like that this creates some incentive alignment - in essence, your partner has flexibility and latitude within her excess cash, and it feels like it comes from her working vs. you working.
This is more difficult if you are in our situation where it’s effectively a single earner, but maybe someday we could migrate there.
auto-allocate more free capital to investments. less to blow on nonsensical spending. it won't mitigate the marital elephant in the room so tacitly ignored, but hopefully curb some of the bleeding.
My marital compromise was to jointly agree on a monthly savings amount and then for me to stop worrying about day to day spending. As long as we save as planned and don’t go into debt, I don’t worry about the ridiculous number of decorative pillows we have around the house.
Make more money ;)
Well, hopefully savings / investments will increase in value (this year and probably at least the next not withstanding), but I get your point. And 4% is probably a reasonable withdrawal rate unless you retire young.
I lived this exact situation for years and wrestled with the same dilemma. My spouse wasn’t dropping big dollars on individual purchases but the “death by a thousand cuts” dynamic was alive and well. It got so much better when we agreed on a number to auto transfer to the brokerage account. Now I feel like our earnings are being invested and my partner knows to plan for it. The key is just to remove “unspent” dollars from the account. Automate it. This one thing helped us dramatically.
I’ve found managing on a cash account basis to be difficult given how lumpy and uneven our cash flows can be - any given month could have inflows/outflows that are $100K+ with partial bonus payments and taxes and private investments. And then you have the months where you end up with, say, 2 Int’l trips and you have business travel inflows/outflows that are $30K+.
Same. My SO’s has Amazon, Wayfair and Walmart on the speed dial. Each item is not a lot in terms of $, but it’s not always stuff that we need. Also spend time hunting for goods and price comparison whereas I am more focused on things we actually need and my comparison analyses is very quick
I have given up and just take the lead in ensuring we have sufficient savings and investments
Challenge is that we are also a single income family.
We spend $23K a month all-in (excluding taxes, savings, healthcare premiums, etc.) and I couldn’t for the life of me tell you what it goes to. $6K to housing, $3K to vehicles, $1K to hobbies, and the rest is a black hole of a thousand small cuts.
Either I misread or you edited. Thought the above said “including” where it now days excluding
By full time career, you mean spin class or yoga instructor?
Why does this matter?
Same scenario here. We’re a millennial couple and we’ve solved it pretty straightforward. We regularly discuss the detailed home budget and future savings-investment plans. Transparency with Quicken to the core…
I’m in the same situation and just try not to think about it.
We’re still saving a ton of money each year because of high income and low housing expenses. We don’t lack for anything we need. And we’re well on our way to a great retirement.
So I just try to forget that we could be saving thousands more each month with no real quality of life impact. Not worth the stress of having an argument with my spouse that won’t change anything. I’d rather not spend our time together arguing.
If you can save 20% of your gross income on average from now to retirement, don’t worry where the rest is going. Chalk it up to enjoying your life. If you are saving less than that, then you need to dig in and shave something to protect your good life in retirement.