First post:Using annuities to reign in a spender?

[enjoyinglife102]

As usual, great input from this forum on approaches to tackle this behavorial problem. Time to act before your financial world spirals out of control. If that occurs, look in the mirror for the person to blame.

 

[Bestwifeever]

If she spends without regard to budget or income, she will continue to do so after she stops working and even if all the income is in an annuity, racking up CC debt. This problem is behaviour, not budget.

If you don't address it with her it will never be resolved.

Yes. Cut off your covering of all her spending and just see how many months it takes for credit card balances to not be paid in full every month. Not long, I bet.

... Several times a year I go on overseas jaunts to hike up a few mountains ....

I immediately scaled back on plans for a piece of outdoor gear I wanted to get....

She may also feel she is compensating for your expensive fun travel and expensive gear that she may feel is even less necessary than what she is buying. Not an excuse but that is an example of emotional spending.

 

[LakeTravis]

I know exactly where you are coming from. My DW and I used to have this problem. Do you live in a community property state?

I do, and my state Family Code recognizes the use of Post Nuptials to declare separate property acquired before and during the marriage, so I had my DW sign a Post Nuptial. It clearly defines separate property and assets in the event of separation or divorce. Then we established individual accounts.

The effect was immediate - her debt is her debt and her debt alone.

Removing the safety net of my income really had an effect on her. She was "on her own" financially, so to speak. We divy up car insurance and other obligations that obtain the best value when combined and we both contribute the corresponding amount to a joint account from which those types of agreed joint expenses are incurred, but the rest goes into and comes out of individual accounts.


The thing about the Post Nuptial is it sends a very strong message - your spending habits are not acceptable, and although you do not wish to get divorced over it, here's an outline of what will happen and who gets what if we do. And it is legally binding in court.

I can tell you that the amount of pressure taken off my shoulders was immense.

 

[qxky27]

Regarding several comments made about using separate accounts, we do each have our own accounts. DW's pay goes into her own account and I have encouraged her to use a debit rather than credit card for her spending, which she has mostly been doing. There is a second account from which we pay bills that apply for both of us, and I tell her how much needs to be put back into that account to replace her share of the communal spending, and she writes a check for it once a month. But if her private account balance goes too low, that is where she uses the credit cards.

No we are not in a community property state.

I am going to follow the suggestion made by someone here to go ahead and begin tracking all expenses. If we can mostly avoid using cash it probably isn't too hard to do from debit and cc bills to within about 10% accuracy for each category. I will need to keep receipts from stores like Walmart since so many categories of items can be bought there. One good point is that DW doesn't mind me questioning what her expenses are if I can't figure out something on a bill.

I'll post a followup report of my experience with this and some results once I get enough data compiled.

She may also feel she is compensating for your expensive fun travel and expensive gear that she may feel is even less necessary than what she is buying. Not an excuse but that is an example of emotional spending.

Actually she was in favor of the item I was going to get but cancelled-a satellite phone for safety and to call her on from remote spots.

 

[growing_older]

Now this sounds intriguing. You think she spends excessively and apparently not interested in a budget, but also seems somewhat influenced by the (perhaps unspoken) amount you have in unsheltered savings. You want this to be retirement. Apparently she wants this to be spending.

A deep (and long, multiple sessions long) talk about goals and joint vision of finances seems in order. Also, you might consider separate accounts. Doesn't necessarily have to be yours, mine, ours, but people who don't or won't budget sometimes respond to a single (or very few) buckets with limited dollars in them. Paycheck to paycheck people may go over their income each month, but they are often close and even adjust a bit up and down as income goes up and down. If you had a "fund" that is her credit card money to do as she likes, then reconcile each month if she is over or under, she might adjust like you describe you do. Spend more on X means less on Y this month to keep into the overall bucket size. Right now, whatever she does gets paid for albeit with more or less grumbling, but no visible budgetary consequences she can see.

 

[Texas Proud]

I was just thinking.....

There was a thread about someone's relative who was using their money for gambling.... lots and lots of comments... an interesting read...


Soooo, to the OP, what would your decision be if instead of spending on 'things', she was gambling To me, there is no difference.... the money is going out the door and someone has to get if from some income source...

 

[growing_older]

If you already have separate yours, mine, ours, why are you butting in to her spending? Is she overspending the ours money? If you are going to monitor "yours" money, then it isn't really "yours" at all. Sounds like you have very different ideas of what your financial arrangements are. That would be a good place to start this money talk. If you really want joint decisions on all the finances, then you should have an arrangement that accomplishes that and an agreement between the two of you that that is what you want.

 

[Lazarus]

I would be less worried about making her mad and more worried about working for the rest of my life to pay her bills.

 

[omni550]

Sounds like she may currently consider the accounts as "Mine, Ours (for joint expenditures), and Ours (for the purposes of my overspending)."

omni

 

[Midpack]

Just noticed this article in the current issue of Money (while at the library)...

How to tackle your spouse's overspending - Jan. 7, 2013

 

[imoldernu]

I love this thread...

Please don't stop!

 

[Lcountz]

Simple question....will you begin to spend like crazy in the years to come??

NO?

Then why think she will NOT keep spending like crazy?


I went with a man who had to have EVERYTHING new and now...His philosophy was work forever to afford "things"..

My future did not match his and we had a ton of arguments ....and we are no longer together.

I retired last week at 56.

He has lost his job with megacorp at 58, is in horrendous debt including loans from 401K and co-signing on daughter's car....but at least he has a new bathroom in his house and a new motorcycle and other new toys....(owned by the bank and his 401K).



And limited unemployment, diabetes , no health care but Cobra, 58 Years old.

Just some food for thought.

Will YOU start spending like crazy in the next months/years?

 

[haha]

Simple question....will you begin to spend like crazy in the years to come??

NO?

Then why think she will NOT keep spending like crazy?


I went with a man who had to have EVERYTHING new and now...His philosophy was work forever to afford "things"..

My future did not match his and we had a ton of arguments ....and we are no longer together.

It is harder when you are married, emotionally and financially.

Even if you have already checked out emotionally, you have to think pretty hard about whether to poke that hornet's nest. Almost anything can happen once you start talking. It can be like lancing a boil-who knew all that really smelly stuff was in there?

I know a retired couple who tiptoe around one another. He has a good pension and high SS, she has much less of either, and neither of them has much in the way of assets. She is a spender; she can easily spend $90 on a tee shirt. But I don't think this is simple out of control spending, I think she is telling him to f himself, for being so emotionally distant, which from my POV, he is.

It can be a cascade that is from really hard to impossible to control. Over 2/3 of divorces are initiated by women, and my guess would be that over age 60 the proportion might be much higher. And often the guy has no clue that he is skating on thin ice.

Ha

 

[Jager]

To me the real problem is less that your wife overspends (hardly an uncommon problem) than that you allow your savings to cover the difference. Not to be blunt, but does she call the shots on everything?

If not, why don't you simply stop enabling her?

If you can't do that, I'd say finances are the least of your problems. More spreadsheets aren't going to help.

 

[Lazarus]

Simple question....will you begin to spend like crazy in the years to come??

NO?

Then why think she will NOT keep spending like crazy?


I went with a man who had to have EVERYTHING new and now...His philosophy was work forever to afford "things"..

My future did not match his and we had a ton of arguments ....and we are no longer together.

I retired last week at 56.

He has lost his job with megacorp at 58, is in horrendous debt including loans from 401K and co-signing on daughter's car....but at least he has a new bathroom in his house and a new motorcycle and other new toys....(owned by the bank and his 401K).



And limited unemployment, diabetes , no health care but Cobra, 58 Years old.

Just some food for thought.

Will YOU start spending like crazy in the next months/years?

Your not going to give him a bail out?

 

[sunnysideup]

I have seen several suggestions for the yours, mine and ours accounts, which is how DH and I handle our money. I am not convinced that will solve the problem.

E.g. Overspender has no money left to pay the bills or share the cost of a wonderful once-in-a-lifetime vacation. What does the saver do? Leave the bills unpaid? Take the vacation alone? I can't see that the saver wouldn't end up shouldering the bills continuously.

IMHO couples need to compromise on the spending/saving. Even DH and I don't agree on all of our expenditures, but we compromise.

I also think OP that you are unintentionally enabling, sorry, but it's true. I wish you good luck as you are right, you can't get your wife to change, she has to see the light and make that decision herself. Spending is emotional or even an addiction for some folks.

 

[Independent]

Going all the way back to the original post -

lots of people are used to living paycheck-to-paycheck. Money in the checking account is there so it can be spent. If they save, it's because they use automatic payroll deduction and the money never makes it to the checking account.

This is a simple form of financial management that works for some people.

For this type of person, annuitizing that 401k at retirement may well be a good management approach. People who post here would say it's not optimal, and it's not for the LBYM types who post here. But, I can easily see it working for many people.

So, if the original poster is committed to a marriage with a person with this personality, than annuitizing at some point makes a lot of sense to me. I've heard the phrase "using an annuity to build a retirement paycheck", that's reasonably accurate.

 

[qxky27]

Lots of interesting views of the situation coming out on this thread. I should add a little more now.

DW's spending certainly does have an emotional aspect and we do have to sort of tiptoe around each other when discussing the issue. But then, nearly every couple I know does this about one issue or another. I think that is just typical of marriage in the 50's age range and maybe all age ranges.

As someone said I am like a congressman kicking the can down the road. The emotional and relationship issues are much tougher to deal with for me than actual strategies (OK I admit being a wimp)

Getting back to strategies:

My original post was about annuities but I have had a couple other ideas too.

1. She had me set up her tax withholding on her employer website and I arranged for more to be held back than needed, so she will save a little there without knowing it. This is just minor though.

2 I've told her that when it comes time to sell our current house (with a flight of steps) and move to a single level place for old age that the formula for how much we can pay for the next home (in cash) will be: sales price of current home minus agent commission minus moving expenses minus her spending deficit while employed. This may really have an impact because she is MUCH more concerned with her home environment than I am. I could just about live in a tent and be OK. I will not care that much about the details of the house as long as its not in a crime ridden area.

Logic DOES work with her sometimes about spending. I just have to be aware that what moves her to change may be nothing like what would move me.

 

[Texas Proud]

Lots of interesting views of the situation coming out on this thread. I should add a little more now.

DW's spending certainly does have an emotional aspect and we do have to sort of tiptoe around each other when discussing the issue. But then, nearly every couple I know does this about one issue or another. I think that is just typical of marriage in the 50's age range and maybe all age ranges.

As someone said I am like a congressman kicking the can down the road. The emotional and relationship issues are much tougher to deal with for me than actual strategies (OK I admit being a wimp)

Getting back to strategies:

My original post was about annuities but I have had a couple other ideas too.

1. She had me set up her tax withholding on her employer website and I arranged for more to be held back than needed, so she will save a little there without knowing it. This is just minor though.

2 I've told her that when it comes time to sell our current house (with a flight of steps) and move to a single level place for old age that the formula for how much we can pay for the next home (in cash) will be: sales price of current home minus agent commission minus moving expenses minus her spending deficit while employed. This may really have an impact because she is MUCH more concerned with her home environment than I am. I could just about live in a tent and be OK. I will not care that much about the details of the house as long as its not in a crime ridden area.

Logic DOES work with her sometimes about spending. I just have to be aware that what moves her to change may be nothing like what would move me.

My comment on your plan.....

Good luck with that.....

 

[Midpack]

My comment on your plan.....

Good luck with that.....

+1. A sad situation, sounds like enabling or at the very least skirting the issue (kicking the can). I can't imagine openly trying to trick my spouse on such an important topic (changing her withholding, buying an annuity to protect her from herself). It could end very, very badly one day in the distant future. But 'walk a mile in the other persons shoes I guess...'

DW's spending certainly does have an emotional aspect and we do have to sort of tiptoe around each other when discussing the issue. But then, nearly every couple I know does this about one issue or another. I think that is just typical of marriage in the 50's age range and maybe all age ranges.

Evidently it's the circles we travel in, but that's not typical of our friends and (most) family at all. While there are indeed minor issues spouses 'tiptoe around' (pick your battles) - letting managing money/expenses be one of the issues could have dire consequences. And it appears most couples here are reasonably if not completely like minded about managing money/expenses.

I guess I need to give DW another extra big hug, the second time resulting from this thread...

 

[Animorph]

Buying annuities when it looks like your portfolio is shrinking too fast to fund the rest of your retirement is a standard backup strategy. So it's a reasonable thought.

I'd just keep her working until she can support her current lifestyle. And point out that that's why she's still working. If she's OK with that, then fine. Don't let her eat into your retirement funding.

 

[haha]

I'd just keep her working until she can support her current lifestyle. And point out that that's why she's still working. If she's OK with that, then fine. Don't let her eat into your retirement funding.

People who post this kind of thing must be very docile, and have very docile mates.

People in general do not much like to have things pointed out about them, unless those things are totally and unambiguously wonderful.

And I can't wait until you try to explain to the family court judge how all the money that is left is solely your retirement funds. She ate hers.

 

[Lazarus]

And I can't wait until you try to explain to the family court judge how all the money that is left is solely your retirement funds. She ate hers.

I was thinking that myself. You can give her half now or more than half later.

 

[imoldernu]

Professional advice from Money:
How to tackle your spouse's overspending - Jan. 7, 2013

To broach the topic of overspending without initiating World War III, adopt this game plan.
THE GROUND RULES
Time it right. Choose a time when you're both relaxed, like a weekend morning, and make sure you each have at least half an hour free.
No accusations or hyperbole. Don't start sentences with "You did"; focus on "We." And while comments like "Are you trying to put us in the poorhouse?" may be emotionally satisfying in the moment, they're ineffective in the long run.
Don't use the B-word. "The word 'budget' has a negative connotation," says Price. Instead, come up with a "spending plan" -- a term more likely to resonate with a spendthrift.
Follow up. These chats work best if done on a regular basis. Schedule a monthly money date to stay on track.
YOUR BEST APPROACH
1.Opening gambit: "I'm feeling a little stressed about money. Now that the holidays are over, I'm worried we may have spent too much. Can we talk about our financial plans?"
The strategy: Start by sharing how you're feeling, not what you think your spouse is doing wrong.
"When you do this, the reaction from your partner is more likely to be, 'Oh, I'm causing my partner to feel a certain way,' " says Price. "So he or she is naturally more inclined to say, 'I'm sorry,' rather than become defensive."

More....

 

[Animorph]

A plural "your"!

Yes my DW out-LBYM's me.