Married to a money pit

Sheri Fisher knew she had a problem in January when she began her annual financial review. She wanted to see whether she and her husband, David, were saving enough for retirement. They weren't. The frustrating thing was that she knew exactly what the problem was — those DVDs and other impulse buys her husband couldn't resist. Fisher, a 41-year-old technical writer in Hull, Que., didn't know what to do to change her husband's behavior, so she posted a plea for help on an Internet forum: "Is it possible to help your spouse become more of a saver?" she wrote. "How do you help someone you love see the big picture and stick to the plan?"

The advice came thick and fast. "Use an allowance system," posted one forum regular. Another wrote: "Place his or her credit and debit cards in styrofoam cups. The cups are then filled with water and stuck in the freezer." A third wrote: "There's absolutely no way to change a spender's ways … Cut 'em loose."

Good advice? Not according to Ruth Hayden, a financial consultant in St. Paul, Minn., and the author of For Richer, Not Poorer: The Money Book for Couples. She says that most of the tips that Fisher received are doomed to fail, because they're based on the false assumption that the saver is right and the spender is wrong. "There's such an arrogance to savers sometimes," Hayden says. "And I'm a saver, so I can say that."

Hayden says that savers who are married to spendthrifts shouldn't begin by berating their spouses, but by doing some serious soul-searching of their own. "You have to start with the acknowledgement: 'My partner is a smart, capable person who is just different from me. Now how are we going to work together?'"

Hayden says many savers are shocked by the idea that they might be part of the problem. They like the next step even less — that's when you admit that if you're married to a spender, you probably won't be able to save quite as much as you'd like to. If you want your relationship to continue, you're going to have to accept that reality.

If you make that concession, your problem is 90% solved, says Hayden. Once spenders see that you'll meet them halfway, most will voluntarily try to save more. At that point, all that's left is to agree on a method to make sure it happens.

Hayden's favorite approach is to set up four accounts. One is for your savings, one is for household expenses, one is for you and one is for your spender spouse. Both of you agree on how much of your income will be saved, how much will pay for household expenses and how much will go into your personal accounts. But you have no say over how your partner spends his or her personal cut. "I can spend it on shoes if I want to," says Hayden. "You can go ahead and and buy bonds."

This approach can be enhanced with automatic transfers to your savings account each payday so the money's stashed away before it can be spent. As long as you both like the idea, even a weekly allowance can help.

That's the solution Fisher tried, and it's working like a dream. She dreaded the initial talk with her husband, but she was delighted to find that he was just as keen on finding a solution as she was. They settled on one budget for common household expenses, plus each got a personal spending budget of $110 per week, with a small reward each month in which they were successful. "We've stuck with it for two months now," says Fisher, "and he's been fine." In fact she was surprised to find how much she had to cut back on indulgences like pricey organic foods.

Best of all, they just got to pick out their first rewards for sticking to their plan. His reward? A new DVD. Hers? A copy of The Intelligent Investor by Benjamin Graham.