small change toward a rich life

The Conflict-Free Family Budget: Our Results

Our new budget system accomplished everything I hoped for, and then some. Still, I’ve been surprised by a thing or two about my own reactions, and even more so by Jak’s.

I fully expected that for at least a month or two I would have trouble not bumping up against the $250 limit, especially since Jak and I had been averaging between $250 and $300 per month on restaurants. (Mind you, that was down from a high of around twice that much, a few years ago when we were both working full-time.) Food has always been more my priority than Jak’s; I suspected he would prefer to spend his money on things like sports and music and electronics, which meant that I needed to be prepared to pick up the restaurant tab if I wanted company.

What actually happened was that the moment the new system went into effect, I clamped down on my spending more than I would have believed possible. That first month, my only restaurant expenditure was $6.54 to Chipotle. I spent $104 overall out of my $250 (and $24 of that was involuntary, to pay for a library book that was inexplicably sucked into some parallel dimension). Nor did I feel deprived; what I felt was more like ‘burning determination’.

wad of cashApparently, having a substantial cushion in my personal budget was more important to me than anything, even sushi. Who knew? At the end of the month I rolled over almost $150 unspent. The next month I did go out to eat, carefully, but still rolled over $260. Six months in, I had accumulated a surplus of almost $700 … and that’s through a major family vacation and Christmas.

Once I had a few hundred dollars banked, I stopped getting a big high from underspending and watching the cushion grow … but I still haven’t felt compelled to spend any more. My expenditures have been pretty steady since month three, at around $150-$170. We have been going out to eat about once a month, less than at any point since at least the early nineties. With our restaurant outings so infrequent, Jak has been happy to pay his own way.

I should say that it surprised me only that I got to this point so quickly, not that I got here at all. One of the many things I’ve studied in the last few years is the psychological phenomenon called ‘hedonic adaptation’. This could and probably will fill another entire post in itself, but the basic idea has to do with the way your brain resets its baseline for happiness. Knowing how that works, I’ve been able — with surprisingly little effort — to derive about as much subjective delight from one restaurant meal a month as I once got from four, or ten.

•   •   •

Other things have had exactly the effect I intended. When I set up the budget rules, I was thinking very specifically about ways to counteract our specific personal spending flaws — my own no less than anyone else’s.

One thing I wanted to do was lower expenditure and consumption of alcohol. I cut way back at first, then ramped back up a little once I had saved a solid cushion. I can’t make a precise dollar comparison because previously I didn’t track wine separate from groceries, but I’m definitely spending less. When we do eat out, I’ve rather easily adapted to having just one cocktail or glass of wine with dinner instead of two or three.

Before The Budget, I judged that my biggest remaining financial weakness was buying housewares that, upon reflection, weren’t strictly necessary. I had been successful at not spending frivolously on myself, but I’d left some kind of psychological loophole around buying things ‘for the house’. If the pillows got a little flat, the sheets a little discolored, the towels a little stiff, then whoosh — I was off to buy new ones. On sale, of course, but true thriftiness would have required that I keep using the still-functional ones we already had. I wasn’t quite as impulsive about kitchen equipment, but there was room for improvement there too.

wine glassesI hoped that by making all these purchases part of my finite personal budget, I could force myself to evaluate them more realistically. So far in the last seven months I’ve stayed entirely away from linens, despite long since passing the point where I would ordinarily have swapped in a new set of bath towels. (Jak had a minor mishap in the laundry room with some bleach … and I’ve just been living with the spotty results. Go me!) I have purchased a few items for the kitchen, but with even more care than before. For example, I wanted more than the two wineglasses we had, but filled in with 50-cent ones from Goodwill instead of buying a whole set of new ones at several dollars apiece. When I decided I wanted to experiment with a slow cooker, I spent $33 on a new one … but only after looking for a used one for several months and not finding what I wanted. (And then I made darned sure to send in the $5 rebate.)

I haven’t really been tested on bed linens yet, as I happened to have bought a new set of sheets (yes, on sale) last spring. I honestly don’t know what I’ll do when I start to feel like replacing them. I may yet buy new linens when we don’t strictly need them. I mean, few things give me more personal comfort than a really nice bed, and it might turn out to be just that important to me. But at least it will be a thoughtful purchase; I’ll be weighing the pleasure of new sheets against everything else I could do with that money, instead of fooling myself that it’s ‘for the house’ or ‘for the family’ and so doesn’t really count.

So what else have I been doing with my money? Well, among other things, I’ve given small amounts to a political campaign, to a Kickstarter project, and to a homeless person on the street — all things I didn’t do before. I suppose I had felt like I’d need to get Jak’s agreement first, and those are difficult things to rationally justify. Unlike him, I hadn’t felt particularly restricted by our prior arrangement, but apparently it was constraining certain decisions without my realizing it.

•   •   •

Jak’s spending patterns have transformed under the new system too.

Where I covet bed linens, Jak covets electronics. Smartphones, big-screen televisions, e-readers, speaker systems, computer monitors … Before the CFFB, I would get nervous every time he would drool over a new gadget; I felt like I had to squash his enthusiasm right up front with reminders that we didn’t really need whatever shiny new thing he was looking at.

Starbucks signI would never have imagined that, given a budget of his own, he would go seven months without purchasing a single electronic gadget. But here we are. He doesn’t buy music or dvds like he did before, either, making more use of the public library instead. And remember when I couldn’t get him to stay under $30 per month at coffee shops? Now he’s down to an average of $5. In fact, the only area of Jak’s spending I correctly predicted was soccer team fees and equipment, and even there he gets nearly everything from Goodwill.

He’s saving about 20% of his personal allotment overall. He, too, likes having a cushion in case something expensive comes along. When he spends big money, it’s mostly on extra trips — one to Glacier National Park with Claire; another solo jaunt down to Portland to visit Michaela after she moved.

But really, he’s turned into just as much of a frugality freak as I am. Which I didn’t anticipate at all.

Here’s Jak’s perspective, in his own words:

“I liked the idea of the new budget because we would be saving money and I would have the freedom to spend on myself and the kids without discussing every purchase every time. I knew that the independence would make me happier; what I didn’t expect was that I would actually spend less than before. When I was buying things with ‘joint’ money, I was less diligent about cost — less likely to try to think of ways to do things frugally. Turns out being frugal makes me happier most of the time, but I can still be extravagant about something if my budget can afford it. It’s liberating.

“I’ve discovered that I’m not spending all my monthly allotment; it’s piling up on ‘normal’ months and then I use a lot of it all at once for something big, like a trip or an expensive experience. I didn’t really understand this about myself before, but now I have a lot more data on my own spending habits. That’s cool too.”

•   •   •

One other surprise for me has been a small but noticeable change in how I feel about gifts from Jak. For the first time in over a decade, I am able to accept a gift from him without also worrying about the cost. Partly this is, I think, because he’s being more frugal in his choices; partly it’s that I just don’t feel responsible for everything anymore. When gifts came out of this undefined cloud of resources, I always had to worry whether that money could have been better spent elsewhere.

Also, when Jak has a finite amount that he can spend on himself, and he chooses to take some of that and spend it on me … well, it feels like more of a sacrifice, and somehow seems to mean more.

The same phenomenon means I actually get more pleasure from spending money on Jak, too. For example, I’ve long been buying most of his clothes, because it’s not the sort of thing that he thinks about; if it weren’t for me I think he’d wear the same jeans and t-shirts until they were more holes than cloth. (Metrosexual he is not.) But when I bought him a nice new (well, used from Goodwill, but new to him) pair of jeans last month, I definitely felt more pleased than in times past. I think it was because of my implicit sacrifice.

•   •   •

But the absolute best part? Is that we don’t argue over spending on the kids anymore. It’s always been extra tricky because of the shared custody and the necessary back-and-forth between our household and the kids’ mother’s. Many times one parent will pay for something up front, and the other parent will reimburse afterward for half the cost. In theory, all such expenses are supposed to be explicitly agreed upon in advance; in practice, optional expenses — camp, a trip, lessons, etc. — are often implemented without prior discussion. Even necessary expenses can be wildly different in scope depending upon the thrift of the spender.

Having hundreds of dollars of unexpected charges turn up periodically wasn’t working for either Jak or me, but we tended to handle the situation differently. Jak typically advocated for reimbursing money we didn’t agree to (and would not otherwise have spent) in order to avoid an argument with his ex; I preferred to stand our ground and refuse the outlay. Add to that the aforementioned tendency for divorced dads to give their kids All The Things, my increasing frugality, and our reduced income, and you have a never-ending string of disagreements.

All of that stopped cold the moment we implemented the new budget. Giving Jak both full responsibility and complete control — within agreed-upon limits — derailed that whole dynamic. So far he’s not saving back any of the kids’ money, but he is staying within the budgets we agreed to, which means an overall spending reduction. Plus, now that every kid expense has a clear cost — either it means there’s something else in the future they can’t have or do, or it comes out of Jak’s own budget — he is more inclined to hold the line against the pressure (internal or external) to spend more than we can afford.

happy couple huggingBut that’s coming entirely from him, not me; he no longer feels like I’m the reason he’s having to push back, because I’m not even involved. In fact, I don’t have to worry about it at all, which is a huge relief.

Not that I broke the worry habit instantly; I still sometimes have to stop and remind myself that it’s not my problem. But then I enjoy the fact that I can just let go and not evaluate each expenditure. And I cannot overstate how happy I am that we never need to have that particular argument EVER AGAIN.

•   •   •

So you can see why I’ve come to call it the Conflict-Free Family Budget. For us, I’d say it’s been an unequivocal success. In the final installment, I’ll discuss adapting the system to your own situation.

(Photos by 401K, Smaku, Piutus, and masochismtango.)

5 responses

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  1. Amanda says

    Hey, I actually missed this one until just now…you didn’t mention it on Google+ and I thought the introduction was one of the three parts. This is great: all makes intuitive sense and I knew about some of the concepts (like hedonic adaptation), yet I wouldn’t have figured this all out. Now I really want to try the whole thing, especially the separate entertainment budgets.

    • Karawynn says

      Doh! Yeah, I need to find a way to be more consistent — and efficient — with my social media sharing.

      I’m happy you like it! Makes me glad I spent all those hours writing it up. :)

  2. Cindy says

    Congratulations for your post…. I find it veery helpful. I actually saved it in my computer for the time I decide to share my life with somebody else… =)

    By the way, how do you manage your retirement savings? all together or each of you have your own savings? Just asking because I already started saving money for that, but what if my future partner doesn´t…?

    • Karawynn says

      Hi Cindy — glad you liked it!

      Joint retirement savings might be a good topic for a future post — I will make a note of that. The short answer is that we each have accounts in our own names (that’s necessary anyway to maximize the tax and savings benefits), but I manage diversification across all of our money as if it were one big pool. Each of us is the named beneficiary of the other’s accounts, as well.

      We’ve been together for over 11 years, though, and are otherwise thoroughly intertwined financially — that’s not going to be the best option for everyone, or at all stages of a relationship. For example, my best friend has been married for … something over a decade? … but she and her husband still have completely separate finances.

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