09 Nov Spouses and different spending habits

Q. My husband and I have different spending ways. I like to put it all on a credit card so I can keep track of how I spend, and we pay it off each month. He prefers cash, but he doesn’t keep records of how he spends. That makes it hard for me to analyze our budget. What do you suggest?
— Working it out

A. It’s quite common for spouses to have very different money habits. Some couples choose for one spouse to manage things while others do it as a team, and still others will decide to keep separate accounts.

While you want to get on the same page with your husband, you might be worrying too much, said Jerry Lynch, a certified financial planner with JFL Total Wealth Management in Boonton.

“Are you saving enough? If yes, don’t sweat it,” Lynch said. “It is great to fully understand where your money is going but if you are saving at a level you feel comfortable with, don’t worry about it.”

Lynch said it can be very helpful to analyze spending patterns, but in the end, if your saving level is there, it really doesn’t matter.

“It only matters when the couple is not saving at a reasonable level and they do not know where their money is going,” Lynch said. “So if you are okay, don’t force it. If you are not, then yes, force it.”

Lynch recommends you target a savings level of between 15 and 20 percent of income, with part in a tax-advantaged account like a 401(k) and part in a taxable account. When you do the math, you can count employer matches to your work savings plans as part of your target percentage.

“If you can save consistently at that level, everything will be just fine,” he said. “Below that level, it is very difficult to be financially successful.”

If you need to increase your savings, Lynch recommends you increase your 401(k) contributions by 1 percent a year until you reach the desired level.

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The post was originally published in November 2017.