Dave Sather's Money Matters: Picking up pennies
Jan. 1, 2013 at 6:03 p.m.
Updated Dec. 31, 2012 at 7:01 p.m.
By Dave Sather
As Carol and I strolled down Main Street on our way to Fossati's for lunch, I stopped to pick up a penny.
It's just a habit. If someone is going to leave money on the ground, I'm going to pick it up.
As I bent over to snatch my newfound wealth, some friends were passing and quizzically looked to see what I was doing.
Carol, ever the smart one, quipped "I'd like to introduce you to my husband Dave Saver - and, of course, that makes me Carol Spender."
Carol loves to change my name from "Sather" to "Saver," saying that it is far more appropriate given my fiscally retentive nature.
As Carol uttered these words, I asked how she got her last name. She laughed that her spending was a matter of national service, diligently working to keep our economy from sliding over the fiscal cliff. Carol then shrugged her shoulders and said one of two things would happen - either she would single-handedly save our nation's economy by propping up GDP or have one heck of a time trying.
I'll make sure to remind her of this conversation when the bills arrive.
In assessing our relationship, we are polar opposites in many ways. Despite this, Carol probably doesn't spend quite as much as I think, and I am not nearly as much of a tightwad as she thinks. I generally buy bigger-ticket items, and Carol seems determined to keep the makers of every kitchen gadget flush with cash.
However, we are like many couples when it comes to spending and budgeting, and over the years it has caused some frustration.
To deal with these issues, recognize that opposites attract. If everyone in the world functioned like I do, it might be a pretty boring place.
And if everyone were like Carol, the world would be colored in every hue of purple, cooking shows would run 24/7 and dogs and cats would run Congress (that last idea is not a bad one).
Despite the differences, we generally have fun making it work.
In navigating the money aspects, put savings first. Most budgets are unrealistic as it is difficult to account for every penny. Our budget starts with how much money we want to save each year. A good number for most people is 10 percent of their gross income, but more is better. That money gets set aside, and we don't touch it. It is truly savings - for the long-term future.
After savings, we split up the bills, making sure there is enough cash to pay them each month. If there is not enough cash for the things we "need," then it is time to start trimming back on expenses.
We have had our battles with credit card balances. The math is simple - if you carry balances on credit cards, you will lose. Credit card companies make tons of money for a reason. Use credit cards in an emergency, or if you are disciplined enough to pay them off each month. We are not the federal government and cannot survive running never-ending deficits.
Once savings and necessary obligations are covered, then you can discuss what to do with discretionary funds.
If there is $100 in discretionary money at the end of a month, I don't care if Carol Spender blows it on another titanium infused, silicon-coated spatula that will survive Armageddon. Similarly, this prevents resentment if I use my discretionary money to annihilate my college friends in paintball.
Like many successful principles, financial management involves executing very simple concepts. However, just because they are simple does not mean they are easy. As such, recognize there are no extra points for making things difficult. Keep it as simple as possible.
Finally, focus on things within your control. You can control and influence spending, saving and income. You do not control the government, the weather or a host of other things. Spending considerable amounts of time on topics beyond your control will increase your blood pressure but do little else.
Dave Sather is a Victoria certified financial planner and owner of Sather Financial Group. His column, Money Matters, publishes every other Wednesday.