Using Spending Limits To Avoid Money Arguments

by MB on January 30, 2008

Photo: jenn jenn

Terri Cullen, writing in The Wall Street Journal, shares a good technique for avoiding common money arguments: The ‘$500 Rule’.

Here’s how it works: she and her husband have a standing agreement that if she needs to spend over $500, she will check with him first.  Vice versa, her husband will check with her before he spends over $1,000 (he is more thrifty, hence the higher limit).

These pre-existing spending limits allow them to avoid arguments caused by one or the other splurging on a big ticket item.

Terri summarizes the article:

This system gives both of us a sense of control over what we earn, yet forces us to set savings goals and make big-money decisions together. Because our accounts are separate, Gerry and I don’t regularly monitor each other’s day-to-day spending habits. But because of our spending rules, we don’t need to — setting limits on big items reminds us that we’re responsible to each other for the financial decisions we make, both large and small.

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