My wife is blowing my salary increase before I get it!

salary increaseIN ONE HAND OUT THE OTHER…

 

We all go to work every day in hopes that at some point we get a raise because a salary increase means we can do more with our money.

What we don’t expect is that when it happens that it’s gone before the money hits the bank account.

Today’s post is from my reader mail bag. I found this question below to be interesting as we are going through something similar.

Just recently I wrote a salary increase letter to my employer because I thought it was about time I got an increase. Some people may shy away from doing this but don’t as you might be waiting forever for a raise.

I am getting one but I’m just waiting for the paperwork to go through human resources, red tape. If you are wondering what I wrote in that letter it was pretty simple, why I deserved a salary increase but not before sharing what I’ve done for the organization over the past year.

When you find out that you are accepted for a salary increase it makes you proud knowing that your hard work is important to the organization. I can’t imagine going through what my reader is going through so I hope we can help him out today. Although we are happy to have extra money coming into the CBB house like all of our income we must budget.

Now that we are mortgage free that doesn’t mean we can go and blow my salary increase. We are heavily investing in our retirement savings but to balance that we are saving for a trip back to the UK.

A CBB fan writes in to Canadian Budget Binder sharing his story looking for tips from all of us on how to handle his situation.

Dear Mr.CBB,

Thanks for a great blog as I’ve been a fan for a long time. I was one of those fans who didn’t budget until I realized after reading your story how important it is.

I was always someone who wanted to be debt free and have no mortgage by the time I was 40 but that doesn’t seem to be happening. Lately my wife has been spending money without care even though she knows we can’t afford for her to do this. I don’t know if it’s because she’s not used to our new budget but we did use your free budget (thank-you) to try to manage our expenses.

Just recently I was due for a salary negotiation with my employer and I received a pretty substantial increase along with a new role. I’m now making 6 figures a year just over $100,000 and my wife earns just over $60,000 a year. As you can see we make a good living but are living pay to pay as we have credit card debt, vehicle payments and our mortgage.

When I announced to my wife that I had received almost a $15,000 salary increase (note: salary increase 2015 not right away) she started spending money going to the mall often returning with lots of bags and saying we needed to get renovations done around the house. The house is fine but she wants to update the updates which I just finished just 2 years ago.

How do I get my wife to understand that the money must be budgeted and we have to pay ourselves first including our credit card debt?  Thanks for any help.

-Anonymous

This is always a popular question because budgeting is not always easy for those couple’s who have never used a budget before. Most people get used to spending money without a care in the world or like I used to do by making sure I wasn’t spending more than what was in the bank account. This wasn’t the smartest way for me to save money but it did work to a certain extent.

I never did ignore any debts that I had but how many of you think of paying down your mortgage, buying more retirement investments, adding to your child’s education fund etc. when you get a raise? I’m betting that some of you think about going on vacation, getting new toys, clothes, jewellery all the things we call, stuff.

Many people feel entitled to buy stuff because they work hard and we should be able to buy nice things if we can afford it BUT we still must follow the budgeting system. You can’t put a budget together and not use it to full capacity. Why bother wasting your time.

I can’t understand first-hand how this reader feels as my wife and I are on the same page when it comes to our finances but what I do know is if they don’t get a handle on it they will watch more debt come rolling in.

I’m not a relationship expert by any  means but I do listen to my wife and she listens to me and we work as a team to make our finances and relationship work. What does all this mean in a nutshell? Communication, because without it you have no relationship.

Below are a few tips I’ve put together which seem to work well for us.

 

Communicate

 

Mr. Anonymous I’m sorry you are going through this and I can understand how frustrating it must be to watch your money disappear before you get a chance to enjoy watching the numbers work for the both of  you. It sounds like you may be on a different page than your wife financially so it’s important to find a balance so you both don’t end up on different pages all the time. This can be frustrating for any relationship.

My advice to you number one is to sit and talk to you wife but not without a plan first. You can’t just hope that everything you say is going to make sense to her. All she might hear is ” I don’t want you spending all of our money” when that isn’t the message you want to get across to her.

 

Visualize and Strategies

 

Without seeing a vision on paper or in this case the budget and goals for both your incomes it will be tough for your wife to understand just where you are heading with the money you both net.

You have to remember to listen to her as well because it’s not a one-way street when it comes to love and money. You don’t want her thinking that you are the boss and are telling her what she can and can’t do.

There’s nothing wrong with giving each other an allowance each month to spend as you please. If you incorporate your new salary increase into the budget you will see just how much money you can allocate to the allowance category.

If the both of you want to retire early, pay off your mortgage or get rid of any debt it’s critical that you both talk about it and plan your pay-down strategy together. If you are both on board this will make budgeting so much easier.

 

Walk the talk

 

If you are going to sit with your wife to go over her spending habits and why you want to take your new salary increase into consideration for your family budget you have to do the same.

You can’t tell her that she can’t run out and spend $300 at the spa then turn around and walk through the door with piles of new tools for your shiny new toolbox in the garage. Money and marriage is the same and both require a commitment to make them work.

 

Hiding Money

 

How many times have you heard someone say I’m going to hide a purchase because if my spouse finds out he/she will be upset. It happens more often than you think and it’s because of a disconnect with finances and the budget. Some folks feel the budget is too strict and doesn’t allow them enough money freedom in the relationship.

If you don’t get on board with your money and fast don’t be surprised if one of you starts hoarding money for fear it might disappear. It might sound funny to some of you reading this but I know a couple who are still married and in love but they just can’t get their money act together.

The husband is scared that they will have nothing left to retire on and his wife doesn’t get the whole budgeting system so he hides money. It’s not right to do this and he knows it but he feels he has no other option since she just wants to spend money when she feels like it.

You don’t want to get to this point so do your best to be open about creating realistic goals and a budget that isn’t so tight that it leaves you both screaming for more money.

 

Spend Less than you earn

 

Not everyone can grasp this simple concept and one that I stand by here at CBB. If you haven’t earned the money yet from your salary increase why is she spending more money on things you both can’t afford? That’s exactly the question you keep asking yourself and why you are writing me today. Only she can answer that for you.

Many people think they will pay for “stuff”with money they will eventually earn but this is how the debt cycle begins.

It sounds to me like your budget is in place but not working for the both of you. Whether you need to make changes to the numbers or explain to your wife more about why it’s important not to create credit card debt and the high cost of interest is what you must figure out.

If you talk about what you both want for the short and long-term this might help. If she wants to have a lavish retirement you might have to bring her back to reality because without x amount of dollars invested in your future then your retirement might be going to the local coffee shop or short road trips close to home.

Reality is hard for some people until it hits so don’t make the mistake and wait until it’s too late to put the money you earn to work for you. So my friend this is what advice I have for you but I’m sure the fans might have some other tips to help you out.

Thank-you for writing me and sharing your story with all of us. Best of luck with your wife, congrats on your salary increase and I hope your money dreams come true.

Mr.CBB

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