Couples, Disagreements, & Emergency Funds

steve4373

Hi all

I’ve worked hard and spent a lot of time building up our families emergency fund to cover nearly 6 months worth of household expenses. However, I’m predominantly a saver/investor type while my wife is more of a spender.

She doesn’t seem to get, or want to get, the purpose of an emergency fund i.e. to act as a buffer incase something bad happens like the boiler blowing up or one of us being unable to work for any reason.

Lately she has wanted to get the garden relandscaped and we both know this will cost a fair few thousand. We don’t have enough money for it at this very moment because she’s been on maternity recently etc. But she’s happy, already decided almost, that we will raid the emergency fund to pay for this. It’s so disheartening to hear her say this and unsurprisingly these differing financial goals (probably next including investing for the future) are beginning to cause a great deal of tension between us

Anyone else having these difficulties ? And how best to overcome them?

Thanks

Dazed_and_confused

If the landscaping includes a new patio then you could reserve space for her under it

Seriously though if you do the finances you could start diverting slightly more into the emergency fund in the expectation that this will help cover some of the extra spending. Slightly underhand but less conformational.

Reed_Richards

You seem to feel that the purpose of an "emergency fund" is as a contingency to replace something you already have like a boiler or (temporarily) an income stream. It is possible to take out insurance against many such events, although you pay for the insurance policies.

On the other hand, your wife regards the fund as a contingency to pay for a large chunks of expenditure.

It doesn't seem fair to save for one thing and not the other so perhaps you can compromise by splitting the fund 50:50, half held back for emergencies and half used on large non-routine expenditure such as home improvements, round-the-world cruises etc. Future savings could be split 50:50 in the same way.

Rheumatoid

I think an emergency fund is more for necessary and unavoidable expenditure. To my mind landscaping the garden is a luxury and should not be dipping into an emergency fund.

fiisch

Having an identical conversation right about now... Just moved into a new house, wife is a stay at home mum with young daughter, and we've recently spent heavily furnishing the new house. Do not have the funds in my eyes to have the garden done without seriously eating into our buffer, yet my wife views this as a necessity.

I concede that having the garden done is more important to her as she's at home more, but our emergency fund is especially important as I'm a contractor so my income isn't guaranteed.

Invariably, in a couple there is one that takes charge of the finances more than the other - for us, that's definitely me, but I'm also one for an easy life, so I can see me having to compromise to maintain a happy wife happy life balance. As suggested, I'd look to see if you can divert extra into the emergency fund (are there other cutbacks you could make, at least on a temporary basis?) to compensate for when you come to raid it, or could the garden be done in stages so that it's not such a big outlay in one hit?

Malthusian

A large part of the point of having an emergency fund is to reduce stress and worry. If the size of the emergency fund is causing stress because one of you thinks you have enough put by to afford some landscaping but the other refuses to spend the money, then it is failing to do its job. Consequently one way to remove the problem is to spend the money on the garden, eliminating the cause of stress. To quote famous economist and relationship counsellor Notorious BIG, less money, fewer problems.

Less glibly, far too many people accumulate a large emergency fund and then never spend it. True, savings that protect against unemployment are still valuable even if you never lose your job, if they remove worry about being unemployed. But see previous paragraph.

How likely is that both of you would be unemployed for six months? Does your boiler actually cost half your year's income? In the worst case scenario where you bought the landscaping and were then both made unemployed, how long would the remaining savings last?

Do you both have life insurance and income protection? What is your pension situation?

Reed_Richards wrote: »

You seem to feel that the purpose of an "emergency fund" is as a contingency to replace something you already have like a boiler or (temporarily) an income stream. It is possible to take out insurance against many such events, although you pay for the insurance policies.

Insurance against a risk you can self-insure against is usually expensive and a bad idea. As the OP has succeeded in accumulating six months' savings, they can self-insure.

Dazed_and_confused

If the size of the emergency fund is causing stress because one of you thinks you have enough put by to afford some landscaping but the other refuses to spend the money, then it is failing to do its job. Consequently one way to remove the problem is to spend the money on the garden, eliminating the cause of stress.

I think that might just be moving the stress from one person to the other!

eskbanker

Malthusian wrote: »

To quote famous economist and relationship counsellor Notorious BIG, less money, fewer problems.

He must have inspired Jay Z to express similar sentiments:

If you're having girl problems I feel bad for you son
I got 99 problems but being rich ain't one

Perhaps I misheard....

Novice_investor101

I'll admit, I would use my cash emergency fund to pay for home improvements. If it was a significant spend then I would stop paying into my (non pension) investments for a while until I'd built it back up again. If it was a small proportion of it then I'd just focus on building it back up again by saving. Worst case scenario is I would have to sell some units in a fund if I had done some home improvements & then an emergency came along the next day....

Reed_Richards

Malthusian wrote: »

A large part of the point of having an emergency fund is to reduce stress and worry........Insurance against a risk you can self-insure against is usually expensive and a bad idea. As the OP has succeeded in accumulating six months' savings, they can self-insure.

I insure my house contents against risks such as fire, theft etc. We don't own anything particularly valuable so if Malthusian's principle is correct I would be better off if I didn't pay for insurance as our savings would cover any replacement costs. However I feel that my contents insurance reduces stress and worry and if something bad did happen then being able to claim on insurance would greatly reduce the stress and worry of the event itself.

MaxiRobriguez

steve4373 wrote: »

Hi all

I’ve worked hard and spent a lot of time building up our families emergency fund to cover nearly 6 months worth of household expenses. However, I’m predominantly a saver/investor type while my wife is more of a spender.

Anyone else having these difficulties ? And how best to overcome them?

Thanks

Sounds familiar bit for me if you replace 'garden' with 'everything'.

Perhaps this won't work for everyone but we've kept our finances separate. We both have our own emergency fund, savings etc. The crux being that if we want to spend on an item together - be it a garden or a holiday - then we contribute proportionally from our own pots based on earnings. I earn twice as much as her, so I contribute 66% and she 33%.

It works quite nicely for us. I have a solid emergency fund and a fair whack of investments whereas she prefers to spend it so has limited monies in the bank, but I consider my assets family assets now anyway so if she ever got into problems I'd just help as what would be the case if our finances were joint. I'm just glad that the larger pot of money is under my sole control so I can make decisions without spending pressure coming into it.