I recently received an inquiry from “Bill”:
One topic I’d like to see Dr. Stanley blog about sometime is in marriage situations where one spouse comes as a balance-sheet affluent and the other is income affluent. I’ll be married in a few months and we’ll be in that situation. I’m an engineer, she’s a lawyer, I have a beatup Camry, she has a BMW, I rave about Dr. Stanley, she tells me to stop quoting him 🙂 . . . . We love each other and are upfront about finances, but I’m wondering if there’s data indicating whether the combined couple ends up BA or IA? Thank you and keep up the blogging + book writing!
My response to Bill was as follows:
It is not unusual for young economically productive couples to own at least one status motor vehicle. But over time I find that SUVs and minivans become more popular and needed as the family grows. I also find a precipitous decline in the number of BMW owners who continue to insist on funding the “ultimate driving machine” after they receive their first out of warranty invoice for servicing/repairs!
BAs are more successful in converting their IA spouses by using the “soft sell” approach and hard data concerning the present and future value of dollars allocated to motor vehicles. Coincidentally I once shared a stage with the head of an automobile company that manufactures high status Eurpoean motor vehicles. He mentioned that brand loyalty among his customers was less than that of housewives’ loyalty to brands of garbage bags!
Postscript: I should also have mentioned that brand loyalty for motor vehicles acquired by millionaires is much lower than most people think. For example, the make with the highest retention rate [45.5%] among millionaires was Chevrolet [see Stop Acting Rich]. This means that of all those who acquired at least one Chevrolet in the prior ten years 45.5% acquired at least one more . . . Ford was a close runner-up at 44.8%.
I think that this question is much broader than car preferences. Marrying someone who has a different spending orientation than you do is begging for trouble. There are thousands maybe tens of thousands purchase decisions that every married couple has to make during their marriage and spouses that are on opposite ends of the spending spectrum are bound to argue. Starting a marriage off wondering if you will be able to convert your spouse-to-be to your thinking on such an important subject should be a major red flag.
I am quite certain that my husband and I are much happier because we are both the same orientation. We are both BAs.
My wife makes 4x what I make. She used to have a leased BMW, but now has a 10 year old Lexus RX300. I used to have a 12 year old Mustang, but now have a 1 year old VW Jetta. As long as she keeps the car for a long time, it won’t matter in the long run. Constantly buying vehicles will keep you from becoming wealthier.
Money disagreements among other things ended of my marriage of 14 years.When we married,we were not in the BA nor IA categories.We were a young couple just out of school and starting a family.Over time,I became more of the BA mindset(in theory),but my husband continued to increase spending as the pay increased.
Simple decisions,like what(where)to eat became huge battles over the spending.When I refused to sign on any more car & RV loans,he found other ways to purchase to the detriment of our family budget.He even over drew our checking account to force me to move money out of savings to cover the bills.The rationale was that he makes the money,so he should be able to spend it,but our combined income was only $60,000.We were on the fast track to bankruptcy & I wanted off.
Fast forward a few more years,the short sale of our house,& 2 attempts of marriage couseling.I had just lost my job due to a company merger.My husband had to cash out all of his 401k to keep from losing his truck.
At this low point it was time for a financial reality check.A business man in our church offered to help with some financial counseling,but my husband refused.A few days later I met for the financial counseling alone.He recommended that I begin separating our finances and set up a new checking account for my unemployment checks & divide the bills.My husband & I fought constantly until he told me that I was holding him back in his life.
A few weeks later,my children & I moved in with my parents.I came into the marriage with nothing and came out of the marriage with a negative networth.It has been 5 years and I have paid off the debts accumulated in the marriage. I am building a positive networth for the first time in my life. I live on a $30,000 a year salary & drive a 11 year old vehicle.I hope to buy a house within the next year. My x-husband owes $6000 in back child support.He moved out of state & keeps changing jobs to keep from paying child support.I pray for him often.
I am not a BA nor an IA,but I am now balanced.Money didn’t seem like an important issue when we first got married since neither of us had any to speak of.Should I marry again,it will only be with a man who is balanced & of a BA mindset.
Dr. Stanley, I’ve read two of your books (Millionaire Next Door & Stop Acting Rich). I felt encourage by the data you presented in them. I’m a fan of you and Dave Ramsey. My goal is to stay humble and live like a real millionaire. I’m not a millionaire by finances yet; however, I’m incorporating their habits so that I will be soon. Keep up the awesome work Dr! I look forward to following your Blog!