M is for money.
It seems that, every where I looked before Christmas, people were talking about budgets and budgeting. The BBC ran a series of the Money Programme looking at people and money. Channel 4 ran a Christmas Special episode of Superscrimpers as well as The Ultimate Guide to Pennypinching. We recorded most of the episodes and have caught up over the last week.
The BBC Money Programme series started with an episode about people paying hundreds/thousands of pounds to attend wealth seminars, in the blind hope that they'll discover some big "secret" that'll make them rich overnight without putting in some hard graft first. The people profiled missed the big irony - that the real secret behind wealth seminars is in the income they generate for the organisers a.k.a. "wealth counsellors" and not in the information they're presenting to their audience. (That is a rant for another day.)
What was more interesting to me were the second and third episodes: the second episode was about couples and the conflicts money (or lack of it) causes; the third profiled several families where their combined, after-tax income was £40,000. In each, the couples talked about their budgets and their attitudes to money. The couples episode, in particular, included questions about whether they ever talked about money to each other, how they rated the other person's attitude to money, etc.
Some really stuck in the memory. For example, I don't rate the longevity of the marriage of the legal secretary who despised her NHS-employed, research scientist husband's income for being too low at approximately £31k. He has a PhD and is working on potentially life-saving research but science doesn't pay in this country (frankly, if he was married to me, I'd be really proud of him for the work that he does and not care about his salary). Her opinion, though, was that he is failing as a husband because he would not keep her and her children in the manner to which she'd liked to be accustomed. According to her, he was "tight" with money. It was obvious that she compared him to the lawyers for whom she worked, who earn a lot more than he does and who probably have stay at home wives, kids at private school, etc. They only married because she got pregnant within 6 weeks of their first date and didn't have a "money conversation" until long afterwards.
(Incidentally, the obvious money-earner has never seemed to occur to
her: studying law and persuading her employers to back her. Or as DH put it, "Stop moaning about your husband's income and work out a way to earn some more yourself".)
One of the eye-opening points of the show, of all these shows really, is that many couples never talk about money. Oh, they grumble about each other's spending and how much things cost, but they never really talk about money. Or about what they want it to do for them. That is what a real money conversation should be all about: goals. It's about determining what you want out of life and how you will get there. It's also about working out how you will pay for it. For a couple, it's about give-and-take, determining what is jointly a priority and what they'll sacrifice to get there. It shouldn't be about one person giving all, while another take-take-takes. Both partners need to pull their weight.
Really, that is what budgeting should be all about. Sitting down with your partner and determining what you want out of life, what it's going to cost, how long it will take to get there and how much you'll need to set aside from each pay-cheque in order to pay for it in the long run. Then when the priorities are settled, you need to work out together how you're going to have a good quality of life from the money that remains. The aim is to have a champagne life-style on a beer budget without going into debt to support it, while setting money aside to work towards your goals.