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Dear Quentin,
My wife and I enjoy two week-long vacations a year to the local seashore, and we generally live well within our means.
I’m convinced we can afford a new-car payment, but my wife is convinced it will break us, and that’s a problem. I’m 45 and my wife is 43. My wife and I make a combined income of around $220,000 per year as professionals, which puts us comfortably in the middle class where we live. We’re very lucky to experience virtually no financial strain, even with the odd unexpected expense.
Our cash flow is, in my opinion, pretty good. We typically have between $10,000 and $14,000 in a checking account at all times, and a modest amount put aside for retirement. We’re still building that, and we plan to start 529s for our two young children and envision state university for them, if anything.
“‘By mutual agreement, I get about $400 a month in a separate “mad money” checking account that’s all mine.’”
We have less than $10,000 in debt with no problem paying it down, although we keep separate revolving credit accounts. Most of our paychecks go into the joint account. From there we pay our $1,400 monthly mortgage, our sizable family grocery bill, our car and insurance payments, other bills, etc.
By mutual agreement, I get about $400 a month in a separate “mad-money” checking account that’s all mine. This is money I can spend as I see fit on my many hobbies, R&R, the odd concert or night out with the fellas, anything. This goes a long way toward ensuring domestic tranquility. I’m not sure if my wife keeps such an account, but I certainly wouldn’t begrudge her that. I trust her implicitly.
Larger purchases from the joint account are openly and regularly discussed and, when significant, must be agreed upon.
So, while life’s not perfect by any means, it ain’t half bad. We’ve worked hard to build a comfortable, relatively secure life for our family. If we’re not far ahead of the curve, we are outrunning it by a nose and, despite macroeconomic clouds on the horizon, our long-term prospects look bright.
Domestic tranquility
I currently drive a bit of a clunker, for which I pay about $130 a month, and I’ve lately entered the market for a new car. This has shaken our domestic tranquility. I’ve fallen head over heels for a small performance sedan. It’s eminently practical — there are no real luxuries included, there’s plenty of trunk space for groceries and a roomy back seat for the kids. It just happens to go blisteringly fast when you put the pedal all the way down.
After a decade-plus of driving the automotive equivalent of a plateful of boiled spinach, the new car has captured my imagination. Reports suggest the car is reliable and no more or less expensive to service than our current rides. To boot, I have an insurance quote in hand that’s a little less than what our household pays now.
“ ‘The car will ultimately cost — including interest, fees, etc. — about $40,000, though I may do a little better.’”
The car will ultimately cost — including interest, fees, etc. — about $40,000, though I may do a little better. Monthly payments would be in the neighborhood of $500. I’m also open to the idea of leasing and then buying the depreciated car at the end of the term, if that would mean a lower monthly payment.
When I ran this past the missus, she went ballistic. She said there was no way we could afford it and all but put her foot down.
Then things got weird. She pointed to the fact that her parents still give us money and implied we wouldn’t be able to make it without those handouts. The truth of the matter is we did need them, years ago, as we were getting established in our careers. They have given us cash gifts lately, and we’ve certainly put the money to good use, but they’re doting on us, spending down their nest egg for some arcane tax purposes. It’s a lovely gesture, but my wife seems to feel it’s some critical lifeline without which we’d be skint.
You could always be richer or more secure, but a look at our accounts and cash flow tells me we are plenty liquid.
I’ve consulted various calculators, run minimum/maximum scenarios in my head and considered conventional car-buying wisdom, and it all suggests we could afford a car payment of more than $1,000 per month on my salary alone (not even considering her $90,000 yearly salary) without being irresponsible. I’m looking to spend, at the end of the day, a low single-digit percentage of our monthly income on an essential — an essential that I happen to really want.
Offers and counteroffers
My wife seemed to arbitrarily pick $400 as a hard-and-fast monthly limit for a car payment, after a down payment of $1,500 plus my trade-in — which would be about $6,500, all told. That is very likely to come up short where this car is concerned.
I’m preparing to come back to her with what I think is a heck of a good counteroffer, literally the best I can do. I can abide by the $6,500 down payment, and I will offer to put my entire $400 monthly mad-money stake toward the regular payments. After all, it’s money I use for pure enjoyment. That would leave the common household purse on the hook for a little less than the $130 we currently pay for the clunker.
I’m not optimistic my counteroffer will be well received. She has suggested my $400 monthly perquisite was “our money, too,” although we’ve never, ever treated it that way. I feel as though she has some anxiety that isn’t borne out by the financial realities of our situation, at least as far as I can tell. When I try to probe a little deeper into the anxiety, I get “we just can’t afford it.” In fact it’s almost as though we’re living in two separate realities.
“‘It’s not as though I’m eyeing up a Bugatti — it’s a Hyundai! I’m really afraid I’ll grow to resent her if I end up missing out on this car.’”
How can two married people look at the same accounts and draw such dramatically different conclusions? Could I get a cheaper car? Absolutely. Do I want to? Hard no. I’ve tried to make my position clear about how much I really, really want this car.
I also feel as though offering to sit down and go through every line in the household debt/credit ledger will end up being extremely unpleasant and perhaps start another fight. It’s almost as though she doesn’t want to be questioned on this issue, yet she has failed to prove to me that a $500 car payment would be the end of us. Is it up to me to prove it wouldn’t crush us?
I’m not a person who always has to get their way. If I can tell it means more to the other person to get the longer end of the wishbone, no problem. I’ve never been one to walk away from compromise, but in this case I suppose I feel I shouldn’t have to compromise.
That said, if I thought for a second that this car payment would put us in tough straits, I’d drop the idea. In fact, it never would have occurred to me. It’s not as though I’m eyeing up a Bugatti — it’s a Hyundai!
I’m really afraid I’ll grow to resent her if I end up missing out on this car. Am I the one being unreasonable? Wouldn’t anyone feel bitter to have to give up something they dearly wanted that, in all likelihood, they could have easily obtained but for their partner’s intransigence and ill-defined, unfounded anxiety? While I know material things can’t bring ultimate satisfaction, I’ve been around the block enough times to know that enjoying yourself in this life, once you’ve taken care of your responsibilities, counts for an awful lot.
In Love, Over a Barrel and Out of a Car
Dear In, Over & Out,
I like boiled spinach. It’s healthy, it’s cheap and it has nutrients that get me where I want to go.
Material things don’t bring happiness — you’re right about that. But they can bring a lot of trouble and strife to your marriage. I agree that you can probably afford the car, but I’m on the fence as to whether this is the best moment to insist on buying it, and whether the car is worth the price you will pay for pushing this purchase through against your wife’s wishes.
You say your wife is displaying intransigence and an ill-defined, unfounded anxiety. But there are two of you in the driver’s seat here. You too are displaying signs of intransigence and an ill-defined, unfounded persistence. It’s a car. It’s a nice car. It would give you a nice feeling to rev up the engine in the morning, tool around town and go for long country drives.
But this is not about the car. The car has become a symbol of your different communication skills — or perhaps they are too similar in their “it’s my way or the highway” stance. You earn $130,000 a year. Your wife earns $90,000. The car also represents your approaches to money: Your wife is more cautious, you are more gung-ho.
“‘The car has become the perfect symbol of your different communication skills. It also represents your approaches to money.’”
There’s a big gap in your salaries and outlooks, which naturally result in you having different concerns when it comes to saving for retirement, investing, preparing for your children’s education with 529 plans and having enough money set aside so you can enjoy life. That $400 mad money is a red herring. What will you do if you buy the car? Never go to another concert again?
It’s not up to you to prove that $500 a month in car payments won’t crush you financially. You — both of you — are treating this like you are in a court of law. It’s not like your freedom depends on you being right. But I wonder what other things depend on you or your wife being right. Some suggestions: pride, willfulness and the feeling that if you lose this battle, you lose the war.
So put the car aside. Let it go for now. There will be other cars, better cars, cheaper cars, more expensive cars, fancier cars, faster cars, bigger cars, more beautiful cars, shinier cars. There are always other cars. But you only have one wife. And she only has one husband. So I implore you both to stop hanging on so tightly, exhale and talk about what’s going on under the hood.
“‘There will be other cars, cheaper cars, more expensive cars, fancier cars, faster cars, bigger cars, more beautiful cars, shinier cars.’”
Allow me to be a remote mediator here by suggesting that showing humility and being the first to say, “OK, let’s park this for now,” is a show of strength. It will let all the air out of the argument — that’s the last car reference, I promise — release the tension and allow you to talk about your concerns. They may be both financial and emotional.
About the former: The money you have received from your in-laws, whether or not you need it anymore, was to given you on a sound financial footing, and your wife may, rightly or wrongly, perceive this $40,000 expenditure as an insensitive move given that previous financial support. What’s more, $40,000 is nearly half of your wife’s annual salary. It’s a bigger sum of money for her.
You have stated that this particular car is an “essential.” That’s not necessarily the case. There are many compromises you could make, if you felt the need — for instance, you could step up from your current car of boiled spinach to some secondhand arugula. You say it’s a “hard no” for a cheaper car. I gently urge you to be more realistic about how you define this purchase and about “hard no’s” in general.
The U.S. Federal Reserve raised interest rates for the 10th consecutive time earlier in May, so even with a good credit score, it’s arguably not the best time time to take out an automobile loan. If you bought this $40,000 Hyundai with a 10% ($4,000) downpayment and 4% sales tax, and you paid a 6.2% interest rate, you would be saddled with approximately $670 in monthly payments, not including any other fees. That would increase if you did not have an excellent credit score.
You also have $10,000 in credit-card debt. Americans appear to be having trouble paying off their credit cards these days. Credit-card debt in the U.S. is nearing $1 trillion, and for the first time since 2000-2001, in the aftermath of the dotcom crash, credit-card debt did not fall between the fourth and first quarters. That could be a sign of an impending economic downturn. Pay off your debt first.
A higher car payment today may not put you in financial straits, but it may put your relationship in dire straits. There’s a lot of pride on both sides here and a sense that if you lose this one, it will set a bad precedent. Is it an underlying test of who controls the purse strings, or who is the most intellectually agile, or who is the financial whiz who will get their own way?
You write that you will grow to resent your wife if you miss out on this car. A new Hyundai vs. the state of your marriage? Close your eyes and go back to a simpler, happier time: your wedding day. Think of the disproportionate weight that your statement carries. You are “convinced” that this car is a good idea, and your wife is “convinced” it is not. That’s two too many people being convinced that they are right. This car debate has become bigger than both of you.
I’d rather you park this sedan than have your ability to listen and communicate effectively in this marriage end up as roadkill.
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“You say your wife is displaying intransigence and an ill-defined, unfounded anxiety. But there are two of you in the driver’s seat here.”
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