I had an argument with a female friend the other day and she has a theory that the divorce rate is so high these days because there are more women in the workplace now than in the last few decades.
Before I go any further with this article I want to say that I have no problem with women in the workforce and I’m not trying to start up a controversial post, but at the same time, the argument itself is pretty intriguing.
Related: Are Financially Independent Women A Turn On
Is Dual Income The Best Thing?
Back in the day, the man of the house was the breadwinner. The wife would be the stay-at-home-mom, take care of the kids and have supper ready when the husband got home along with all the other stereotypes that feminists hate. With more women in the workforce today, the household chores now have to be split up and there is bound to be more stress on relationships because of it.
If both parties get home at six o’clock in the evening and both are too tired to make supper, what happens? Do they fight about it, or do they just order take out? What about taking the kids to hockey practice or making sure they get to bed on time? What happens if one parent has a rough day at work? Having a dual income definitely has its costs.
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My Experience
In my family my mom is a nurse practitioner and she works long, hard days. My dad, on the other hand, argued that his days were always harder since he is a farmer. Technically he was the stay-at-home dad, but with four sons he had no shortage of help on the farm.
Our household was always busy and since there’s an eight year difference between the oldest brother and myself, we did most of the chores and my parents didn’t have to worry too much about the constant arguing over who was going to do what.
My girlfriend’s family is a totally different scenario. Her mother was a teacher until she had her first child, and from then on she was a stay-at-home mom. Her father was also a teacher, but at some point he began to farm during the summer and teach at the university during the winter (not a bad gig by the way).
Her mother works hard by making sure everyone’s needs are met in the household. I actually get overwhelmed because she rattles off 20 questions at me to make sure I’m fed and comfortable and warm enough and anything else to make sure my stay there is a good one. At the end of the day, this family is very happy one and the marriage has gone on for over 30 years.
Generation Y’s Family Dynamic
Much can be said about women in the workplace but when you take away the stay-at-home parent, the family dynamic has to change. The simple fact is that one parent is no longer spending all day at home making sure everyone’s needs are met. The families where both parents work and still manage to provide the same quality of life as a stay-at-home parent does usually has a pile of added stress in their relationship. How could it not?
Related: How To Survive And Thrive As A Single Income Family
This is probably the reason many families these days have one or two kids instead of four or five.
Readers, what do you think? Does today’s working world put stress on the “traditional family”?
Justin Bouchard is a co-owner and writer for My University Money as well as Young and Thrifty. Together they provide saving advice for Generation Y and try to get you through school debt free.
The conventional wisdom in relationships is that opposites attract. It seems very common for a compulsive spender to hook up with a compulsive saver.
Research shows that men are nearly three times more likely to be tightwads than spendthrifts.
In my family it’s just the opposite. I’m the saver and my husband is the spender. Two more opposite people you would never meet. He always wants to buy something new and it seems he just can’t rest until all his available funds are gone.
Lately he’s been on a kick about getting a new barbeque. Our current one is about twenty years old but I think it works just fine. He thinks I’m a crazy miser lady.
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I believe we are born to be either spenders or savers. Siblings who grow up in the same household – whether frugal or affluent – can have totally different perspectives when it comes to money.
For example, if a favourite store offers a 50% off sale, the spender says, “Good, now I can buy twice as much.” The saver says, “Great, now I will only have to pay half as much.” It’s how we view life.
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Spenders often felt deprived as children. They may be seeking acceptance from their peers. They may think that because they work hard they deserve to go out, take expensive vacations, and buy nice things (often useless) for themselves and also for their friends and loved ones. They have a natural propensity to acquire and consume.
Unfortunately, spenders also tend to be quite wasteful. Who cares if you throw away produce that’s gone bad or if the water bill is higher this month.
I grit my teeth when I see my husband ripping off half a roll of paper towels to wipe up a spill.
There’s a lot of information available for spenders to help them change their ways and become more careful, reasonable and responsible with their resources, but not much is said about savers. I guess it seems to be more of a virtue, but compulsive saving can be just as destructive.
Related: Voluntary Simplicity
Savers pay themselves first, look for sales, research the cost of items, save a little each month to pay for a large purchase, and consume only as necessary. These frugal activities are commendable but it is possible to analyze potential purchases too much. Some savers are so bent on never spending that they make themselves and everyone around them miserable. That’s no more noble than overspending.
Feelings of enhanced security from not spending any money, or by doing without things that others might consider necessities is not conducive to a full and happy life. Why don’t you think you deserve nice things?
We always read about people who live a sub-poverty life, wearing ratty old clothes, eating the cheapest food and not turning on the heat. When they pass away it’s discovered that they have several hundreds of thousands of dollars (if not millions) stashed away that they never touched. They were just too afraid to spend.
Women especially have the “fear of becoming a bag lady” syndrome, but with a well thought out financial plan and a realistic budget it is most unlikely to happen.
Related: 10 Ways For Women To Achieve Financial Empowerment
The saver/spender combination in a marriage is actually ideal. The spender makes sure that the family has nice things and does fun activities together. The saver makes sure there’s money to support the lifestyle now and in the future. Natural tendencies don’t have to rule our lives and cause problems.
It takes a bit of effort to create a balance provided we know how to communicate and strike a compromise when it comes to the management of household funds.
As for our barbeque purchase, my husband sold some unwanted items on Kijijii, researched his options and finally bought one he was happy with.
On the upside, he has been happily grilling away, preparing supper every evening. On the downside, he’s been perusing the booklet that came with the grill. It has about three pages of accessories that are “must haves” and he’s getting that look again. Oy vey!
Wayne Manderly recently separated from his wife after 30 years. He lives on a very small CPP disability pension of $745 a month. Part of the separation agreement means Wayne receives an additional $320 a month in support, bringing his monthly income to $1,065.
After selling their mortgage-free home, Wayne moved in to a townhouse that he rents for $1,125 a month, plus hydro – which could cost as much as $250 in the winter.
Wayne’s share of the house proceeds was just over $125,000. He knows he needs to top up his income if he wishes to stay in the townhouse, but he can’t buy a home and the other rental alternatives were not in good shape. He doesn’t own a car because he’s concerned about buying a lemon – plus the insurance and maintenance will only add to his monthly expenses.
Right now, Wayne has the pharmacy deliver his medication at no charge and gets his groceries delivered whenever possible. He’s in a tough financial situation with very little money in the bank, although he doesn’t run up credit card debt or have any other debt other than his monthly bills.
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Income:
- Canada Pension Plan disability benefit – $745
- Spousal support – $320
- Total = $1,065
Expenses:
- Rent – $1,125
- Hydro – $150 – $250
- Groceries – $150
- Rental Insurance – $15
- Total = $1,440 – $1,540
If Wayne stays in his current rental, he’ll need somewhere between $375 and $475 a month to top up his income and cover his monthly expenses. And that still leaves things pretty tight.
Related: How To Make A Better Personal Budget
The professional advice?
Wayne wrote to me and asked what he should do with the $125,000 house proceeds. His financial advisor suggested he put some in stocks and the rest in a monthly income fund, because GICs are only paying 2.3%. He said the returns are much better on stocks and that he will get 4 – 5%.
“I don’t feel comfortable with this plan, but how do I tell him that? All of my money and accounts are with this bank”, said Manderly.
When I read Wayne’s email I felt really disappointed in our financial industry. Here we have someone who clearly has a low tolerance for risk and can’t meet his monthly expenses on income alone. And the financial advisor wants him to put his life savings into stocks and mutual funds?
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I’m sure we’ve all been in a situation where a pushy salesman tries to bully you into buying what they think is best for you. It’s unfortunate that some financial advisor’s make their clients feel this way about their own money.
Here’s my advice to Wayne:
This is a tough situation since your housing expenses exceed your income before you even buy groceries and pay for renter’s insurance and transportation.
- Is it possible to get a part-time job to fill-in the gap between expenses and income?
- What about finding a roommate to share rent and utilities?
Related: How To Save Money On Groceries
You need income from your $125,000 investment and unfortunately stocks are much too volatile. You don’t want to risk your life savings in anything but a guaranteed investment vehicle, like a GIC.
Your financial advisor probably thought you should buy a monthly income fund, which isn’t a bad idea but it’s not suited for your risk profile. They should know this, but sometimes advisors prefer to push their own investment products that pay higher commissions. Be very careful.
Your risk profile describes how comfortable you are with investing your money. Low risk tolerance means you’re not at all comfortable with stocks.
You can set up a GIC ladder, splitting your investment over a variety of terms. If, for example, you have $100,000 and want to invest in GIC’s, you would put $20,000 into terms of 1, 2, 3, 4 and 5-years.
Every year you will have some money coming due that you will invest in a new 5-year GIC. And since the interest rate is higher for 5-year terms you will always be re-investing at the highest rate. The best 5-year GIC rate is currently sitting at 3.1% (Outlook Financial, Achieva and AcceleRate Financial).
My advice is to put $100,000 in the GIC ladder as I described above, and keep $20,000 in a high interest savings account.
Then take the remaining $5,000 and keep it in your chequing account, which can be used as a cushion in case your expenses are a bit higher one month. The high monthly balance will also waive any monthly chequing account fees that your bank charges.
If you’re not comfortable with your advisor, then you need to walk away. It sounds like he wants to sell you products that you don’t need.
Use a different bank to help you with your GIC ladder plan – they can help you transfer the money from your bank.
Once you set up the GIC ladder you will have money maturing every year (no monthly income, though).
You can use your savings account to top up your monthly income for about 5 years and then you’ll have to replace that money.
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At that point I’d suggest taking one of your GIC’s – when it matures – and rolling it into your savings account to top that back up to $20,000
Financial advisor for a day
Does this sound like a solution that can work for Wayne? He’ll be living pretty tight from month-to-month, but at least this gives him a plan for the medium term future.
What kind of advice would you suggest for Wayne? Could you live on $1,065 a month?