Another subtle dynamic at work is spousal relationships. One spouse may have a taste for expensive things while the other acquiesces against their better judgment. They don’t want to be thought of as a “cheapskate.” Or they want to be seen as a good provider. Or talking about budgeting tends to be stressful. And so on.

But then, before they know it, money problems flare up and become an even bigger sore point. It might be better to sit down in a calm fashion and discuss a more rational approach, rather than let things drift.

Canadian Capitalist and his spouse seem to have things sorted out. He is happy to drive a 1992 Honda Accord even though they could easily afford something more impressive. I’m happy to do it in a 1998 Toyota Corolla. Many couples have to get from point A to point B in something fancier, and are willing to take out big loans to get it. The problem is some important financial goals are likely being sacrificed.

What leads us astray is the urge to “keep up with the Jones.” Resisting this tendency is key to saving and realizing financial goals like becoming financially independent, chilkdren’s education, comfortableretirement, etc.