Cutter Family Finances: The Importance of Setting a Personal Budget


If your New Year’s resolution is to get your finances in order, you are in good company. More than half of all Americans are in the same boat. This was the topic of discussion when I appeared on the Fox 25 Morning Show last week. We also talked about how getting finances in order and creating a family budget can help avoid financial household “bullying.”

After many years in the financial services industry and helping pre-retired, retired and conservative investors, I have found that one of the biggest differences between people who are financially secure and those who are not is oftentimes one thing—a budget. I do not care if someone is a plumber, fireman, policeman, accountant, lawyer, surgeon, teacher, married or unmarried, retired or not; to be financially secure, they need a budget. I do not care if they have 5 million bucks, or 500 bucks; they need a budget. They must have a blueprint, a road map, leading them toward success. A budget can ease financial worries, pay off debt and raise credit scores.

A budget can also avoid “financial bullying.” Now, you may be thinking that almost all couples argue about money, and you are right, but financial bullying is one-sided. A new survey from Credit Karma shows one in 10 Americans in a committed relationship say they are victims of financial bullying. Financial bullies intimidate and manipulate their partners by controlling the household finances. Bullies withhold money, make their partners feel guilty for spending even small amounts of money, and often prevent them from shopping alone. (If you are concerned you may be a victim, take a quiz at

Opening the lines of communication is key to avoiding financial bullying. In addition to creating a budget together, there are four things every couple should talk about.

1) Debt
Debt is a huge issue. Many young people have student debt. People who are thinking about getting married may also have other forms of debt from things such as credit cards, or medical bills.


Because financial secrets can ruin a marriage, everyone should talk about their individual debt before they get married. Being honest and developing a plan together to reduce debt burden is essential to avoiding future problems.

2) Spending Habits
In many relationships there is a spender and a saver. For example, she likes to shop, and he likes to save. She wants to save for a rainy day, and he wants to splurge on the trip of a lifetime. When two people with vastly different spending habits get married, conflict is bound to happen. One way to avoid such conflict is for couples to make a pact with each other that no major spending will take place unless both agree to it. One way to do that is to set a spending limit.

I gave the Fox TV viewers an example. In our house, Jill and I have an agreement that we have discretionary spending up to $500. For anything over $500, we must first talk about it and agree that the purchase is in our family’s best interest.

Sounds simple right? Not so fast.

So, the other night I came home from work and noticed Jill sporting a new pair of beautiful brown leather boots. (If there is one thing I have learned having a house full of four girls, it is to make sure I comment on any new fashion item.) After telling Jill I liked them, I asked how much they cost. Jill’s answer was, “I got them on sale. Can you believe that these were marked down to $495?”

Hmmmm . . . she is always “saving” money and being under the $500 discretionary limit.

So my message to the viewers and to you, Cutter Family Finance readers, is this, make sure you set the right limit for your family because it surely will be tested.

3) Financial Responsibility
Couples also need to work together to determine who will be responsible for specified financial duties. One person may like paying bills while the other person hates it. Or, maybe both feel the same way and they need to take turns. What’s important is deciding who will do what financial chore, and also making sure that both people feel like they’re part of a team and are working together to achieve their mutual financial goals.

4) Investing
Unexpected financial loss can be a considerable source of stress in a relationship. Couples can lessen their chances of significant loss by agreeing on a low risk investment strategy.

Both people in a relationship should learn the questions to ask before making any financial decision. They should ask each other what happened to their investments in down years such as 2001-2002 and 2008. If there were losses, why and what is being done to prevent that from happening again? What is the strategy in place? Managing downside risk is significantly more important than chasing market gains, like so many folks are doing today.

Cutter Family Finance readers know from reading this column that historically our markets go through a correction every five to six years, 2008 being the last. I suggest folks step away from the herd mentality, ask the right financial questions, and implement a strategy that focuses on managing downside risk.

Even if couples don’t see eye-to-eye on all of these areas, that’s okay. The most important thing is that people have the necessary conversations and respect each other’s opinions.

And remember, in 2014 . . . Be vigilant and stay alert, because you deserve more.

Jeffrey Cutter, CPA, PFS is the managing partner from Cutter Financial Group, LLC (, which provides private wealth and investment management through low risk, low volatility successful financial solutions; securing peace of mind. He can be reached at

Investment advice is offered by Horter Investment Management, LLC, a Registered Investment Adviser. Insurance and annuity products are sold separately through Cutter Financial.


No comments yet.
Please sign in and be the first one to comment.