When a Spender Marries a Saver He likes to splurge on cars and boats. She's an investment junkie. But all's not lost -- our panel suggests compromise.
By Suzanne Seixas

(MONEY Magazine) – Cruising to a stop after a trial spin in a 1985 silver four-door BMW 535i, Joe Neal pats the dashboard and declares, ''I want this -- it's comfortable, quiet and smooth-driving. And at $15,000, it's in our price range.'' To which his passenger and wife Brenda responds, ''Paying a lot for a depreciating asset like a car is wasteful. I'd rather build a house.'' The couple exchange looks and chuckle. Then Joe turns to the waiting salesman and states the obvious: ''We haven't come to total agreement.'' The Neals leave arm in arm but still arguing. As agricultural researchers at Cornell University in Ithaca, N.Y., Joe, 32, and Brenda, 30, earn a comfortable combined income of $56,400. But after four years of marriage, they are good-naturedly resigned to disagreeing on what to do with it. Down-home southern in speech and manner -- Joe is from Georgia, Brenda from North Carolina -- they discuss their differences in easy, joshing banter. Brenda describes Joe as ''Mr. Vacation, always ready to drop a bundle on fun stuff like trips and sailboats,'' such as the 22-foot, 1985 Catalina they bought three years ago for $9,750. Joe replies, ''Brenda's full of schemes for investing. To me, that's risky. I'd rather keep everything in the bank.'' To which Brenda teasingly responds, ''Where it's easily accessible.'' Luckily, the Neals' different approaches to money have not jeopardized their finances -- they enjoy a solid $100,663 net worth -- or their marriage. Recently the Neals' differing money-management styles -- Brenda stressing investment, Joe accumulating cash that they might later spend -- have come into conflict over Brenda's latest financial brainstorm, a $16,200 venture in strawberry farming. She started it in the fall of 1988 by clearing an acre of land 15 miles from the Cornell campus that she leased from a farmer for $254 a year. Now the Neals are pouring all of their extra cash into the enterprise -- money that used to go into the bank at a rate of $800 a month. That worries Joe. ''What if our farm profit projection of $7,000 this year is too rosy,'' he frets, ''and we end up losing money?'' Brenda retorts, ''I'm willing to risk that, to build an emergency fund.'' Joe and Brenda would like to gain a better understanding of their money conflicts. ''We don't talk a great deal about our differences,'' says Joe, ''and we rarely have heated arguments. But it's clear that Brenda is fascinated by ways to invest money. She gets frustrated when I resist her ideas, but I'm an old-fashioned guy who likes the cash on hand.'' Says Brenda: ''Joe feels more secure if he doesn't have to think about money -- investing matters less to him than to me.'' The couple generally reach a consensus after Brenda's persistence wears down Joe's objections to her suggestions on saving or investing. Yet the little endurance tests can work the other way too. ''I agree to Joe's spending notions when it's clear that I'm arguing against them without getting anywhere,'' she says. Giving her husband a playful nudge, she adds: ''I'd be very interested in what a family therapist thought of us.'' Psychologists, sociologists and financial planners all say that money disputes like the Neals' are far from rare. Indeed, MONEY's own ''Americans and Their Money'' survey in 1986 revealed that finances are the most common source of household arguments between married couples, far outstripping haggles over children, chores and even in-laws. And according to American Couples (Pocket Books, $12.95), a landmark 1983 study by sociologists Philip Blumstein and Pepper Schwartz, married partners fight more over how their money is spent than about whether they have enough. Olivia Mellan, a Washington, D.C. psychotherapist who is one of a handful of practitioners in the new specialty of money psychology, points out that the Neals resemble countless husbands and wives. ''The spender is often married to the hoarder,'' she says. ''And the risk-avoider, who likes safe and sure saving, will have a risk-taker spouse who loves adventurous investing.'' In terms of life style and means, the Neals are typical young marrieds. Their chief asset is the three-bedroom ranch house in Freeville, six miles from Cornell, that they share with Buck, a two-year-old golden retriever (Brenda, eager to start a family, calls the dog ''my practice child''). They bought the place three years ago for $62,000, aided by a gift from Joe's family to cover a down payment and closing costs that together came to 10% of the price. The Neals estimate that their home -- tastefully landscaped with - trees that the couple rescued from experiments at work -- has appreciated along with local property values to $92,000. But their adjustable-rate mortgage has also risen from 8.5% to 11.4%, boosting their monthly payments from $629 to $753. ''We should refinance,'' says a disgruntled Joe. Brenda would prefer to build a new place and has even picked out a site on a nearby knoll of farmland. ''It's 10 acres,'' she says, ''so we could keep five for ourselves and sell the rest in lots.'' Answers Joe: ''There's another one of your schemes.'' ''Plans,'' she corrects. Joe is the main breadwinner, drawing $39,000 a year as an assistant professor of weed science. His time is split between conducting research and traveling around the state giving weed-control advice to owners of golf courses, cemeteries and athletic fields as part of Cornell's Cooperative Extension program. He earns another $400 or so speaking at seminars on turf- grass management. The only investment Joe has made on his own is $76 a month for a whole life insurance policy that will be paid up in 20 years. Currently, the benefit guarantees Brenda $50,000 at his death. Brenda, a research support specialist who studies plant diseases, earns only $17,000. But thanks largely to her investing, the Neals have a $36,633 nest egg. More than 80% of it is earmarked for retirement, including $22,702 in Joe's account with the Teachers Insurance and Annuity Association-College Retirement Equities Fund. It is divided evenly between a fixed annuity, recently earning 9.25%, and a stock mutual fund that for the first eight months of 1989 returned 26%. All of Brenda's $5,289 TIAA-CREF account is in the annuity. ''But that's because I began contributing right after the 1987 stock market crash,'' she explains, ''and I haven't yet switched into the better-paying stock fund.'' More characteristically, she keeps the couple's $2,367 Individual Retirement Accounts in the growth fund Fidelity Magellan (up 33.5% for 1989 through August). And she has just persuaded Joe to join her in opening supplemental tax-deferred-annuity retirement accounts at work. He contributes 5% of his salary, posting his deposits to Fidelity Magellan. ''I wanted him to make it 10%, but he thought he'd miss having the money to spend,'' says his wife. ''She thinks I'm holding back to splurge on frivolous things,'' Joe replies, ''but the farm expense has me worried about coming up short on the monthly bills.'' For diversification, Brenda puts 7% of her earnings in the less aggressive Fidelity Equity-Income fund, up 23.4% through August.

The Neals want to build the rest of their portfolio into a stash big enough to meet emergencies and the costs of parenthood. ''I'd like three kids,'' says Brenda, ''because if there are only two, I think each parent chooses one as his or her favorite.'' She hopes to have her first child in the winter of 1990-91. Yet the couple's current reserves total only $6,275, including $3,500 divided between the Alger Money-Market fund (recently yielding 9.4%) and the same company's superhot small capitalization stock fund, up 63.7% for the eight months through August. The Neals' other holdings are in bank deposits: a $1,000, one-year CD yielding 8.2% and a $1,100 passbook account that pays 5.25%. They also own 100 shares of the electronics technology company Energy Conversion Devices. But that investment has dropped in value from $875 when they bought it last spring to $675 recently. ''A broker talked us into buying that company without knowing much about it,'' says Brenda. Adds Joe philosophically, ''Well, we learn from our mistakes.'' The couple hope further contributions to their reserves will come from the revenues of Brenda's strawberry farm. She began it expecting that it would eventually provide better-paid work than her present job. She grows a plant that she learned about in a fruit-production course last year. ''It bears fruit from July through October,'' she says, ''and my eyes lit up with dollar signs at the thought of a berry I could market until late fall.'' The enterprise struck Joe as dubious. ''Being at the mercy of Mother Nature is too chancy,'' he says. But he finally agreed to go along. ''I have lots of patience,'' says Brenda with a winning smile. Last January, the Neals arranged for a $23,000 line of credit with the Farm Credit Association, a federally chartered lender. To date, Brenda has used $10,000 of the credit line to buy a Datsun pickup truck and a rotary tiller. Her monthly debt repayments at the prime rate -- recently 10.5% -- have averaged $390. The couple tapped their own savings for $1,200 to buy 20,000 strawberry plants and spent $1,700 more for irrigation equipment. Aided by six to 10 high school and college kids, Brenda planted her strawberry patch in May and harvested it this fall. She spent $767 for planting and paid her pickers 50 cents a pint. She had hoped to sell the pints for $1 each and gross $35,000 for the year. But so far, grocery stores and roadside stands have been willing to pay her only 92 cents. ''That's just the early-season price,'' she says, adding confidently, ''Later-season prices will be higher.'' Joe is dismayed that his busy schedule keeps him from giving his wife more help with the work. Strawberry growing is notoriously strenuous, requiring stoop labor to plant and pick the crop. And Brenda still has her job at Cornell. ''I come from a long line of workaholics,'' she says. The oldest of three children, Brenda is the daughter of a Department of Agriculture plant breeder who ran a family tobacco farm on the side in Oxford, N.C. ''Mom was always in the fields on a tractor,'' recalls Brenda, ''and we kids grew up farming. My folks made a pact with us that if we wanted, say, a bike, we had to work for it and they'd match what we made. The work ethic we learned was invaluable.'' She pauses, then suddenly blurts out: ''But I think we worked too hard. We often didn't have a chance to enjoy each other, and it bothered me that I couldn't party with my friends.'' Joe has very different childhood memories. He grew up in Albany, Ga., the youngest of three brothers. For several years, his father was a pharmacy student while Joe's mother supported the family as a grade school teacher. ''She was a good psychologist -- she convinced us kids that creamed chipped beef on toast was the best meal ever,'' he says. ''I know now that we ate that way because we didn't have much money, but my folks kept financial problems from us.'' Unlike his wife, Joe says, ''I had no after-school chores.'' He did find his first job, working at a greenhouse, at age 13, because, he explains, ''If I wanted something, like equipment for a speaker system that I built, I too had to earn the money for it. But my parents contributed what they could -- they gave me speaker parts as a Christmas present, for instance. I got gifts, not matching funds.''

Brenda and Joe made it through college on family savings, earnings from jobs, loans and scholarships. They met in 1984 as graduate students in horticulture and agronomy at North Carolina State University in Raleigh. ''It was a class in pest management,'' she recalls, ''and he was the only thing I got out of it.'' Joe earned a Ph.D in horticultural weed science, Brenda an M.S. in plant breeding. They were married in August 1985 and almost at once began squabbling over the household budget: she said they overspent on clothes, while he claimed the grocery bill was too high. ''I still think it is,'' he says. ''I got by on beans and rice when I was a bachelor.'' ''That's not eating,'' replies Brenda. They also have their tiffs about work habits. ''Weekends are for relaxing, not labor,'' says Joe, slipping a cassette of the old Bing Crosby flick The Bells of St. Mary's into his VCR and settling back on the couch. Brenda interrupts her dusting to remark, ''I don't think of house chores as labor -- unless I end up doing 'em by myself.'' Recently, Joe and Brenda got rid of one financial sore spot: Joe's sailboat, which for several months had sat in their driveway. ''We used to sail on Cayuga Lake,'' he says, ''but we haven't had time since last fall.'' Meanwhile, they were paying $197 a month on the $7,250 loan and still owed $3,000 at 13%. So the Neals regretfully sold it for $8,800. The cash is temporarily in a bank account. Joe's newest idea is to sell his 1984 GMC Jimmy four-wheel-drive sport- utility vehicle. ''Then,'' he says, ''if we combine the proceeds from the boat and car sale and take out a small loan, we'd have $15,000 -- enough for my BMW.'' Brenda replies, ''A Toyota is cheaper, and we'd get just as good value.'' And the Neals square off for yet another financial joust.


-- THE PROBLEMS: Softening conflicts over money, deciding the worth of a farming venture and shaping an investment portfolio -- THE SOLUTIONS: Emphasize financial traits you share, calculate Brenda's true return from the farm, and boost your emergency reserve.

At MONEY's recommendation, Joe and Brenda Neal sat down with psychologist Anthony Pane Jr., certified public accountant Kenneth Walker and certified financial planner Helen Saunders, all of Ithaca. The panel offered the couple these tips on handling their finances and their relationship: Resolving money differences. The Neals' behavior and comments convinced Pane that they both have a higher-than-average interest in money and are more alike than they realize. But, he said, they have fallen into the habit of stifling the similarities and emphasizing the differences. He suggested that they explore their financial likenesses to gain fuller insights into how much they actually share the same money goals. He also advised Joe and Brenda to examine the money attitudes that each had absorbed in childhood. ''Brenda's take-charge tendencies may stem from the days when her parents controlled her life, producing pressure and money anxiety -- for example, by deeming it more important that she work than party with friends,'' he theorized. ''Recognizing that could keep Joe from assuming that she's deliberately being difficult when she insists on making money decisions.'' On the other hand, Pane said, Brenda may feel less frustrated with Joe's relaxed approach to their finances if she learns to understand that money never mattered that much to his family. Added Pane: ''I'd like to know what mechanism you two use to keep your sense of humor about your differences. You should patent it and sell it to other couples.'' The farm. The Neals could be in for a hard lesson. Since Brenda's customers will pay only 92 cents a pint for her berries, Walker observed that she will have to raise about 38,000 pints to reach her target gross of $35,000 for the first year. That's doable. But at 50 cents a pint, her labor cost for picking alone will total $19,000, leaving a scant $16,000 to cover crop maintenance, marketing, loan repayment and all other expenses. Walker said these costs would reduce her profit to only $1,000 or so. He suggested that at the end of the season the Neals calculate the return on their investment and how much Brenda earned for her labor. ''I don't think the amount will be worth the effort,'' he said. Meantime, he recommended that Brenda try to find an inexpensive way to truck the berries to a market like New York City, where they could fetch $1.65 a pint. Concluded Walker: ''Take heart that at worst you won't suffer huge losses -- and you've had a valuable entrepreneurial experience.'' The couple's investments. Saunders had few quarrels with the Neals' retirement investments. But she noted that their nonretirement portfolio is invested either very aggressively -- for instance, in the volatile (if lately surging) Alger Small Capitalization Fund -- or extremely conservatively, as in their low-earning bank passbook account. For the future, she counsels balancing their portfolio with more middle-of-the-road fund selections, such as Washington Mutual Investors (800-421-9900; 5.75% load, five-year compound annual return through July: 22.7%), which blends capital growth and current income. Saunders further urged the couple not to put any more money in Alger Small Cap. ''It's too risky for you,'' she said, ''especially if your farm pulls down your income.'' For the same reason, she told the couple to sell their shares in Energy Conversion Devices. Last, she suggested that they transfer their $1,100 in passbook savings plus the $5,800 they will net from the boat sale to a money-market mutual fund for a higher yield. The money would constitute an emergency fund that should eventually reach $10,000. Saunders advised Joe against using the boat money for a BMW. ''I'm not sure that's the best use of your money, particularly since you're thinking of having children,'' she said. The Neals were intrigued by Anthony Pane's remarks. Said Brenda: ''Psychologists we've met always seemed like fruitcakes, but we liked him.'' She admitted feeling ''disappointed that the farm doesn't seem worth the risk'' but added, ''I'm hopeful for next year, when we don't have to absorb the initial costs.'' Calling Helen Saunders' advice ''practical but conservative,'' she then came out with what she called ''the big news: we're going to buy a car. We've found a 1988 Mazda 929 that's a dealer demo with 6,600 miles on it, priced at $16,000.'' The Neals planned to meet the cost by trading in Joe's GMC Jimmy and making up the difference with their boat-sale proceeds plus a $5,200, three-year loan at 11.5%. Asked why she agreed to spend more for a car than the BMW Joe had originally hankered after, Brenda said, ''I just got tired of arguing, and I figured if I agree to this, maybe I'll gain leverage for buying some furniture.''

BOX: Bottom Line

In the 12 months covered below, Brenda Neal kept her husband's extravagance so firmly in check that the couple put 17% of their income into savings and investments, including $4,369 for her strawberry farm.

INCOME Joe's salary and speaking fees $39,400 Brenda's salary 17,000 Withdrawal from savings 570 Interest and dividends 150 Total $57,120

OUTGO Taxes $15,236 Mortgage 7,602 Recreation 5,898 Savings and investments 5,450 Loan repayments 5,094 Farm expenses 4,369 Food 2,524 Home furnishings and repairs 2,146 Pension plan payments 1,939 Car expenses 1,861 Utilities 1,255 Clothes 1,120 Joe's life insurance 1,004 Gifts, contributions, dues 978 Medical expenses 320 Homeowners insurance 245 Miscellaneous 79 Total $57,120

ASSETS House $92,000 Retirement savings 30,358 Personal property 15,000 Vehicles 10,450 Boat sale proceeds 8,800 Investments 4,175 Bank accounts 2,100 Market value of business 980 Life insurance cash value 800 Total $164,663

LIABILITIES Mortgage $51,000 Line of credit 10,000 Boat loan 3,000 Total $64,000

NET WORTH $100,663