by Dave Kutcher
In a speech from 1953, President Eisenhower specifically referred to this expression of “Guns or Butter”…
“Every gun that is made, every warship launched, every rocket fired signifies, in the final sense, a theft from those who hunger and are not fed, those who are cold and are not clothed. This world in arms is not spending money alone. It is spending the sweat of its laborers, the genius of its scientists, the hopes of its children.
The cost of one modern heavy bomber is this: a modern brick school in more than 30 cities. It is two electric power plants, each serving a town of 60,000 population. It is two fine, fully equipped hospitals. It is some fifty miles of concrete pavement. We pay for a single destroyer with new homes that could have housed more than 8,000 people…”
So, what is our point in highlighting this expression, “Guns or Butter”? Well, in its simplest sense, what it means is we must make choices on where we spend our limited financial resources. You can’t have everything, and deciding where to spend money in a family’s household budget is not always an easy task. And, to make it even more difficult, we are typically trying to serve a multitude of needs and wants from a variety of people. Just as in society, not everyone wants the same things … what is important to one person may be the least important thing to someone else.
Communication is key in running a family budget. We see couples struggle with family financial dynamics all the time. Almost 50% of couples today admit that disagreements regarding money are prevalent in their home and more than ¼ of couples say financial decisions are the greatest challenge they face in their relationships.
Working through financial decision-making differences can be stressful for sure. We recommend couples work hard at this from the get-go. While it can make for some tough conversations, finding some common ground and agreeing to mutually suitable priorities in terms of spending and savings priorities will help alleviate a great deal of relationship stress. And let’s face it, when we have mutually agreeable goals and aspirations, we find ourselves building and bonding together and we can have some fun together as a couple watching plans come to fruition over time.
This is not to say that one person in the household shouldn’t be responsible for the management of the financial resources, but we are saying everything seems to work best when everyone agrees on the plan overall, including who might be responsible for various aspects of resource deployment. We find, in fact, that most couples do designate one person to be the financial manager of the family’s resources … we just know the ultimate plans work best when there is mutual work on the front end in setting a course for daily, monthly, and annual spending and savings habits.
An open dialogue about money should be on-going. Things change over time, adjustments may need to be made, life stages come and go … agree to keep an open mind and open dialogue for the years ahead and you will find much less stress creeping into your lives.
Let’s face it, we all need some amount of “guns” and some amount of “butter”… how much of each is a trade off of personal priorities. Work together, honor your agreements on big money decisions to each other and find common ground even if you don’t agree on every little aspect of your financial lives. If there are competing wants, be willing to split the difference and find compromise. Allocate a certain amount of the total revenue coming into the household, after what is needed to meet basic needs, to each other to spend or save as you each wish. Allow each other to be different without losing track of the bigger picture.
My name is David A. Kutcher, a retired Marine Corp Captain. My business partner in the lower 48 is Richard C. Scott, CLU, LUTCF. For nearly 40 years we have been helping folks with their personal retirement decisions. We encourage you to make an appointment and get ahead of your concerns as early as is possible. You can catch us on the radio every Saturday morning, “Retirement in the Last Frontier”, 8:30-9:30 on AM 650, Keni Radio and at 7 am on KFQD AM 750 and FM 103.7. Frontier Retirement, 10928 Eagle River Road; Eagle River, AK 99577, (907) 795-7452.
