Could your bank account be too fat?

I have emerged from Christmas Carol in (mostly) one piece.

I had very little personal finance advice for you during the last month, but I now have a few ideas I want to share with you which will be parceled out over a few blog posts.

This first one is a direct reflection of the link I always find between how we spend and how we eat. How we feel about food is how we feel about money and I was recently thinking about your body’s “set point”. This is the idea that there is a place your body prefers to stay in terms of how much you weigh. You have a hard time keeping weight off because your body has found a place it finds most comfortable and you are literally fighting against your biology to change that. Some believe that the only way to change your set point is through exercise.

So what about your financial “set point”? I bet there’s a point where your checking account gets to and if it falls below that point you start to panic a little. And where your credit card limit is comfortable but if you go above that you feel uncomfortable.

Andy and I are about to combine finances in January as I start on the road towards grad school and find that our financial set points are radically different. Like in the thousands of dollars different. He doesn’t like his checking account to get below $4000 and I’m comfortable all the way down to $400. So how can my set point be literally one tenth of his and how are we going to reconcile that going into our joint financial venture?

Well, the first part is easy. Andy has been growing wealth for 15 years more than I have. So he has been able to accumulate wealth and hang on to it. His life has been steady as he’s been at the same job for 13 years and has managed to grow steadily and live a relatively low-overhead life.

My financial earning years have been much more uncertain and unstable with my income fluctuating dramatically and the expenses of moving across the country and starting a new life in a new city (twice!) means that I am more used to watching my account dwindle while I wait for the next gig to come up.

And how do we reconcile our different set points?

Oh, that’s easy.

He’ll have to come down and I’ll have to come up. Obviously easier for me to see more money, but also I’ll have to get used to the idea that the extra wealth is actually not available for spending. It is there for a cushion and nothing else. So while it may seem easier for one to raise their set point, with it comes the expectation that money that is there is actually not there.

Do you and your partner have different set points? Has yours changed over the years either up or down?

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2 Responses to Could your bank account be too fat?

  1. Mike says:

    For a long time, I was used to my bank account balance being lower than $100, even watching it dwindle to the point where it was less than $5 and still feeling like I had a handle on things. Then a year ago I got a steady retail job and for most of 2012 I had a secondary source of income to balance it out every month. So no matter what, I always had about $100 sitting pretty in there and I felt fine. Then, towards the end of the year, those secondary jobs fell by the wayside and several times I had to watch my account fall almost to 0 and would start to panic. I ended up asking for advances twice from one employer – once to pay some bills on time, and the other just to have the peace of mind that there was money in my account if I needed it. It's a very strange paradigm shift to suddenly want to keep my bank account over a certain amount, but I like it and hope that number continues to grow as my career does.

  2. Verhanika says:

    It will! Especially as you take new and exciting steps to grow your career and find new venues for income.

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