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Found Money and the Prisoner’s Dilemma

Michael James talked about found money yesterday and the joy of paying off bills with found money, and how we should not squander this found wealth, and really use it to create happiness in the future by paying off debt now. I think this is a sensible approach to found money, but it made me think about another post I did a while ago, which was how couples deal with money.

Many times found money can cause a great deal of consternation between spouses because each have their own idea of what the best thing is to do with found money.

I think this is natural, as with most every subject possible spouses are going to have their own ideas, but the problem arises when the two ideas are contradictory or even orthogonal to each other.

Mary and Bob have received an inheritance of $10,000.00, and they are trying to decide how best to use the money. While Mary thinks that a family vacation is a good idea, Bob believes that paying off their mortgage and shortening its term by 5 years is a more practical approach. It is important for them to make a decision that will benefit the family in the long run, and they need to weigh their options carefully before making a final decision.

Reading this, it sounds like an easy enough “problem” to deal with, both folks want to do what they think is best with the money, but the problem now is you have is a simple difference of opinion. The problem I have seen in my life and from other folks I know is that this is not a simple problem, because:

  • There is no wrong answer (or right answer)
  • Both spouses have voiced their opinion, and thus feel they have the right answer.
  • Money and money management is a divisive factor in many relationships

Is there a Solution?

Only if both parties are willing to compromise, or one is willing to lose (i.e. typical Prisoner’s Dilemma issue). Wikipedia’s explanation of the Prisoner’s Dilemma is:

Two prisoners (the players) during the interrogation each have a choice: whether to betray the other one, and thus to decrease his own jail time by, for example, 1 month (as a compensation for the cooperation), while increasing the jail time for the other by, for example, 10 years, or to stay silent. Each of the prisoners is only interested in receiving the least possible sentence. It shall be assumed that the prisoners make their choices (to betray or to stay silent) simultaneously, and they know for sure that their choice cannot affect the choice of the other one.

All right I am stretching this (feel free to leave a comment), but the need to compromise and find the best solution for the couple is not always obvious to either spouse, and sometimes they feel it is not in their best interest (they got their way the last time, so I want my way this time). Sound familiar to any of my readers? Never happened to you?


I have no canned simple answer for this one, because as I keep saying, Money is a strange and divisive thing in a relationship, especially if the spouses do not agree on money and how to use it.

What needs to be done is have clear lines of communication and rational discussions between the spouses about what they want to do, and a decision made that doesn’t cause either to feel that they have “lost” in this decision. Sounds easy, doesn’t it ?

Do you think this is a simple thing to resolve? If you and your spouse never have these issues, then you are either very lucky (or very naive).

Feel Free to Comment

  1. AJC @ 7million7years

    You’re right … compromise is required, but so are some upfront ‘rules’ to live by (i.e. follow the Rules, where there are some, and compromise on the rest). Two examples:

    1. In the case that you outlined, there is a simple Rule: save (e.g. put it into the mortage) 50+% of any ‘found money’ and spend UP TO 50% … money is to be saved AND enjoyed!

    2. We just bought a new house and broke our own 20% Rule [ ]; how will we fix:

    The compromise was that we could buy the house for cash (actually, we did) BUT we would subsequently use 50% of the equity to help fund other CONSERVATIVE long-term buy/hold investments (to be decided).

    A great post … thanks for the opportunity to comment! AJC.

  2. Rachel @ Master Your Card

    It can be tricky – getting a fair compromise. I have managed to convince my husband that paying off our mortgage early is a good plan. I think once we do this we may not agree on what we do with our extra income as I think he already has a list of things he wants to buy.

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