Category Archives for Relationships

Combining Your Personal Finances For Marriage

I remember once reading a book describing marriage and the joining of two people’s finances, and they summarized the process as “1+1 = 1.”

Personally, I took this description as having two meanings, one figurative and one literal.

• On the figurative side, I took it to mean that there might not be a set and/or mathematical approach to combining personal finances for marriage (i.e. it’s likely to be a little different for every specific situation).
• On the literal side, I took it to mean that there really is no way to maintain two completely separate finances during marriage, no matter how hard you try.

So, having established this, I wanted to share with you all how my wife and I (got married in Sep 2014) have, in my opinion, successfully combined our finances over the past ~ 1.25 years. My hope is that a couple of the lessons learned and strategies can potentially help you in your current or future marital finances. Enjoy!

Step 1 – Put a Legal Agreement In Place (Pre- or Post-Nuptial, often called a “Pre-Nup”) If There Is Significant Financial Inequality Coming In To The Marriage

For young folks looking to get married right out of college or graduate school, it is often the case that both individuals are living paycheck to paycheck, have debts, and don’t have any significant savings to report. If this is the case, and both individuals are on approximately equal financial terms coming in to a marriage, a pre-nup is nice to have, but not crucial.

However, if one person has significantly more savings than the other, or even if one person has large amounts of debt whereas the other is debt free, it’s a good idea to put some sort of agreement in place.

For my wife and I, a pre-nup made a lot of sense, so we proceeded to obtain one.

Online Free Template or Lawyer?

Being the cheapskate I am, I first looked online for free template documents for pre-nups so that I could save on lawyer fees. However, once I read that agreements drawn up individually (without the help of legal counsel) often don’t hold up in court, I decided it wasn’t worth the risk, and proceeded to engage legal counsel for my wife and I.

One thing we learned, which we didn’t know at first, was that each party going in to the agreement has to have their own separate legal counsel in order to maintain objectivity. Of course, this also increases the cost, but is a move that makes sense. In the end, I obtained a family lawyer referred to me by my accountant, and my wife obtained a lawyer that we knew through a local social group and other friends.

With all the back and forth between lawyers, my wife, and myself, it took longer than we expected to get the agreement finalized. When everything was signed, it was actually a POST-nuptial agreement, meaning that we signed it after our wedding and honeymoon. However, according to my lawyer, he said that a post-nuptial agreement is still perfectly legal and enforceable. 

What does the post-nuptial agreement provide?

In a nutshell, our post-nuptial agreement makes it so that all debts and assets are SEPARATE, unless we make a conscious decision to make it a joint account and put both our names on it. What this means is that all IRAs, 401ks, savings accounts, checking accounts are separate, except for the ones that we created to be joint accounts.

How much did this whole process cost my wife and I? 

In the end, the cost was a little more significant than I expected, but that was only because I didn’t realize all of the complexities and considerations that go in to this type of document. My family lawyer charged the majority of the total cost (around $2,200), since he drafted the document. My wife’s lawyer gave us an awesome “family and friends” rate, which took the cost up to around $2,500 total.

Step 2 – Pay Off Any High-Interest (Credit Card) Debts

Remember that marriage finance equation I mentioned before, where 1 + 1 = 1? It very much applied in our case, as our marital agreement made it so that I wasn’t legally responsible for my wife’s existing credit card debt. However, let’s get real here! No matter how much you want to deny it, YOU are marrying that credit card debt too!

In actuality during marriage, our paychecks each month will be combined, and the joint money will either go to 1) savings/spending or 2) paying the monthly credit card balance, which is a terrible use of money since a lot of the money goes to pay interest, not principal.

So, if one party of the marriage has a some cash sitting an account, it’s only logical to use this cash to pay off the other person’s credit card debt. This is exacting what was hard for me to eventually come to terms with during the joining of our finances. However, it was definitely the best financial decision.

Step 3 – Set Up Joint Accounts Needed

For my wife and I, it made a lot of sense to have at least a couple joint accounts. We decided to have 1 – joint checking account, and 2 – joint savings accounts. We placed both of these accounts with Ally Bank online, since they offer some of the best interest rates around and other favorable terms.

For us, the way we operate is that we each receive our income in to separate Paypal and Bank of America checking accounts at first, and then transfer our remaining money to the joint checking account for paying bills, savings, etc.

Step 4 – Setting Up Your Investment Strategy

Per our post-nuptial agreement, my wife and I maintain separate accounts for the ones which are not specifically “joint” and have both our names on them. Because of this, we maintain and track two sets of 70% equity / 30% fixed income asset allocations, separately.

• For my wife, she does not have any desire to be actively involved in managing her asset allocation. As such, we use a low-cost lifecycle Vanguard index fund, called the Vanguard Target Retirement Date 2025 fund. It maintains a 30% fixed income, 70% equity asset allocation for her, so she doesn’t have to worry about rebalancing.
• For me, I love tracking my asset allocation and rebalancing when needed, so I take a more active approach to passive index fund investing and invest in individual Vanguard index fund for the various share classes, bonds, and international markets. You can read more about my investing strategy here.

From there, we then try to invest an equal amount of contributions to each of our separate IRAs, 401ks, etc accounts throughout the year.

Next Steps

So there you have it, the 4 “initial” steps my wife and I took over the past year or so in order to get our finances combined.

For next steps, I do need to start doing a better job of reviewing my Value Based Financial Planning and goals, as we have been so busy over the past year with the wedding, graduating, new job, baby, and moving to Colorado that I haven’t been able to do that as much as I’d like. Of course now, I will need to involve my wife in that process. Should be fun!

How about you all? What were the main steps / barriers / hurdles / challenges you faced when combining your finances for marriage? 

Share your experiences by commenting below! 

***Photo courtesy of https://www.flickr.com/photos/kumon/43128198/

Why I Don’t Want My Daughters to Be Stay-at-Home Moms

The following post is by MPFJ staff writer, Melissa Batai.  Melissa is a freelance writer who covers topics ranging from personal finance to business to organics to food.  She blogs at Mom’s Plans where she shares her family’s journey to healthier living and paying down debt.

We women are often told that we can do it all—have a good marriage, raise children, and maintain a rigorous career. However, many women are finding that is a myth.

More and more women are walking away from the workforce, either permanently or temporarily, while they raise children, but should they?

I was raised in the 1970s and 80s, a time in between two worlds of women—those who always stay at home and those who pursue jobs outside the home.

My mom was raised by a stay-at-home mom. My mom, too, was a stay-at-home mom, though she also worked from home babysitting so she could contribute to the family income. My mom just assumed I would also be a stay-at-home mom.

As luck would have it, I didn’t find Mr. Right and get married until I was 29, and we didn’t have our first child until I was 33. That gave me plenty of time to earn a B.A., a M.A., and to work full-time as a community college teacher. After my first child was born, I really wanted to stay home with him, but we couldn’t make it work until I was 39 and we had three children.

I was solely a stay-at-home mom for 10 months. During that time, I felt a bit at a loss. After 10 years in the workforce, juggling both work responsibilities and childcare, staying home and “only” caring for my children felt a bit strange.

When I got the opportunity to do some freelance work from home, I jumped at the chance.

In the 4.5 years since then, I’ve stayed home with my children, now homeschooling them, but I’ve also maintained a part-time freelance workload.

For me, it’s the best of both worlds. As a writer for Fortune stated, “Work at home moms have similar perks to stay at home moms. They can attend the pre-school holiday parties or pick up a sick child from school and still make it back home for a 1 PM conference call. They’re also able to save money on childcare by working evenings and during nap time. It’s almost like you get to—dare I say—‘have it all.’”

As I watch my young daughters grow, I find myself hoping that if they don’t want to work full-time, that they take a similar path as I have and will work from home part-time while caring for their children. I hope they always spend some time doing work besides caring for their children.

Why I Want My Girls to Always Work

There are four primary reasons why I want my girls to always work, even if they choose to stay home with their children:

Personal Fulfillment

Staying home with kids can be challenging. . .and tremendously rewarding. However, kids won’t be little forever. Kids grow up and spend more time with their friends. Kids go to college and leave the home.

I want my girls to have other interests and pursuits besides just raising their children so that they aren’t lonely when their kids grow up and leave the nest.

I also want them to get pride and satisfaction both from raising their children and doing work that they love. Sometimes, on particularly difficult days, raising kids can be exhausting. Escaping to do work can be a way to recharge and spend some time in the adult world.

In the Event of the Death of Their Spouse

As I mentioned, my mom did work from home babysitting. However, she never went to college, and she married young, at age 20. Before she married, she worked in a factory and hated it; she quit as soon as I was born, 11 months after she was married. While my dad was alive and the primary bread winner, they could make it financially.

However, at the age of 37, my dad was diagnosed with cancer, and just four short months later, right after he turned 38, he died. My mom was a 36 year old widow with two young kids and no work skills.

Life insurance provided her with a year’s worth of income. Then, she started working as a cashier at a grocery store; she struggled to pay the bills on that income.

A few years later, a friend managed to get her a part-time job as a secretary, which eventually turned into a full-time job. She went on to work that job for nearly 20 years before retiring. I often hear her mention how grateful she was to her friend for getting her that job because she never would have gotten the job on her own due to her lack of skills. Instead, she got her foot in the door and learned on the job.

Those years after my father’s death were very difficult for her because she didn’t have any skills or experience to help her survive when she suddenly found herself on her own.

In the Event of Divorce

No one gets married with the idea of divorce, but divorces happen in our country. . .a lot. A woman who continues to work full-time or part-time or freelances from home keeps her skills sharp.

Right now, I only work from home about 10 hours a week. I only provide about 25% of our family income, but if I needed to, I could ramp up that workload, especially if I found myself in a position where I needed to support my family myself.

We had a family friend, Joan, who was a stay-at-home mom for forty years of marriage. Her husband was a hard worker, but he struggled with alcohol abuse. They finally divorced in their early 60s. Joan was like my mom and had no education or skills. After the divorce, she found a minimum wage job, and is still working that job today.

She gets half of her ex-husband’s retirement, but she doesn’t see much of the spousal support she was supposed to receive because he was fired from his job soon after the divorce.

In the Event on Injury

There are a number of ways a stay-at-home mom may lose her husband’s income, and it isn’t always because of death or divorce.

In our community, a woman in her thirties has become the primary breadwinner because her husband, just 40 years old, had a catastrophic stroke that has left him in a nursing home.

Luckily, she had a full-time job, so she was able to financially support herself and her kids.

Sometimes Life Works Out as Planned

Certainly, there are many women who are stay-at-home moms and go on to have good, secure lives. My cousin and his wife married in their late teens and had 7 kids. During that time, he worked full-time at his own business, and she stayed home with the children. Now, all of the children are grown except for the youngest who is a high school senior.

The marriage is intact, they’re both healthy, and their arrangement of him being the breadwinner and her raising the family has worked out wonderfully.

Yet because there are so many times this situation doesn’t work out as well, I will always encourage my daughters to get their educations and to keep their toes in the workforce, whether that means working from home part-time or working outside the home part-time or full-time.

How about you all?  What do you think about these situations? Would you encourage your daughter to continue to work in some capacity even if she wanted to be a stay-at-home mom? Would you discourage her from being a stay-at-home mom?

Share your experiences by commenting below!

***Photo courtesy https://pixabay.com/en/laptop-woman-coffee-breakfast-943559/

Cheap Family Activities To Do In The Fall

The following is a post by MPFJ staff writer, Jeff.  Jeff writes about reducing waste, saving money and building freedom at his website, Sustainable Life Blog.

Recently, I attended the Financial Bloggers Conference in Charlotte, North Carolina, and just a few days after that ended I hopped on a plane to Hong Kong and on to Phnom Penh, Cambodia for a bit of traveling and temple viewing. When I left my home in Wyoming, the weather was still in the mid to high 70s, which is fairly warm. However, after almost 3 weeks on the road, when I got back to Wyoming the leaves had started changing and the temperature was down into the mid 50s! Fall was here, and I am super excited – it’s my favorite season! In honor of my favorite season, I’m going give you a few of my favorite fall activities for families.

Go For A Walk

This is absolutely one of my favorite things to do any time of the year, but I really enjoy it during the fall. You get the nice cool, crisp weather, the leaves are starting to change colors a bit and everything just feels so relaxing. The buzz of summer is gone and you (well I don’t) feel in a hurry to get anything done or rushed in any way. It’s just so relaxing, and to me going on a walk is the ultimate way to relax even further and get some exercise too! Every weekend in the morning, my wife and I relax a little and then wake up, she does yoga and I play with the kid until she’s finished, and then we all go on a family walk to the local park. We live just a few minutes walk away from what I think is the best park in our town, so we take full advantage of it and use it many times a week.

Play Tourist

This is something that I think is really underrated unless you live in a destination city (and even if you do). Many people have lived where they do for years, but don’t take the time to see what the tourists come to their city to see. Since the summer is over, you can grab a jacket and play tourist for a day, and look for anything that sounds interesting to you or is fairly low cost to take the family to. You can use Trip Advisor to check for good and interesting things to do in your area, and might even find something that you didn’t know about at all in there!

Scavenger Hunts

If your kids are old enough, try planning a scavenger hunt around your neighborhood or somewhere in your city. Give them a map and a list of things to find, and see which group of them comes back first. If your kids are not old enough to go out on their own, have mom and dad join each team and provide a set number of hints if necessary (up to 3) if they need it, but other than that they are on their own! You can give them a few places to check out and have them play amateur food critic on the way, with “who has got the best X (pizza, bagel, etc)” and have them report back their thoughts on why.

While all of these will work in the summer, I find they are great fall activities because there are less people and you can do more. You also don’t have to content with the heat for very long, which should let you have more fun.

How about you all? What fun and cheap activities do you during fall? What activities have worked best for you and your family? Share your experiences by commenting below!

***Photo courtesy https://www.flickr.com/photos/dheuts/3804259707/

4 Things You Need to Know About Your Fiancé Before You Tie the Knot

The following is a post by MPFJ staff writer, Derek Sall. Derek is the owner of the blog, LifeAndMyFinances.com, where he teaches people how to get out of debt, save money, and become wealthy.

My first marriage failed about three years ago. Since then, I have met an amazing woman and have proposed yet again. Our big date is coming up in July, and to be completely honest, I’m starting to shake in my boots a little. Am I making a better decision this time? What about those certain areas that we don’t agree on? Can we stay together forever? These thoughts are racing through my head as I think about our past and our future together. Thankfully I have some comfort in knowing that we align on the four biggies in marriage:

1. Money
2. Children
3. Religious Beliefs
4. In-laws

Let’s take a moment and dive into each one of these categories to get a clearer picture on whether or not you are in alignment with your future spouse.

Money

For starters, how much money do you have, and how much does your fiancé have? Do you have $100,000 in debt and he/she has absolutely no debt? Are do you have a huge net worth and he/she is dirt poor? Without some early communication, these areas could become very stressful for both of you, especially if one of you feels that your debt is your debt, and they have no responsibility for it. Figure this out early or it will turn into a huge problem later.

Are you both savers? Are you both spenders? Or is one of you a spender and the other a saver?

If you are both savers, awesome, life will probably be pretty easy in the money department. If you’re both spenders, life can start out fun, but when retirement time approaches, one of you will likely freak out and want to save something, while the other wants to keep spending, so this naturally will present a future problem. If you two are opposites (one saver and one spender), life can really be trying and might result in constant bickering and stress.

As an overarching rule, you should have a common money goal with your spouse. Do you both want to retire with millions of dollars and move to Arizona? Or, maybe you both want to be self-employed and live simply. Whatever the case may be, make certain that you are both heading toward a common future goal in the money department. With this goal, both of your paths should at least be heading toward the same general area.

Children

Do both you and your fiancé want to have children? If so, when and how many? Are you open to adopting or is this your preferred method of becoming parents? If so, where will you adopt from and how much are you willing to spend? With children, will one of you become a stay-at-home parent, or will you both work and put your child in daycare?

There are a ton of questions surrounding children, but if one of you wants no children and the other wants three, this is a huge red flag! Between my fiancé and I, she would like to have two, where I would rather have three. Thankfully, our numbers aren’t too far off and one of us can adjust when the time comes to decide on the third or to stick with two.

Religious Beliefs

If you plan to have kids, the issue of different religions is quite serious and can often divide your family. If you are Catholic and your partner is an atheist, how will your kids be raised? Do you present them with all of the beliefs and let them choose? Does the more dominant parent just take control and teach them their religious beliefs? What if all the kids choose one parent’s belief system and then leave the other parent as the outsider?

The absolute best way to succeed in marriage (even if you don’t have kids) is to marry someone that has similar religious beliefs. Do not marry someone with the expectation that they will conform to your beliefs. This is not fair to them and it probably won’t work out for you.

In-Laws

Oh the in-laws… Without a doubt, your fiancé’s parents are different than yours. They might be more outgoing, they might be habitual liars, and they might be more prone to argue with one another. But, no matter the differences, you must be okay with who they are when you are going into the marriage.

While you might not see them all the time, they will definitely have an impact on your life between you and your spouse. Plus, with children (yes, again with the kids), you must be okay with letting your in-laws take the kids once in a while. If, at this point, you are uncomfortable with how your in-laws treat you, then chances are that things are not going to go over so well when they start talking to your children.

When you marry your fiancé, you aren’t just marrying him/her, you’re marrying into their family. Is that exciting or terrifying? Hopefully it’s the former and not the latter.

How about you all? How do you and your fiancé align within these four categories? What other factors to consider before getting married?

Share your experiences by commenting below.

***Photo courtesy https://www.flickr.com/photos/kumon/43128198/

4 Solid Reasons Why You and Your Spouse Should Share One Bank Account

The following is a post by MPFJ staff writer, Derek Sall. Derek is the owner of the blog, LifeAndMyFinances.com, where he teaches people how to get out of debt, save money, and become wealthy.

Throughout the past couple years of chatting with various couples about money, I have noticed a shift from the words, “our money” to “his money” and “her money”. It seems that fewer and fewer people are combining their bank accounts and have instead decided to keep them separate.

When you stop and think about, it kind of makes sense I guess. People are waiting longer to get married and have therefore become self-reliant for many years. And, many more people are living together before marriage (with separate accounts still) and just continue to live the same way even after they do eventually get hitched. One of them covers the mortgage, the other pays for groceries, and when they go out to eat it might be a toss-up for who covers the bill. This method seems to work well for some, but I’m still a promoter of shared finances.

Why I Believe in a Joint Bank Account

When I was growing up, I remember my parents sitting down at the table once a month to do two things. One was to type up sales receipts for the cars my Dad had sold (he owned a car dealership as his side-business), and the other was to pay the bills and balance the checkbook. They held the belief that since they were married, they therefore agreed to share their possessions, which simply meant to place both of their incomes into the same account. After viewing this first-hand as a child, I have seen four positive outcomes stem from their joint account.

1) It Encourages a Common Goal

When people have separate accounts, it is less likely that the two individuals share a common goal. If I would split them up and take them into separate rooms to ask the question, “What are your goals 10 years from now? How about 30 years from now?” it is very unlikely that they would provide the same answer.

A shared account encourages a common goal between the two individuals. If they commonly spend all of their money each month and contribute nothing to savings, they will probably ask each other the question, “What are we doing? And why are we not saving for something in the future?” In other words, “What are our goals?” As they both view the account, it is more likely that they would come together and spend (or rather, not spend) with a purpose for the future.

2) It Yields Built-In Accountability

If I were married (it’s happening soon by the way) and my spouse and I decided to try and save $300 each month, but instead, I had a bad habit of spending this money on random magazines, candy, and coffee, then this would be a serious problem. The joint account would probably make me think twice about spending the money on pointless things, and would instead provide me with a new accountability partner, my spouse. This might be a nuisance in the present, but it will create a much brighter future.

3) His/Her Money Becomes “Our” Money

Adults are sounding more and more selfish these days. Wives want more appealing décor in their house and men want new fishing rods, but each of them say, “I’m not wasting my money on that purchase. Why don’t you use your money?” When you spoke your vows at the wedding, didn’t you both agree that what’s yours is hers and hers is yours? Then what’s this “my money” and “your money” business? Simply put, it’s just a whole bunch of childishness.

If, however, you both have a mindset of that pot of money being both of yours, then you’ll have to come together and decide what’s stupid for your future and what’s smart. If you both can’t come together on a decision, then you don’t purchase the item. Simple as that. Let me tell you, stupid purchases occur much less frequently this way.

4) No Hidden Purchases

When you’re married to someone, there should be no secrets. No hidden relationships, no hidden actions, and no hidden purchases. If you’re trying to hide something, then you probably shouldn’t be doing it in the first place. Joint accounts leave everything out in the open, which will encourage each of you to stay on the straight and narrow and if that happens, it should bring you both closer together.

Many couples say that they fight much less frequently since they separated their finances, and I believe them. The only problem is that instead of being one in their marriage, they have now made themselves into two individuals that live under the same roof. Sure, there are less fights, but I believe that separate accounts are actually distancing both of you from one another. If you want to truly care for each other and build up your common goals, then I think a joint account is the ticket to get there.

What do you think? Are you an advocate of a joint bank account?

 Share your experiences by commenting below!

***Photo courtesy of https://www.flickr.com/photos/exalthim/3800467037/in/

How I Am Financially Motivating My Children

The following post is by MPFJ staff writer, Melissa Batai.  Melissa is a freelance writer who covers topics ranging from personal finance to business to organics to food.  She blogs at Mom’s Plans where she shares her family’s journey to healthier living and paying down debt.

Do your kids get an allowance?  If you’re like most parents, they probably do.  According to a study by the American Institute of CPAs, “61 percent of parents pay an allowance” with the average allowance totaling “$65 a month, or $780 a year.”  I was a bit surprised by how much kids receive on average every month.  Even more surprising, “only 1 percent of parents say their kids save any of their allowance.”  That’s a lot of dough to blow through every month.

One of my desires as a parent is to teach my kids to be smart money managers.  I do use a chore system to pay their allowance and have them save a portion.  Over the years we’ve experimented with different chore/allowance systems, but finally, I’ve found one that works perfectly for our family.

What We Used to Do and Why It Didn’t Work

For years, we’ve had a chore chart for our ten year old son.  We decided on a mix of chores he does because he’s part of the family (i.e., these are unpaid) like clearing the table when he’s done eating to chores like cleaning the bathroom that are paid.

We used to have a chore chart where he earned money based on the difficulty of the chore–making his bed paid 25 cents, while cleaning the bathroom paid $3.00.  I never forced him to do chores.  If he didn’t want to do his chores one week, he wasn’t paid.

Let me tell you, there were quite a few weeks when he didn’t do many chores and only earned a dollar or less.  When he wanted to buy something, he’d suddenly diligently do his chores.

While this system saved us money on paying out for chores, the fact is that he is a part of our family; he’s one of five people in our family making a mess every day, and if I didn’t want to live in a messy house or didn’t want to do all the household chores myself, I needed him to share some of the household burden.

We needed a new system.

The New Chore/Allowance System We Love

This summer I reread America’s Cheapest Family Gets You Right on the Money by Steve and Annette Economides.  I took particular interest in their chore system.  For their children, each child had the potential to earn 4 allowance points a day.

I modified their system a bit.  This is what I came up with for our kids:

Morning Point–The kids get this point if they make their beds, get dressed, brush their teeth, put the dirty clothes in the laundry, etc.

School Point–The Economides homeschool like we do, so their kids got this point for doing their schoolwork without having to be nagged and having a good attitude.  If a child isn’t homeschooled, he could get this point for completing homework and working hard in school.

Chore Point–Depending on age, a child has to complete a set number of chores every day.  For instance, my 10 year-old has to complete 3 chores while my 4.5 and 6 year-olds only need to complete 2 chores a day.

Round Up Point–At the end of the day, everyone finds 3 things that have been left out to put away.

In addition to these basic points, the kids also have the opportunity to earn a bonus point each day.  I give these bonus points if the kids treat one another nicely, help out if they see someone needs help, or choose to do an extra chore or two.

If kids get at least two bonus points a week in addition to earning all of their regular points a day, their earnings are doubled.  The Economides compare it to an employee who goes above and beyond at her job and is rewarded with a bonus or a pay raise.  The lesson here is that hard work is noticed and rewarded.

For chore point, they can choose between age appropriate activities that I’ve written out for them.  For instance, my 10 year old can choose three chores for the day from a list that includes:

• Clean, sweep and mop bathroom
• Sweep the front sidewalk
• Change the cat litter
• Empty the dishwasher
• Vacuum the living room, etc.

Why This System Is Working

I was initially surprised this system works because the pay is much less than I was paying with my other chore system.  My son gets 15 cents per point, so if he gets two bonus points in a week and can double his money, the maximum he can earn is $9.00.  Yet, he’s much more motivated with this system.  I think it’s because he knows he has to get all of his points each day if he wants the chance to double his money.  (He loves having the chance to double his money.)

Another key to his motivation is that he can choose his three daily chores from a list of 8 to 10 chores.  With the old chore system, I think he got bored doing the same chores over and over.  He can switch his chores up every day now.  (In fact, I encourage him to switch them up.  So Monday he might vacuum the bedrooms, but he won’t do that again until later in the week.)

Motivating Him to Save For College

The possibility to double his money is working so well that I decided to experiment.  If I offered to double his money for college savings would it work?

My husband and I, for the last few years, have been in no position to save for college.  Our plan is that our kids will go to college at the university where my husband is employed so they will get greatly reduced tuition.  Yet, we still should be saving in case they don’t want to go to the college where my husband works.

I told my son that whatever he saved for college each week, my husband and I would match.  I didn’t know how much this would motivate him since for a 10 year old, 18 is a lifetime away.  However, it’s worked better than we had planned.

Opening the Door to Financial Discussions

Now that he has the match in his mind, my son is frequently asking me financial questions.  Where will his money go when he’s saving for college?  This allowed me to talk to him about investing and earning interest on investments.

We also discussed saving for retirement and that the younger you start saving the more you can have in your retirement fund thanks to compound interest.  He finds it fascinating that he can save for retirement at a young age with less money and have more in his retirement fund then someone who puts large amounts of money in a retirement fund starting in her forties.

I can see the wheels turning in his head.  Yesterday, he asked me if he put $50 in his college fund, would I still match that?  If he put in $250, would I match that?  Of course I will.  I’m delighted that he’s thinking like this, and I hope we are putting him on a path to financial independence.

How about you all? What have been your best strategies to teach your kids about money and educating them on smart financial decisions?

Share your experiences by commenting below! 

***Photo courtesy of I’d Pin That

Re-Energize Your Marriage Without Spending a Dime

The following post is by MPFJ staff writer, Catherine Alford. Cat is a freelance personal finance writer who blogs at www.BudgetBlonde.com. 

If you want a way to pep up your marriage but don’t have a lot of extra cash at the moment, here are some ideas for getting back on track without breaking the bank.

Learn Something New Together

We often get bogged down in a routine, and I find the older people get, the less inclined they are to learn something completely different and new. Sometimes we get stuck in our ways or stick to what we know, but the truth is, there are so many things out there that you can do with your spouse that will enhance your own life and each others. For example, maybe you can learn a language together. Practice together and quiz each other. Then you can promise each other that if you get really good at it, perhaps plan a trip to France or Spain or Costa Rica and try out whatever language you learned.

You could also learn to play tennis or golf or scuba dive. When my husband and I learned to scuba dive, I was absolutely terrified. He went down in the water first and I just couldn’t do it. I started crying with the instructor on the surface of the water.  The instructor then went down to get my husband to ask him to come back up and help me. He calmed me down, told me it would be okay, and then held my hand so we could go down in the water together. Sometimes overcoming fears together is a great way to reemphasize the trust and compassion you feel for each other.

Watch Your Wedding Video

The last time we watched our wedding video, it was so sweet and romantic. I want to start a tradition where we watch our video every year on our anniversary with our kids. I think it would be fun to have our kids see us so young. It’s only been a few years, but I feel like both my husband and I look so different. Anyway, there’s just something sweet about watching the moment when you got married again. I’m so glad I got the video. It’s actually one of the best things we purchased in all of our wedding expenses.

Take a Long Walk

Fall is the perfect time to get outdoors. It’s hard for my husband and I to go anywhere because it literally looks like we’re packing for a three day trip with the amount of things we have to bring for our infant twins. Still, we always feel good when we get out the house and get some fresh air.  It’s a great way to work out arguments or have tough conversations because usually when you’re outdoors, you tend to remain more level in your conversation, and you feel a little better being surrounded by nature.

Try to Date

Dates are still expensive when you’re married! I see a lot of couples trying to commit to a date night, and while that seems really nice to me, it also seems really out of my budget. So, one way to still have date night without the expense is just to have it at home. You can plan an entire date with a movie and a certain dinner that you can make for your spouse or together. If you have kids, you can do all of this after they go to sleep. It takes a little bit of thought, but it’s something they will really appreciate. There are even entire websites devoted to thinking of fun date ideas you can do at home with your spouse. I love anything that means re-energizing a relationship without having to pay a huge expense.

Talk It Out With Friends

I think sometimes we often think our frustrations or issues with relationships are unique to us. Just the other day, my husband and I were hanging out with friends, and we realized that the men and women had a lot of the same issues. We were joking and teasing each other about it, and it was a fun, relaxed conversation about how my friend and I always want to talk to our husbands the second they get home because we both work from home all day. However our husbands, after long days of talking to patients at the hospital, kind of want downtime and want to be left alone. So, by talking it out with friends in a way that was fun and joking, we were able to get past a small hurdle. I find a lot of times it’s good to bounce ideas off of friends when you need an unbiased opinion about something!

Ultimately, there are tons of ways to re-energize your marriage than just the tips listed above. It just takes a little bit of thought, a little bit of advanced planning, and a lot of initiative and motivation to add a positive change to your life. However, once you do, I think you’ll start reaping the rewards right away.

How about you all? Do you have any other ideas on ways to improve or re-energize a marriage while on a budget?

Share your experiences by commenting below! 

***Photo courtesy of https://www.flickr.com/photos/dlytle/10334814055/in/

3 Changes to Your Finances When You Get Married

The following post is by MPFJ staff writer, Sally, who is the blogger behind TinyApartmentDesign.com, a blog about design, living well, and simple, tiny spaces.

I’ve been married for over a month and it still feels surreal. I’ll be honest; I still don’t know what to think about marriage. I spent my whole life terrified of marriage, never excited about the way long-time married couples treated each other, watching how awful going through a divorce can be, and generally unconvinced of the positive aspects of marriage. Plus, I consider myself self-sufficient and don’t need to rely on anyone’s income but my own. And yet, here I am, excited to be married to my best friend and partner. Now that we have officially combined forces, I expect some of our finances to change and some to remain the same.

New Goals

One of the biggest expenses we ever incurred together was our wedding. I am so glad we are done with spending money on the wedding, but we also now need to focus on saving for our future. My husband has no savings or retirement funds. We have opened a few in his name, but never contributed to it. I was previously saving 26% of my income automatically, but had put that on hold since February to pay for the wedding. Our goal is to start my husband on a weekly savings plan, and to get me back into saving at least 20% of my income. We’ve always been a team, and now that we are in our 30s, we want to make sure we are always moving forward financially. It’s not easy because spending is easy and can easily take up all of your disposable income, but we want to see out total savings grow quickly in the next 5 years.

New Tax Arrangements

We will be filing as a married couple for part of 2014, and we will also hopefully have some tax credits with the purchase of our first place. If you haven’t seen it yet, this Khan Academy video is a great way to figure out if you’re going to pay more taxes as a married couple. The other benefit to increasing our savings in pre-tax accounts will be the subsequent decrease in our taxable income. Someday, I’d like to be like Mitt Romney: $0 in wages, but plenty of money earned from investments and businesses. Since wages are punished by our draconian tax laws that confirm the federal government’s belief that the wage earner deserves to be punished, I will be focused on figuring out how to decrease my wages while increasing our income as a couple. Currently, all of our income is earned from either regular wages or self-employment income, so this is an important priority for us.

New Accounts

Many married couples will eventually get around to joint accounts, especially checking and credit cards. We’ll continue to put savings in our joint savings account, but our checking and credit cards won’t merge any time soon. We’ve had too much of a history of spending recklessly, and spending without consulting each other. This is something we are excited to work on, but we’re still not in any rush to merge accounts. We’ll continue to share all of our housing and living expenses, and I will continue to handle the actual payment of our bills, setting up online and automatic payments, keeping track of what’s due next and what we would like to buy for our house. Even though I have been the more financially aware member of our household, it’s going to be vital to our success as a couple for both of us to know where stand financially.

How about you all? Did you have any big changes to your finances when you got married?

Share your experiences by commenting below! 

***Image: http://www.freeimages.com/photo/1393177

Modern Dating: How Much Should it Cost?

The following post is by MPFJ staff writer, Catherine Alford. Cat is a freelance personal finance writer who blogs at www.BudgetBlonde.com. 

I know I am a “boring” married person, but I have several good friends who are still living it up with the single life. They always have the most interesting dating stories and mishaps, and time after time, I’m so surprised at how much dating has changed in the past 10 years.

First and foremost, I was really surprised to learn about the high cost of online dating websites. Did you know that some of them can cost in excess of $50 a month for a membership? Many of my friends have membership at multiple dating sites just to get the full spectrum and access to the biggest amount of people. Some of them have found their spouses this way. Some of them have found really strange people who touched their hair awkwardly for two hours straight. It really just depends, and more often than not, they have stories of dating gone wrong than dating gone right.

Who pays?

One of the biggest complaints I’ve received from my friends is that many of the people they date disagree on who should pay for meals. Many women I know were disappointed because they were expecting the man to pay for a meal and they didn’t. I’ve also had male friends of mine be disappointed because they tried to be polite and old fashioned and pay for a meal, only to be greeted with a date who refused their generosity.

This is a complicated topic and one that I’ve written about many times before. I said it then and I’ll say it now: I’m really glad that I stopped the dating game 10 years ago when I met my husband. I’m just way too introverted to deal with the awkward back and forth that seems to happen every time the bill comes for a meal. If it were me trying to date now, I’d probably spaz out and ask to meet at Starbucks and try to get there early to buy my own coffee. See, it’s a good thing I got married when I did! I’m so bizarre with this type of thing!

Does it need to go in a budget?

I have a really awesome male friend who is trying to meet someone right now online. He goes on about 2-3 dates every month and always does it big. He’s so sweet and generous and typically spends $100 on his dates because he chooses nice restaurants or does dinner and a movie. If you think about it, that can run him about $300 a month! Sometimes he goes on second dates and sometimes he doesn’t, but he’s really old fashioned and always puts his best foot forward.

I’ve tried to tell him that maybe he should start off small with a coffee date, but he always aims to impress. At that rate, though, he needs to make dating a part of his budget. Regardless of how much money you make, $300+ a month on nice dinners out is a pretty significant number, and it’s something that needs to be carefully thought out and planned for. Otherwise, if you haven’t met “The One” in 6 months, you would have spent close to $2,000 trying. At that amount, online dating becomes more of an expensive hobby than a way to meet the right person.

Is it an investment?

Online dating really is so interesting. Don’t you wish you would have thought to start a dating website a few years ago? The marketing really is flawless. Is there really a price you can put on getting the opportunity to meet your one true love?

It makes sense why my friend spends so much money every month trying to meet someone. He has the idea that if he stops now, “The One” could have been the next woman he took out to dinner. So, he keeps trying month after month and the online dating websites keep providing new women in his area that share the same interests as he does.

I think I’ve mentioned before that I met my husband on Facebook, so I definitely believe that you can marry someone you met online. The big difference in my story, though, is that Facebook is free! It didn’t cost me a dime to meet my husband. However, if I had met him on an online dating website, would I have considered the expensive monthly fee the best investment I’ve ever made? Maybe so.

Ultimately, one could argue that there is no limit to the amount modern dating should cost if you meet the right person in the end. However, I would urge anyone who is dating online to take a step back and really think about the cost. Are there other ways you can meet someone that are free? Is it taking over your life or is it just a casual thing you check from time to time?

These are all interesting things to think about and of course, we welcome your opinion on this in the comment section below! So, how much do you or did you used to generally spend on dates?

***Photo courtesy of https://www.flickr.com/photos/stevendepolo/3354726208/

Staying At Home Or Sending Your Child To Daycare – Which Is Better Suited For You?

The following post is by MPFJ staff writer, Grayson Bell. Grayson, who runs the finance blog Debt Roundup, is a fan of personal finance, brewing beer, and working on cars.

Being a relatively new parent, I have battled with the decision to put my son in daycare or stay at home with him.

I think this might be a debate that all parents go through. These days, it is not as common to see one partner stay at home to take care of the children. Many homes are two income households. I am not going to get into why this might be the case, but I will talk about dealing with the daycare versus stay at home debate. This article is just how I handled our situation and how I created a cost versus benefit analysis.

Daycare

Let’s face it. Daycare is expensive.

Depending on where you live, daycare can easily go into the thousands. In my area, you easily pay over $1,000 per child per month to keep them in daycare. You might gasp, but that is how the cookie crumbles. While there are options for daycare in our area, you get what you pay for. You do not want to go cheap when it comes to someone taking care of your child.

Daycare Costs

As I stated, daycare is costly. The good ones in our area easy go over $1,000 per month and you only get one week of not having to pay each year. This is our vacation week. On any other week, we would have to pay for him to be there, no matter if he was there or not. They can charge this type of rate because there is a lot of demand for good daycares. Some in our area have an 8 to 9 month wait.

If you are paying $1,000 a month, then you are hitting $12,000 per year on childcare. Having to dish out this much money per year can be daunting. It also may not be feasible for many. Always take time to check over all of the costs for a daycare you might be interested in.

Benefits of Daycare

There are some that say there are no benefits to daycare. I tend to disagree. My son has been in daycare for a little over a year. While he did get sick often in the beginning, I can see that he is learning a lot and the rampant sickness has subsided. He is being socialized with other kids on a daily basis. He is making friends and he always has a smile on his face. He gets to play all day and seems to enjoy it.

Putting your child in daycare also allows you to stay at work. While this might not be as big a deal to some, I know it is for many. If you are dual income household, you may have to continue to work in order to make ends meet. Daycare allows for this flexibility. Some people, like my wife, aren’t ready to leave the workforce when they have a baby. My wife enjoys her career and doesn’t want to stop it just yet. Daycare has provided the option for her to continue working and building her career.

When you put your child into some daycares, you can also get a tax credit. The tax credit is for child and dependent care. This credit goes up to $6,000, but there are a few stipulations in order to qualify.

• The child has to be 12 years or younger
• The daycare facility must meet certain federal guidelines
• You must have earned income
• Having your child in daycare must allow you to work or look for work. This can also apply to going back to school full-time.
• The child typically has to be your dependent.

The total credit is 20% to 35% of your day care expenses, depending on how much you earn. Learn more from Publication 503 from the IRS.

Some employers allow the ability to apply for a dependent care flexible spending account. This is similar to the health FSA, but it is only dedicated to caring for your child. You can use pre-tax money to pay for daycare, babysitters, and day camps. This is a big savings, but you typically can’t use both a dependent care FSA and the tax credit. You will need to check which one you would benefit from most.

Staying at Home

Being a stay at home parent can be very rewarding. It doesn’t matter if it is the mother or father. Staying at home to watch your child grow is why many parents do it. You get to bond with your child and teach them things that you want them to learn. That being said, there are costs involved with staying at home, but there are great benefits as well.

Costs of Staying at Home

The biggest cost to stay at home is the income you would be losing after leaving the workforce. This is one of the biggest factors to why some people don’t stay at home with their children. This was an important factor for us. When you stay at home, you tend to use more electricity, eat more food, and do other things that will fill up your time. These all increase the costs of being a stay at home parent. It can be costly to entertain a growing child as well with toys, shows, games, and travel.

The biggest decision for us was the loss of one income. My wife makes more than what we are charged for daycare. Since we would be losing a substantial amount of money, it made more sense to go the daycare route. This type of calculation should be made before you decide one way or the other.

Benefits of Staying at Home

This is where the calculation really goes to the emotional side. There are many emotional benefits to staying at home with your child. You get to bond and teach your child. You get to spend your days watching your child grow up. This is the biggest benefit for being a stay at home parent. Some will say that a benefit is not having to work, but I would disagree. Raising a child is a lot of work. It might even be harder than the job you left to have a child. Yes, you don’t have to travel into work, but you are still on the clock!

There are also benefits for your child to have a stay at home parent. They get to bond with said parent. They won’t face as many illnesses compared to daycare. They will also learn exactly what you want them to learn. It is hard to measure the true benefits for your child, but the emotional aspect can be great.

Along with being with your child, many parents see that they drive less and spend less on clothing. When you don’t have to drive to work and have dedicated work clothes, those expenses are reduced.

When you are having a discussion about daycare versus staying at home, you should think about doing a cost benefit analysis. For my wife and I, the benefit of daycare outweighed the cost of it. While being a stay at home parent would be exciting, it is not in our plans at the moment. This would all change if we had another child. The costs of having two kids in daycare would really swing the equation for us. This is something that you would need to discuss when this important conversation comes up. No matter which way you decide to go, make sure to make the best decision for your family. Each situation is different.

How about you all? In your situation, would using daycare or staying at home make more sense economically and emotionally? What factors influence your decision the most?

Share your experiences by commenting below! 

***Photo courtesy of FreeDigitalPhotos