Category Archives for Relationships

How to Handle Friends Who Make More Money Than You Do

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

I am at a point in my life where many of my friends are finally making the big bucks.

They’ve worked extremely hard, and have been working long enough to move up in their work place and earn salaries that are quite high.

I, on the other hand, just started my own business, and I have a husband in medical school. While I know that we will enjoy the fruits of our labors somewhere down the line, the truth is that we are far behind many of our friends when it comes to investments like home ownership and retirement. Sometimes this makes friendships more interesting, and sometimes it makes it more awkward.

If you also find yourself in a position where you hang out with friends who make more money than you do, here are a few ways to keep things in perspective without ruining friendships along the way.

1. Treat Them to Dinner Every Now and Then

We have some very generous friends, and because they know we’re in a lower income situation, they always offer to pay for our dinners when we go out. While it’s very kind of them, we do like to feel generous ourselves from time to time! So, every now and then, we’ll invite them out on our invitation and make sure they know that we’re footing the bill. It doesn’t have to be at the fanciest restaurant in town. After all, it’s the friendship and the conversation that really matters not the price of the meal.

2. Choose Activities that Work for Both Budgets

The one thing you don’t want to do with a friend who makes more money than you is shop.

It’s no fun to go to the mall with your friend when all she wants to do is go to high end stores that you can’t afford. Since things might not be equal in terms of comfort level at the mall, do something else that works for both of you. For example, you can go to a big craft fair, a flea market, or go antiquing. You can also go play a game of tennis or a round of golf. Invite them to your yoga class or go see a movie. All of these activities are ones that won’t make you feel awkward because they should all be relatively affordable for both of you.

3. Be Happy for Them

I know it’s hard sometimes to be happy instead of jealous, especially when someone you’re close to gets a huge raise when you’ve been wanting one for years. Instead of turning green with envy, though, try being supportive and happy for them! Negativity won’t make you feel better so instead try to learn from their successes and know that your own success may be just around the corner.

4. Be Honest With Them

Some people who make a significant amount of money can be braggy. They might not even know they’re doing it so if their comments make you uncomfortable (like when your friend talks endlessly about his latest vacation or her latest shopping spree) you can always be upfront and honest and just tell them that it makes you feel down! Like I said, they may not even realize how their words affect you unless you tell them.

5. Decide Whether or Not to Talk About Money

I have this habit of talking about money a lot. Maybe it’s because it’s my job is to write about it as a full time finance blogger. Basically, because of my work, I just have money on the mind all the time. However, I have found over the past few years of being in this profession that lots and lots of people are really uncomfortable talking about money.

Often times, I wonder if it’s my own fault that I get into awkward situations with money because I’m constantly talking about getting the best deal or how outrageous my rent is or my substantial student loans.

I don’t mind discussing any of those topics, but I’ve realized that sometimes I need to tone it down because my constant harping on the high cost of med school – for example – makes some people think I’m destitute when I’m really not.

I’ve realized that when it comes to my friends, I need to make a decision whether or not to bring up money at all. You can do the same. Ask yourself: Are you going to discuss the stock market? Are you going to discuss your salary? Are you going to discuss the price of your home? Going over some of these scenarios ahead of time will help prepare you if some of these topics that might come up at the dinner table.

How about you all? Do you have friends who make more money than you do? Does it ever make things awkward?

Share your experiences by commenting below! 

***Photo courtesy of https://www.flickr.com/photos/danielavladimirova/3717721508/

A Complete Guide To Saving Money On Your Taxes By Cleaning Out Your Closets

The following post is by MPFJ staff writer Travis.  Travis is a customer blogger for CareOne Debt Relief Services, and also appears weekly at Enemy of Debt.  Travis candidly shares his personal journey to pay off $109,000 of credit card debt and the tips he’s learned along the way. As a father and husband he provides a unique perspective on balancing debt, finances, and family.

I was doing my usual routine of putting away laundry on Sunday night when I realized that I had more shirts than I did hangers.  As I went through the closet piece by piece looking for unused hangers hiding between shirts, I shook my head realizing I don’t wear more than a third of the pieces of clothes that I own.

It was time to do a closet purge.

I went through not only my closet, but also my dresser drawers removing anything that I hadn’t worn within the last year.  When I had finished, there was a massive pile of clothes in the middle of my bedroom floor.

Normally, this is where I would stuff everything into a couple of heavy duty garbage bags and drop them off at Goodwill.  The last time I did this, my neighbor asked me if I had received a receipt for my taxes.  I remembered being asked by the guy at the donation center if I wanted one, and  I knew I could use charitable donations to benefit my tax return, but I just didn’t know enough about the process  so I declined.

So, I did some research on donating non-cash items to charity.

It turns out you can’t just load up some garbage bags with your old stuff, throw them out the back of your van at the Goodwill drop off center while barely slowing down, and write a random dollar value on your tax forms.

There’s some things you need to know about when donating non-cash items to charities.

1. Charities can’t sell worn out or broken items.  I separated my clothes into two piles.  One of clothes that were soiled, stained or ripped, and another of clothes that were in gently used condition.  The first pile was loaded into a garbage bag and tossed outside to be disposed of.

2. You have to estimate the value of your donation to report on your tax return:  I separated the pile of gently used items by type:  shirts, pants, sweatshirts, and sweaters.  Then I grabbed my laptop, and created a spreadsheet inventorying every article of clothing I was going to donate.

Then, I downloaded the donation value guide from Goodwill’s website and assigned a value to each item of clothing, letting the spreadsheet add up the total for me.

3. You have to have documentation to prove you actually donated your items: I printed out the spreadsheet, and loaded the clothes into bags and into my van. Once I got to Goodwill, a gentleman helped me unload my items, and asked if I wanted a receipt.  At my request, he signed and dated a receipt and gave it to me. I also asked him to sign and date my printed spreadsheet just for cross verification of my donation.

Of course, this isn’t quite the end of the story, as there is another chapter to this story once you reach tax time.

• Donations to charities are only reported on your taxes when you can itemize deductions. If you commonly use the standard deduction, going through the effort to assign a value to your donation may not be a good use of your time.

• Non-cash donations such as these will be reported with your other itemized deductions on Schedule A of tax form 1040

• To claim a donation of property valued at $250 or more, you must have written acknowledgement from the receiving organization describing the property donated. This is why I had the Goodwill employee sign and date my spreadsheet, as well as fill out (and sign)  the receipt given by them with a general description of what I donated.

• If the total of all non cash contributions in a given year exceeds $500, you must fill out section A of IRS Form 8283 as part of your tax return.

• I can’t see myself doing this anytime soon, but it’s worth mentioning that if you ever donate a single item, or a group of similar items that has a value exceeding $5000, you’ll need to fill out Section B of Form 8283 which requires a qualified appraisal of the item(s), and include them with your tax return.

As I drove across town home from dropping of my items at Goodwill, I wondered just how much my donation would save me on my taxes.  Doing a little research, charitable contributions will save you roughly 25 cents for each dollar you donate.  It does depend on what tax bracket you fall into, but it’s a good guideline to start with.

Using the guideline from Goodwill, I estimated the value of my donation at $207.  Twenty-five percent of that is just under $52.  Looking ahead, we’ll be doing the same closet purge for each of the four members of my family.  Doing a little rough estimating, that means that we could potentially have $828 worth of donations to Goodwill this year, with a rough savings on our taxes of $207.

Cleaning out our closets accomplishes three goals:

1.)    Declutters our home

2.)    Provides quality items to charity that can help less fortunate people

3.)    Saves us money on our total tax bill.

It did take some time to enter all the items and their estimated values into the spreadsheet.  However, the effort of cleaning out my closet and drawers, separating gently used from throw away items, and dropping the items off at Goodwill are things I was going to do anyway.

How about you readers, do you donate items to charity?  Do you claim them on your taxes or do you do what I did and just drop them off?

Image courtesy of Stuart Miles / FreeDigitalPhotos.net

10 Money Tips Parents Should Teach Their Kids

The following post is by MPFJ staff writer, Shondell of Call Me What You Want, Even Cheap. She blogs about her recent car loan and mortgage pay off and a whole bunch more. Check out her blog right here.

One of the most important lessons that your children need to be taught is about money. Children who are good at handling their own money grow up to be responsible adults with the potential to become wealthy. Unfortunately, this is one subject that is almost entirely left out in schools, so it falls on the parents to teach them this lesson.

So here are 10 money tips parents should teach their kids:

1. “Money doesn’t grow on trees”: A lot of kids have no idea how hard their parents work to earn money. As a result, sometimes they become very demanding and want to have everything they see. This is of course is a recipe for disaster, and often times these children grow up to become spendaholics. Tell your children that money doesn’t grow on trees and that one has to work hard for it.
2. “It’s cool to save”: Most kids want to spend their money as soon as they get it. Spending money makes them feel cool. To teach them to save money, you can tell them over and over that it’s cool to save and “uncool” to spend all of their money, explaining how they will be able to buy the things they want once they have saved up enough. Don’t forget to do the same thing in your own life, so the kids also see by example.
3. “Open a saving account”: Once your kids have saved enough money to open a bank account, help them to open one. Find one that is child friendly. This will teach them a practical lesson about banking, which will come in very handy as they grow up. Encourage them to save every penny they can spare.
4. “Be patient for the things you want”: By nature, children are impatient and want instant gratification. If you give in to all their demands, they will grow up to become difficult adults with wasteful habits. To encourage sound money habits, teach your children to be patient for the things they want
5. “Keep track of your income and expenses“: Just like adults, children need to learn to keep track of their income in order to manage their money. If you are not in the habit of doing so, then it’s never too late to start a budget. Teach them to keep a record of every penny that comes their way and every penny they spend either in a notebook or an Excel worksheet.
6. “Always spend less than what you have when buying anything“: Children rarely think of the future and spend every penny they have on the things they want. This often develops into a habit as they grow up. Teach your kids that spending all their savings is a bad idea. Teach them to spend, give, and save so it becomes natural when they are older.
7. “Donate to charities”: Teaching children to donate to charities is a great way to show them the importance of giving back, for a more fulfilling life. Giving can teach children responsibility because they are thinking about others, and not only themselves.
8. “Investing can secure your future“: Every child needs to be taught that smart investing can create a lot of wealth down the road. Teaching them the basics of investing and showing them some of the things you invest in, can give them a better understanding of what they can do with their money when they are older.
9. “Use every income opportunity available”: Children who learn to earn money from an early age often grow up to become wealthy adults. Teach your kids to look for money making opportunities. They are all over the place, from starting an online business, to raking the neighbor’s leaves, shoveling the snow, and having garage sale. Teaching them to have multiple streams of income will go a long way once they are older.
10. “Borrowing and paying interest can be dangerous”: Once children develop the habit of borrowing money whenever they need it, it becomes quite difficult to stop. This can land them in trouble again and again throughout their life. Teach them by example how borrowing and paying interest can be very expensive. You can even have fun with it, to teach them a lesson. Lend them some money and make them pay a high interest rate every month (similar to what a bank charges. Don’t forget to charge them a penalty if they are late). This will be a good way to teach them a lesson on the dangers of borrowing.

Some parents do a very good job at teaching their kids about money and some don’t. If you belong in the latter category, there is no need to lose hope. You can learn as you teach your kids and become a better money manager yourself in the process, which will go a long way in solving your own financial problems.

How about you all? What are some additional money tips you teach your kids?

Share your experiences by commenting below! 

***Photo by Ingrid Callot

How To Talk To Your Spouse About Finances: What Is Their Financial Language?

The following is a guest post by MITM from Naked Budgeting. Enjoy! If you’re interested in guest posting on MPFJ, took a quick look at this post, then shoot me an email and we’ll get the party started! 

I was talking to a friend of mine at the park a year or so ago and mentioned that I was facilitating a Financial Peace University at our church.  I said he could join if he wanted. 

He said that they had plenty of money and weren’t worried about it.  I replied that that must help avoid any financial fights with your spouse.  He gave me a strange look and said, “Hell no.  We fight about money all the time.”.

I was surprised, but the lesson I learned was that success with money isn’t necessarily all about having more. 

My friend had plenty.  But, he and his wife hadn’t figure out how to not fight about it.  My friend’s solution was the math of having more.  But, it takes a different kind of math to keep the relationship side of family finances strong.

Whether you have a good relationship with your spouse around money or not, each of us has a “financial language”.

In my post about the financial statements, I talked about understanding how the financial statements work together is the foundation and after you have that understanding, a balanced approach is the key.  For instance, if you are really good at keeping expenses low but have no income, then you have no money to save.

So, increasing income AND lowering expenses is where the magic happens.  Same goes for the balance sheet assets and liabilities.  There has to be a balanced approach.

So, get to the point! What is this financial language?   Finance is about the math.  And they spend too much!

Okay, here is an example.  I’m always coming up with hair brained ways of making a little extra income.  I know my career is my biggest sources of income but I’m plagued with “What else can I do to make more on the side?”.  I even keep a running list of little business I’ve thought of and sometimes I prototype them or work on them and sometimes I don’t.  But my head is usually in the “Revenue” and “Assets” spaces.

My wife on the other hand glazes over when I talk to her about income or assets.  And for a long time I was frustrated by this.  She and I both want to be debt free and financial secure, so I thought it was strange that she didn’t want to make more money.

So I had to realize a few things about her in order to smooth out the conversation.  A psychologist would probably say that I had to understand her.  And they would be right!

Her financial language

1.) I realized was that she was much more focused on controlling expenses and risk.  Which included saving on monthly bills like energy and groceries (both on our monthly income statement).  But it also included reducing debt which does both because it lowers a monthly mandatory payment and our risk of default.  These are perfectly appropriate areas to focus on but they are just a few of the pieces to building a balanced financial approach.  My finance language is different, but together we can appreciate each other and manage the whole picture.

2.) I also realized that she is better at couponing and finding deals than I am.  It is one of her strengths.  On the other hand, she doesn’t want a big career and doesn’t think about buying cash flow assets or investing.  So that is one of her weaknesses.  Her parents saved throughout their life and socked most of it away in cash.  So investing was something they didn’t do or teach their kids.  Getting into rentals was a big fear for her but after we’ve done it for several years, she has come to understand that they have risk but there are ways to mitigate it and they can be good investment to help us in the long run.

Oh and just talking to her about anything like stocks or bonds is guaranteed to put her to sleep.  Believe me.  I’ve done it!

3.) I also had to understand her fears, hopes and dreams.  I thought I knew her but talking about these things in a financial light brought out all kinds of new things I didn’t know.

• Hopes and Dreams: She and I are aligned in that we want to eventually be financially free.  That doesn’t necessarily mean rich, but free to give and live.  Probably in that order.
• Fears: She is a stay at home mom, so I had to realize that she has some fears that if I was to pass away or be laid off she would be stuck with big monthly expenses and no income.

So, after many exploratory conversations and making plenty of mistakes I have a decent understanding of her risk tolerance, what parts of our financial picture she understands and is comfortable with, and her strengths and weaknesses.  I would say that her financial language is focused around expenses, debt, safety and security.  Mine on the other hand is on income and assets and taking risks.

Here are few tips to having those conversations

1. Listen

Not just to what they’re saying, but to what they’re feeling and thinking about what they’re saying.  And if you aren’t hearing it, ASK.  Sometimes when she talks about something in our finances, I’ll ask her about it.  “I wonder how our parents dealt with this?  Do you know how your parents did?”.  Understanding her financial upbringing makes a big difference.

2. Listen when you talk.

Huh!!??

Ponder this … “Communication only exists in the mind of the receiver.”  If you’re saying X and she’s hearing Y, then you’ve communicated Y.

So, do you understand how he or she is hearing you? When I talk to my wife about about something and I’m sensing that we’re not thinking about it the same way, I try to ask “What do you think about that?” or “How do you feel about that?”.

Are you getting the picture that listening is a big part of it.  You’re trying to learn about them!

Now comes the fun part!

• I can now look at our financial picture and put her in charge of some of the pieces.  We do it together but she has more responsibility for certain areas.  Because she has strengths I don’t have and I love it!
• We can talk about our financial picture in terms that she understands.  It avoids a LOT of miscommunication.
• We can coordinate our goals to work together because they have the same end result of building our net assets and achieving financial freedom.
• We can openly discuss our fears, worries, hopes and dreams.  Weekly budgeting meets can be open discussions about all of that.  And they deepen our relationship far beyond the financial aspects.

Here is our current financial journey summarized for the last few years and going forward.  See if you can pick out how I’ve had to learn how to adjust our approach to her.

First, we had to invest in the house.  She stays at home and had an equal vote in picking it.  So making it liveable was priority #1 and I working on making that happen during 2010 and part of 2011.

Second, we worked on building up our emergency fund of 6 months.  We did that in 2011 also.  So we had addressed two of her major concerns, secure home and cushion in case something went wrong.

Third, we wanted to pay down debt.  This was a bit of a negotiation because I wanted to start investing more.  So we settled on the goal of investing 15% of our income and funding our kids ESAs and after that using everything else to pay down debt.  We hit the 15% goal in 2013 and started paying down debt.  That is the stage we’re in right now as of the end of 2013.

Next step is that once we pay off debt our next goals are to invest in more rentals over time.  Debt will probably take us about  8.5 years, but hopefully sooner.

These aren’t just casual conversations.  We have a budgeting notebook that somewhere has a page outlining these goals.  Actually it is several pages because it took several conversations.

Questions to ask your spouse

1. What are you worried about when it comes to our finances?
2. What would you do differently if we had no debt and money to spend?
3. What do you want to do more/first?  Pay of debt or invest for retirement?
4. Would you be willing to work with me on setting some financial goals and learning how to achieve them together?
5. Do you have a good grasp or our finances such as how much we make and what our expenses are.  If not, how can we work on simplifying and learning them together?
6. If we managed our finances, what part would you like to be in charge of?  Expenses, saving for short term goals, tracking our emergency fund, tracking our debt paydown progress?
7. When we talk about finances how do you feel? How can I help improve that?
8. When I talk to you about finances or budgeting how can I improve?
9. Do you feel like we’re on the same page when it comes to our goals around income, spending, saving, debt?  Which one are we most aligned on and which one do we need to come together more on?

Feedback

Although I think we’ve made great progress in this area over the past few years, I don’t always get it right.

I’m always wanting to learn, so if you have any tips on what has worked for you, please leave your feedback by commenting below! 

How Can Normal Folks Make Their Child A Millionaire? – Part 1 – The $1 Per Day Automatic Transfer

Recently, I  read a fairly intriguing book by Kevin McKinley, CFP, entitled, Make Your Kid a Millionaire: 11 Easy Ways Anyone Can Secure a Child’s Financial Future.

As the title suggests, the book’s overall message is that if you take some well-timed (early), pro-active steps, it is possible for people of many economic backgrounds to easily accumulate a large amount of wealth for their child by the time the child reaches retirement.

While there are many specific points covered in the book regarding trusts, taxes, rules of children earning income, etc, there are key two questions/themes that I wanted to explore as a result of reading  this book. These are listed below:

• Question # 1 – What, when, why, and how should you start saving for your child’s financial future/retirement?
• Question # 2 – Having established a savings strategy, what is the best type of account/vehicle in which to save for your child?  

Part 1 of this series will cover Question #1. Let’s get started!

Chapter 1 of McKinley’s book starts off with a brief ~100 word mentioning of a very potent savings strategy to set up a bright financial future for your child. And, I feel it is worthwhile to spend some more time discussing/elaborating on it. He states that setting aside “$1 every day will result in a millionaire kid later,” however, does not really get in to any additional specifics to execute this strategy.

Why Saving $1/Day For Your Child Can Create A Millionaire

In a nutshell, saving only a small amount of money each day can lead to a large amount later due to the concept of Time Value of Money (TVM), or as it’s often coined, the Miracle of Compounding Interest. Both of these terms have been discussed several times previously on my site.

This is the idea that saving (instead of spending) money today will accumulate to be worth more later in time because interest is earned each period, which then is eligible to earn future compounding interest on top of itself.

What is the Best Way to Save $1/Day For Your Child?

If you’ve been reading this blog for a while, you likely know what my take will be on the best way to save small amounts of money, consistently, over long periods of time.

That’s right – Automatic, pre-scheduled transfers from your checking account to your savings account/vehicle of choice (accounts will be discussed in-depth in part 2 of this series). 

The reasoning behind using automatic transfers is 1) so you don’t forget to make the transfer each day/week/month and 2) to play a little psychological “trick” on your financial mind to cause you to miss the money less.

While each financial institution/account will do things slightly different, the ones I have experienced thus far will, unfortunately, not allow you do make 31 daily $1 transfers each month. Instead, many of them will have either $10 or $50 transfer minimums. This is not a show-stopper. You simply adjust the contribution frequently to match what $1 per day would equal and then proceed as planned, accounting for it in your zero-based budget.

When to Start Saving $1/Day For Your Child

Of course, the ideal answer here is “as soon as possible,” stemming from the fact that the earlier you can get compound interest working for you, you will have almost exponentially more money in the end. Unfortunately, I don’t think that is very realistic if you’re in a situation where you don’t plan on having kids for several years in to the future.

However, a good compromise to utilize going forward might be to start saving the $1/Day 9 months to 1 year before the child is born.

So, Just How Much Money Can $1/Day Translate To For Your Child’s Retirement Years?

To my fortunate surprise, saving just $1 per day translates to more money than I would have guessed before beginning this analysis.

For illustrative purposes, I put together the Google Docs worksheet at the following link for you all to download and play around with if desired – How Much Money Can $1 Per Day Lead To?

According to The Washing ton Post, the average age a person has their first child today is between the ages of 25-26 years old. If we assume that a parent starts stashing away $1 per day at the age of 25 (~1 year before the baby is born) and invests the money in a stock market mutual fund earning 10% per year, the following results are obtained:

• Saving $1 per day until your child finishes college (~ age 23) will yield >$1.9 million for your child when he or she reaches retirement age. 
  • If you wanted to be aggressive and save $1 per day PER PARENT ($2 per day) for your child in the same fashion, this would translate to >$3.9 million.

Intriguingly, and also demonstrating that compound interest over long time periods is the key factor in savings growth here is the observation that if you were to continue saving $1 per day for your child until they are AGE 65 (the parent is age 91), it results in a nest egg of $2.1 million, only 11% more than if you stopped contributing 40 YEARS EARLIER when the child was 23 years old. Crazy, eh?!

Conclusions / Looking Ahead to Savings Vehicles (Part 2)

Clearly, just a little bit of foresight/financial knowledge and only several minutes of your time to execute the strategy of saving just $1 per day for your child can lead to a significant amounts of money for his or her future due to the workings of 65 years of compounding interest.

Of course, these calculations do not take inflation in to consideration, meaning that being a millionaire when your child retires may not mean the same as it does now. In addition, if you want your child to go to a fancy private university that costs $40k per year, saving just $1 per day is not going to be sufficient, as you’d only have around $40k saved up by the time your child goes to college.

We’ll take this in to consideration in Part 2 of this series when we examine which is the most appropriate vehicle/account to save money in when trying to make your child a millionaire. Stay tuned!

How about you all? What sort of money saving strategies, if any, do you employ for your children?

Share your experiences by commenting below! 

***Photo courtesy of http://www.flickr.com/photos/85583346@N00/167558529/sizes/

How To Compromise On Finances In Your Marriage

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

I write a lot about money and marriage because I think it’s such an important topic. Not only that, it’s something that can be constantly improved and worked on. Much like marriage itself, compromising on finances takes a significant amount of work and communication, and it’s definitely worth all the effort you put into it!

First, when it comes to money and marriage, I think it’s completely natural to want to do everything your way. For example, I always think my money ideas are the best ideas, never mind that my husband may have a few ideas of his own! However, I’ve realized over time that the whole point of a marriage is to work together on challenging issues, and becoming financially independent is one of the biggest obstacles and most rewarding goals in life. So, what’s required to achieve these goals is a lot of compromise, listening to each other’s viewpoints, and talking through important financial topics.

Below are some of the ways that I’ve compromised when it comes to money and marriage, and I’d love to hear some of the ways you’ve worked out money issues as well!

1. Short-Term Vs. Long-Term

When my husband and I got engaged, we had to go to a pre-marital weekend retreat to get married in the church. Instead of grumbling about this minor inconvenience, we decided to actually try to get something out of it, and it was actually really valuable.

One of the exercises that we did was sit back-to-back and answer important questions by raising our hands. For example, the proctor would ask a question like, “Who’s going to cook dinner most of the time in your house?” If you thought it was you, you had to raise your hand then turn around to see if your partner agreed.

We were doing pretty well with this exercise until we got to the questions about money. When the proctor asked, “Who will be handing the finances in your marriage?” both my husband and I shot our hands up. We both thought we should be the one handing it!

It was a funny moment, but it was also an important one. There we were just a few months from getting married after 4 years of dating, and we had never talked about who would handle the money!

The proctors had a great suggestion, one we use to this day. They said to have one person handle short-term finances and one person handle long-term finances. Ever since then, we’ve never wavered. He handles all of our investments, retirement funds, and makes decisions like choosing stocks. I pay all of our bills, handle our savings accounts, make money goals, and keep him updated on our progress. It really is the perfect balance, and it allows both of us to feel like we are contributing to our overall financial goals.

2. Have Your Own Money

Veteran couples swear by this tip. Let each person have a set amount of spending money every month. I didn’t do this at first. I thought that it wasn’t a big deal, until my husband finally told me that it really bothered him every time he had to ask for money. After all, he’s almost 30 years old and in medical school. I think he can probably handle a bit of cash! I didn’t even think about how our system affected to him until he told me that so ever since then, I split my money into envelopes when I get my paycheck, and I always give him money just for him to use, no questions asked.

This makes him feel like more of an adult, and it also helps alleviate the impression that I’m always looking over his shoulder when he buys things. Now, he can go on campus and buy himself a coke without feeling odd about it.

3. Forgive Each Other

When it comes to money and marriage, we’re all going to make mistakes. It’s unavoidable. I’ve paid my husband’s credit card late completely on accident and felt terribly about it. In the future, he might choose a stock that plummets the next day. It happens. It’s life.

Of course, some mistakes are worse than others. If your spouse drained your retirement fund to go to the casino, that’s a different story, but for day-to-day blips, it’s important not to blame each other and remember which team you’re on.

I’m sure there are many more tips out there for compromising when it comes to marriage and money. Essentially, it’s all about maintaining communication and respecting each other when you make decisions. In the future, I know my husband and I will have even more to learn about finances and marriage as we continue on our journey, but it makes me happy to know that I share my goals with someone who is just as willing to work hard to make them happen.

How about you all? How do you compromise when it comes to money in your relationships?

Share your experiences by commenting below! 

***Photo courtesy of http://farm7.staticflickr.com/6235/6355220839_792984400f_o.jpg

Carnival of MoneyPros – May 12th, 2013 Mother’s Day Edition

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Welcome everyone to the Mother’s Day, 2013 edition of the Carnival of MoneyPros! 

To celebrate Mother’s Day, in this edition, I’ve sprinkled in between the posts a few images of me and my Mom together in various locations throughout the world dating back to 2007.

I hope you enjoy the pictures, the posts, and can come back to visit My Personal Finance Journey on my non-carnival days as well. If this is your first time stopping by the site, you might take a look at the “About” or “First-Time Visitor” pages so we can get more acquainted! Thanks! – Jacob

Alexis @ FITnancials writes I Want a Credit Card – But I Have No Credit – I want a credit card. Yes, I just said that! I’ve been on the hunt for one, and I’ve even applied for some, but I’ve gotten denied. I have no credit (I’m 19, my car loan isn’t in my name, and I have no other credit cards), so it is hard for me to find a card to get approved for.

Michelle @ Making Sense of Cents writes $7,859 in April Extra Income and Goals – April was another awesome month. I wasn’t able to crack the $8,000 level of extra income just yet (this is after expenses), and I was actually $3 lower than last month’s amount. Still great to me though

Emily @ Evolving Personal Finance writes Money Management Systems Visualized – Visual representations of four basic money management systems couples use.

Michael @ Financial Ramblings writes Effect of the Internet Sales Tax – It’s looking more and more like the Internet sales tax is going to happen. I’m talking here of course about Congress giving states more power to collect sales taxes that people should already be paying. But what effect will that have on small businesses?

Tori @ Money Life and More writes Saving Money On Weddings: If It Sounds Too Good To Be True… – I was so proud of myself for saving lots of money and getting a fabulous wedding dress! About 3 weeks after placing my order my dress arrived at my future mother in law’s house! Deep in my gut I could tell something was not quite right when she called and told me it had arrived, but in a small box…..

Mike @ The Financial Blogger writes Since When is Paying off Your Debts is a Good Thing? – Have you ever borrowed money to accelerate your asset building?

Green Panda @ Green Panda Treehouse writes Jobs to Watch Out For So That You Don’t Get Scammed – There are certain jobs that you need to watch out for when you’re in your 20s.

Martin @ Studenomics writes How Do You Survive Financially in a Large City Without Losing Your Pants? – How does one survive?

Pete @ Intelligent Speculator writes Facebook (FB), Still A Good Buy At These Levels? – What are your thoughts on Facebook?

Steven @ MyDividendStocks writes Use Fast Cash Methods for ‘Needs’ Not ‘Wants’ – A good way to consider good financial health is to have enough money to meet our basic needs and live a comfortable life. However, as humans, we have material desires and we want that extra dough to fulfil those wants. Be it the next fancy gadget or a fast sports car. We all have a list of things we want.

Daniel @ Sweating the Big Stuff writes How Much Do You Need To Save To Retire 1 Day Early? – Do you want to retire earlier? Find out how much you need to save today to be on the golf course one day earlier.

Amanda L Grossman @ Frugal Confessions writes How to Extend Your Cell Phone or Smart phone’s Package Almost for Free – Unlimited data, texting, and talking are a pipe dream for some, especially the unlimited data.

Corey @ 20s Finances writes Tax Deductions for Having a Baby – Your life changes dramatically when you have a baby. Your taxes change too.

Arnel Ariate @ Money Soldiers writes What Makes You Shy Away from Stock Trading? – Here are some of the reasons that compel people to avoid stock trading. Though the stock market now spells good prospects for the companies as well as for the investors, yet most people prefer to stay away from it.

SFB @ Simple Finance Blog writes How Much House Can You Afford – Most of the problems happening these days in the real estate market are mainly because of the homeowners outstretching their budgets to own the houses they really couldn’t afford but desired.

Ted Jenkin @ Your Smart Money Moves writes The Drug Of Buying ‘Stuff’ – The weather is warm and in the United States we are about to start enjoying some of the national pastimes of our country.

CAPI @ Creating a Passive Income writes For Rent: Do’s and Don’ts of Renting Out Your Space – So you’ve decided to rent out your space! This can be a great income source if you do it right. Here are some do and don’t tips of renting out your space.

Tony @ We Only Do This Once writes The 80/20 Rule and Procrastination – The 80/20 Rule has been one of the most helpful concepts for my time and life management. Also called the Pareto Principle after the Italian economist, Pareto recognized that people in his society were divided into two group. The vital few were the top 20 percent in terms of money and influence, and the trivial many, the bottom 80 percent.

Kevin @ 20smoney.com writes The Marshmallow Experiment and your Finances – While many people who possess large amounts of money are very smart, others are not necessarily but where able to be at the right place at the right time.

Mike @ Personal Finance Journey writes Free of Charge – Saving on Credit Cards – Credit card news and how it can save or cost you money.

Wayne @ Young Family Finance writes Computers for kids: The Pros & Cons – Children see computers all around them. As soon as they start school they will use a computer in the classroom, and many toddlers are used to using tablets from their early days.

Kanwal @ Simply Investing writes Want To Invest Successfully In Only 15 Minutes a Month? – Here’s how you can invest successfully and spend only about 15 minutes a month on your investments: Keep it simple Ignore the media noise on TV, Internet, Radio, and Magazines Reduce the fees you are currently paying (knowingly and unknowingly) on your mutual funds Keep it simple Invest in quality dividend-paying companies when they are undervalued.

Sam @ Simplefinancialfreedom writes Cost Saving Ways to Reward Employees – In a down economy, many companies are going through financial hardship, freezes, and eliminating bonuses.

Ryan @ Cash Money Life writes PayPal vs. Dwolla: Which is Right for You? – PayPal has been around a long time, but Dwolla has really low transaction rates – which should you choose? Here’s a comparison of the two!

Don @ MoneySmartGuides writes How to Fund the Purchase of a Car – Despite being such an expensive investment of our money, cars have become a crucial part of our everyday lives.

Brock Kernin @ Clever Dude writes Is Overspending Worth It To Help My Son Fit In? – I could have bought cheaper b-ball cleats, but I didn’t…Would you spend more to help you son/daughter fit in?

Crystal @ Married (with Debt) writes Who’s Your Real “Head of Household”? – My husband’s name appears under “head of household” on our tax forms. But his actual role doesn’t exactly fit this title.

Crystal @ Budgeting in the Fun Stuff writes Become a Product Tester for Free Swag – If you are not interested in medical studies. then below are some legitimate, non-compromising, product testing opportunities for you.

Tushar @ Finance TUBE writes Want To Save More Money? Look At Your Waste – Hi! Today I will be talking about if Want To Save More Money? Look At Your Waste. How many pounds do you think the average American waste in food each week? Well according to ABC news the US waste in food each week is 14 pounds.

BARBARA FRIEDBERG @ Barbara Friedberg Personal Finance writes DO YOU NEED A FINANCIAL ADVISER? – Should I hire a financial adviser? Learn the basics of hiring a financial planner.

Robert @ The College Investor writes Better Know a Young Millionaire – Ali Maadelat – Ali Maadelat was nominated as one of the 2012 Marketers of the Year by the American Business Awards, and Forbes Magazine recently named him as one of the Top Ten Consultants who Stop the B.S.

Robert @ Entrepreneurship Life writes Retirement Planning for Self-Employed Entrepreneurs – While there are many amazing benefits of working for yourself, there is one big pitfall compared to people who work for large companies: retirement plans. Small business owners don’t have 401(k) plan matching, but you do have some options to put away money in a tax advantage account.

Robert @ Beat the 9to5 writes Are You a Pessimist, Optimist, or Realist? – I’ve been exposed to all three lately, and I’m a believer that your mindset directly determines the emotional outcome of any situation.

MR @ Money Reasons writes Everything Goes Trash Night – Bizarro Christmas Year 3 – Once a year, we have a trash night in my community where everything can be put out. Oddly, I’ve come to enjoy this day, and so far each year the stuff I toss out is better and better. I enjoy giving stuff to people who are opportunistic and clever!

Jay @ The First Million is the Hardest writes How to Invest Without A Lot of Money – Proving that it doesn’t “take money to make money” and showing how you can get started investing with as little as $100

Kyle @ The Penny Hoarder writes Put Your Pet to Work for You – If you find that your beloved Fido or Fluffy has a natural knack for acting, you might want to consider putting them to work for you. While it can take some time and and does require a lot of effort on your part, it is possible to make your pet the next star if you try.

MMD @ My Money Design writes The Pension vs 401k – The 401k Did Not Kill Retirement – You can compare a pension vs 401k all you want, but the 401k didn’t kill retirement. There are still lots of great options for saving for retirement.

Lauren @ L Bee and the Money Tree writes I Wasted Too Much Time on Boys – I am blinded by the fact that for most of my college career I spent WAY too much time on boys. Time I could have spent becoming better friends with the people I now wish I kept in touch with, or at least time I could have used to do school work, perform in more plays, or keep better track of my finances.

Cash Flow Mantra @ Cash Flow Mantra writes You Get What You Pay For – Quality is often reflected in price. How many times have you tried to save money buying a cheaper item and had it break right away? You often end up spending more money replacing something multiple times where a more expensive initial purchase could have saved money in the long run

Penny Thots @ Penny Thots writes 4 Reasons Why You Should Quit Your Job – Just because the economy is tough, it doesn’t mean you shouldn’t be looking for greener pastures if your current job is intolerable. Here are four reasons why you should begin looking for a new job sooner rather than later.

harry campbell @ Your PF Pro writes 5 Ways to Save Money at Amusement Parks: Sea World San Diego – For some reason, the April showers haven’t quite hit San Diego like they normally do and the weather has been fantastic lately. Warm days and a nice breeze are why I love living in Socal and this past weekend I decided it would be a good time to take my sister(age 5) to Sea World. Even though it wasn’t too crowded, there was still a ton of people there and I couldn’t help but think about how much money everyone was spending.

JP @ My Family Finances writes Alternative Ways to Invest Your Family’s Assets – If you find yourself looking for an alternative investment market or other opportunities to spread your risks, one of the options below might be a good fit for you.

Jason @ Live Real Now writes I Accidentally Bought a Bus – We jumped into buying a bus with no real plan, but there are a few ways we could make our money back. I’m expecting a healthy profit on a pretty short timeline.

Evan @ My Journey to Millions writes How Much Do We Really Know about the Businesses We “Know”? – You could buy stock in these 10 parent companies and basically own every consumer good in existence! Even crazier is to find out that your favorite “pure” product is owned by a ridiculously huge conglomerate.

Ray @ Squirrelers writes Waterfront Living is Not Always Worth the Risks – Many people aspire to living on the shores of water. However, like many things, there are risks that come along with the potential benefits – as this post discusses!

TTMK @ Tie the Money Knot writes Making Small Talk Valuable – Sometimes just being friendly and making small talk can open up some opportunities to make some money!

IMB @ Investing Money writes Companies With No Debt: Are They a Good Investment? – Today we look at a group of companies that have no debt and large cash balances. They look good at first glance, but there can be some downsides. Read here.

Roger the Amateur Financier @ The Amateur Financier writes 15 More Organic Homemade Cleaning Products – I noticed as I was going through the feedback from my Earth Day post last week that (a) people like being able to save the planet, read more for an interesting story!

Michelle @ The Shop My Closet Project writes Yearly reviews are like getting a colonic. They suck. – It’s that time of year again when employees are brought into their direct supervisor’s office and given their yearly review. If they’re lucky, they would have been receiving feedback throughout the year and the review will be a series of good bad, good bad scenarios.

Tushar @ Start Investing Money writes 3 Things You Absolutely Must Do if an Investment Fails – However good you are at picking investments, you will have one that fails every now and then. It is impossible to go through life picking all the right investments and never tripping up.

Jon Haver @ Pay My Student Loans writes Recent Graduates Pay Off Student Loans – With the cost of a college education reaching record highs, it is no wonder that college graduates are burdened by huge amounts of debt. In addition to the high cost of living for most students, there is also the additional expenses associated with student loans. Ready For Zero has created a tool that will help recent graduates pay off their student loans in a timely manner and avoid the penalties that can occur as the result of non-payment.

Kevin @ Passiveincometoretire writes Could Someone Have a Life Insurance Policy On Me Without My Knowledge? – It is highly unlikely, but yes it is possible. Almost all circumstances, however, would prove fraudulent and today’s insurance companies are quite savvy when it comes to debunking such activity.

Little House @ Little House in the Valley writes Compounding Calculations for the Lackadaisical Retirement Planner – This past year I’ve been focused on paying off debt. But, soon I’ll be able to hone-in on retirement savings. Using a simple compound return calculator (because the big retirement calculators scare me!), I’ve calculated some simple savings figures that are much more palatable for scared folks like myself.

Debt Guru @ Debt Free Blog writes Stuck in a Rut? How to Get Out of Unemployment – Stuck in the unemployment rut? We feel for you. That’s why we’ve provided some good, helpful tips on how to get out of unemployment. Read here to find out!

Everything Finance @ Everything Finance Blog writes Home Ownership: Would You Move to a Lower Cost of Living Area? – Sure, location is everything, but we’re considering not just changing location within the suburbs of Chicago, but changing location by getting out of the city and the high cost of living. A three hour drive in any direction would put us in an area with much more affordable housing, where we could buy our dream home for less than $200,000 and pay property taxes of less than $5,000 every year. Is it worth it?

David Leonhardt @ The Happy Guy writes Laundry costs and how to save money – Put clothes to the smell test. If they smell like sweat, put them in the laundry. If they don’t smell like sweat, they are still good to wear. If a person is in the habit of tossing their PJs in the wash each morning, they could save close to $100 per year just by wearing them 3 nights. $100 per person. A family of five could save $500 a year.

Lazy Man @ Lazy Man and Money writes Committing to a Credit Card? Don’t Underestimate Annual Fees – OK, so are no annual fee credit cards always better to carry? Well, yes and no… It used to be that cards that required an annual fee offered more rewards, cash back and points than the competition that didn’t require these fees; American Express used to be the go-to example. Over the last several years however, the gap in quality between the two categories of cards has become less and less obvious.

Hank @ Money Q&A writes How To Use Prepaid Debit Cards To Budget For Big Purchases – Sometimes a trick can save you money on purchases. One of my favorite techniques is using prepaid debit cards to budget for big purchases!

Peter @ Bible Money Matters writes 5 Signs You Are Financially Ready to Retire – If you retire before your finances are in order, there is a good chance that you will outlive your money. Before you quit your job, make sure that you are truly ready to retire:

krantcents @ KrantCents writes Extreme Retirement Is Fool’s Gold! – The usual definition for extreme includes words like serious, hazardous, dangerous, highest degree, exceptional, severe, physical or mental risk or hardship. I realize that retirement as a goal may be worthwhile enough to take risks, but extreme may be too far.

LaTisha @ Young Finances writes How to Save Like The Terminator – Saving money doesn’t have to hurt your wallet. The key to saving money and saving lots of it, is to make your savings automatic.

Miss T. @ Prairie Eco Thrifter writes Why You Should Be Skeptical of Financial “Rules of Thumb” – Rules of thumb are often used to make various financial decisions. While they can be helpful when it comes finding a starting point, rules of thumb should be approached with a degree of skepticism.

Investor Junkie @ Investor Junkie writes Jemstep Review – Portfolio Manager Tool for Retail Investors – Jemstep is a web based service to help the do-it-yourself investor plan for retirement. With the recent move by many to dump their financial advisor, Jemstep targets a well needed niche. But the question is: Can Jemstep’s automated guidance replace a financial advisor?

SBB @ Simple Budget Blog writes The Good and Bad Sides of Coupons – Looking to save money? Maybe you’re big with coupons. We have some good news and bad news about coupons. Read here to learn about this common money saver.

Suba @ Broke Professionals writes Sold! How We Got An Offer On Our House In Less Than 2 Weeks – Our house spent six months on the market in 2012; here’s how we managed to sell it in 2013 in less than two weeks!

Nick @ A Young Pro writes The Biggest Financial Mistakes I’ve Made in My Career (So Far) – I’ve made a few mistakes in my career that have already cost me a lot of money. Read on to learn how you can avoid making them too.

Maria @ The Money Principle writes Shopping for Satisfaction – This week Alex discusses shopping for food. When one is unemployed they should shop smart not hard but could young people today do it?

DPF @ Digital Personal Finance writes Finding a Way to Get Things for Free – Being frugal can be rewarding, not only in terms of saving money, but also with the satisfaction of finding ways to get things for a bargain. Or, even better, for free!

Paul @ The Frugal Toad writes Why Pay for Cable When You Can Use Free and Cheap Streaming Video? – With cable bills averaging over $50 and Internet-TV combo packages costing over $100 you may be asking yourself is it time to ditch the cable. Before you make that decision you will need to make sure you have the right equipment and that your favorite programs are available. If you are a news junkie or a sports fan the options are limited however, if you want a good selection of TV Shows and movies you’ll want to look at these options.

Mr. Frenzy @ Frenzied Finances writes 10 Ways to Work Toward Financial Independence – Achieving financial independence relieves stress that people suffer in their lives. Looking to become financially independent? Here are 10 how-to tips.

TRL @ The Retired Landlord writes Who receives your property when you die? – When you die, your property is often one of the biggest pieces of estate that gets passed on. Of course, if you’re a landlord, you likely own more than one property; such as your own residence and those you let out.

Jester @ The Ultimate Juggle writes Organization is key to balancing family life with a career – It’s tough juggling family life with a career and sometimes the pressure of it all can make you feel unappreciated, even desperate. The frantic commute back and forward to work each day seems to take forever and the boss demands more and more of your time.

Grayson @ Debt RoundUp writes When I Would Rather Spend Than Save – Every since I started paying off my credit cards 4 years ago, I have leaned on the side of saving my money. I had wasted it away on credit card payments and I wanted to build my net worth. Each and every night, I would ask myself the simple question of “should I spend or should I save?”

CF @ The Outlier Model writes Got ovaries?? Work Less!! – A look at job expectations and why women shouldn’t be treated differently in the work force.

Mel @ Mel’s Money writes Save Cash And The Environment- Energy Saving Tips – Simple but effective ways to save some cash on energy bills.

Mark @ Modest Money writes Why the Rich Stay Rich, and the Poor Stay Poor – Why do so few people have real wealth? Certainly, there must be some fundamental differences between the rich and the poor that can account for the differing levels of success.

Sean @ One Smart Dollar writes Financial Rules Stay-At-Home Spouses Need to Know – If you are a stay-at-home parent you will want to make sure you are following a few basic rules.

John S @ Frugal Rules writes Online Brokerages I Use: OptionsHouse Review – There are many online brokerages to use as you look to invest in the stock market. The good ones are there to meet your needs and help make sure you’re doing what you can to be investing for things like retirement.

Mr.CBB @ Canadian Budget Binder writes Financially Savvy Teen Budgets Her Money Using The Cash Envelope System – At just 17 years old Eva is well on her way to becoming financially independent because she is investing in building her knowledge up about personal financial literacy. Teens today really do need a kick-start like Eva has gotten from her parents from a young age. Now she budgets her money using the envelope system. Enjoy this inspiring story as it brings upon you strength, a desire and a passion to see the children of tomorrow succeed.

Jon @ Novel Investor writes Anatomy Of Market Interest Rates – Interest rates play a big role in your finances. The factors used to set market interest rates affect what you earn on investments and pay on loans.

SB @ One Cent at a Time writes Helping you to Prevent Credit Card Fraud and Scams – Credit card scam is a pretty broad ranging term which encompasses theft as well as fraud which are committed through the use of a credit or any other payment mechanism. This article talks about few scam methods and how to prevent them before you become a victim

Abbie @ Finance Junkie writes Saving On Your Weekly Shopping Budget – Obvious ways to save money that we all tend to ignore when shopping!

Glen @ Monster Piggy Bank writes Do You Trust Your Partner With Money? – A post about trusting your partner with money and making financial decisions.

Thomas @ Finance Inspired writes The Benefits of Having a SIPP – I feel we already pay enough taxes these days, so here’s a way to cut out some unnecessary payments that can easily be avoided.

Will Van Hartog @ The Color of the Money writes Is there a Return on Investment in Call Centres? – Call Centres in some form have been in operation for decades, but how the consumer reacts to Call Centres is what really matters to decide if there is a return on investment in your call centre operation

Glen Craig @ Free From Broke writes Multi-Generational Living – Is a Next Generation Home for You? – Multi-generational living is becoming more popular these days as families look for ways to deal with the economy.

Glen @ Credit Card Smarts writes Blue Cash Preferred Card from American Express Review – Extra Cash Back and More – The Blue Cash Preferred Card from American Express offers up some nice cash back categories, just make sure your rewards make up for the annual fee.

Philip @ PT Money writes The Gerber Grow Up Plan: Sound Investment or Scheme for Suckers? – There are a few good reasons to have life insurance for your child. Read to decide if the Gerber Grow Up Plan is right for your family.

JC @ Passive-Income-Pursuit writes Stock Valuation Method – Dividend Discount Model – Continuing on with my series on stock valuation methods, I take a closer look at the Gordon Growth Model and Dividend Discount Model. Being a dividend growth investor, this is one of my favorite valuation techniques from a pure dividend value standpoint. There’s even free calculators you can use to run your own analyses.

Bob @ Christian Personal Finance writes Where is America Borrowing From? – The total United States government debt – also known as the national debt – currently stands at about $16.8 trillion, but don’t lock into that number – it’s growing by roughly another $100 billion each month. Where is the United States borrowing all this money from?

Michael Kitces @ Nerd’s Eye View writes Coverdell Education Savings Accounts Vs 529 Plans For College Savings – With the recent fiscal cliff legislation making Coverdell Education Savings Accounts permanent, more and more people must choose between them and 529 plans to determine which type of tax-preferenced college savings account makes sense, and plan their savings accordingly!

John @ All Things Finance writes Investing for Beginners | Newbie Mistakes to Watch Out For – Newbie investors are likely to make some mistakes when starting out. Here are five of the most common ones.

Marie at Family Money Values @ Family Money Values writes What is Leadership? – WHAT KINDS OF LEADERS DOES YOUR FAMILY NEED?

Irfan Ahamed @ Everything About Investment writes 5 Apps That Help You Manage Your Money – Most people are not accountants, financial advisers or qualified money managers. The normal person is not always equipped with the knowledge needed to maintain their personal finances. And with the economy in flux, responsible money management has never been more important. Luckily, there are several financial apps available to help you manage your money.

Todd @ Fearlessmen.com @ Fearless Men writes How Much To Spend On An Engagement Ring – There’s too many opinions on how much to spend on an engagement ring.I’ve heard that a gentleman should spend 2-4 months salary on an engagement ring.How true is that?

Marvin @ Brick By Brick Investing writes Waging War – Stock Direction – Sun Tzu’s Art of War principles on waging war compared to stock market trends in order to capitalize on bullish or bearish trends.

When is the Best Time for Couples to Combine Finances?

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Welcome to My Personal Finance Journey! If you are new here, please read the “About” or “First-Time Visitor” pages to find out more about us. If you would like to receive free updates on articles like this by email, then sign up here or you can subscribe to the RSS feed. Also, check us out on Twitter or Facebook. Thanks for visiting! Keep on learning!
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The following post is by MPFJ staff writer, Greg Johnson. Greg is a proud husband, father, and debt crusader who is in the process of becoming debt free. Along with his wife, Greg co-founded the personal finance blog, Club Thrifty, where they encourage readers to “Stop Spending. Start Living.”

The topic of love and money has been a hotly debated topic for years.

It seems like every blogger in the personal finance world has an opinion on it. For some reason, the topic triggers very vocal opinions from both bloggers and non-bloggers alike. Chase Card Services decided to stir the pot in January and came out with their “Chase Blueprint for Valentines Day Survey.” Among other things, the survey specifically asks if people should discuss finances on the first date and reports that only 21 percent of respondents said that they would help pay down their significant others debt – which I find kind of shocking. The results have set off a firestorm of response posts in the personal finance sphere and got me thinking about when couples should begin sharing their finances.

In the past, I’ve made no secret that I believe that married couples should be sharing their finances. I believe that talking about money and handling your money together is one of the keys to building a strong relationship. When couples decided to get married, they are agreeing to share their life together. They are no longer individuals, but a unit that acts as one – both emotionally and legally. They share their lives, children, and property, so it boggles my mind that couples would choose not to share their finances. In fact, from a strictly sanitized viewpoint, one of the biggest advantages to getting married is the ability to combine your incomes and accomplish things as a team that would be unreachable for each individual alone.

Money issues are the number one cause of divorce in North America. With the divorce rate in the United States near the 50% mark, it should be painfully clear that communication about handling money is a key element in the success of one’s marriage. One may argue that not sharing finances is a way to keep arguments about money to a minimum. I completely disagree. Sharing your finances forces couples to be on the same page when it comes to money. On the other hand, not talking about money is one way to breed resentment toward each other.

Look, I’m sure that there are marriages out there where the finances are kept separate and are working just fine. However, for the vast majority of couples, I think this is a way to get into some serious money and relationship troubles. By not sharing finances, you can avoid taking responsibility for your actions. You are not forced to hold yourself or your partner accountable for handling money in the proper way – which is where both money and relationship problems can begin.

Since the finances of each partner affect the family as a whole, I find it absolutely insane that married couples would not help their spouses pay off debt. Whether you do or whether you don’t, the money is all coming out of the family’s pot anyway. You’re just playing a shell game of shifting money from one place to the other, so why not just openly pay the debt off together – particularly if it is student loan debt? The income which that debt helps to generate is theoretically helping the entire family. Why shouldn’t the entire family help to pay it off? Be a team, help each other, and avoid the possibility of resentment from either side.

When Should Couples Combine Their Finances?

If we assume that sharing finances is the way to go, when is the best time to merge those finances together? Should couples begin sharing their finances before marriage? Should you help your future spouse pay off their debt before you take the plunge?

Honestly, I think there is quite a bit of gray area here. In an ideal world, nobody would have any debt and couples would not have to combine their finances until the day that they are married. However, I’m not sure that is realistic. While I wouldn’t advocate somebody paying off their significant other’s debt after dating for only a few months, if you have made a commitment to each other and are engaged to be married, you may want to think about starting to pay that debt off before you tie the knot. Once you marry a person, you marry their debt as well, so why not start helping them pay it off?

Of course, this would also depend upon the size of the debt your partner has accrued. You want to be very careful about giving others your money before you are married. Paying off $1,000 in credit card debt before the wedding is helpful. Paying off a $15,000 car may not be the best choice to make. Always remember that if you choose to help a significant other financially before you are married, essentially, you are giving them a gift. Should you break up, they probably are not going to be required to give you back the money. While helping them out is noble and may help you both in the long run, you could also lose a big chunk of money if anything happens to the relationship.

So, there you have it. What do you think about my take on couples and finances? Should married couples pay off each other’s debts? When do you think couples should combine their money? 

Let me know in the comments below!

***Photo courtesy of http://www.flickr.com/photos/allyrose18/179537772/sizes/z/in/photostream/

What Steps Are Required to Set Up a Charitable Organization / Non-Profit?

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Welcome to My Personal Finance Journey! If you are new here, please read the “About” or “First-Time Visitor” pages to find out more about us. If you would like to receive free updates on articles like this by email, then sign up here or you can subscribe to the RSS feed. Also, check us out on Twitter or Facebook. Thanks for visiting! Keep on learning!
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Click here to enter my free $50.53 giveaway for a chance to win 5% of My Personal Finance Journey blog income and give another 5% to a charity of your choosing! Deadline to enter is April 30th, 2013.

The following is a guest post. Enjoy! 

Can Your Organization Become A Charity?

The Business Of Charity

Charity Commission, Are You Necessary?

Choosing Your Trustees

How about you all? Have you ever set up or know any one that has gone through the steps of officially creating a non-profit/charity?

Was it harder or easier than you would expect?

Share your experiences by commenting below!

***Photo courtesy of http://upload.wikimedia.org/wikipedia/commons/f/f7/Contract_signing.jpg

Teach Your Kids about Money with Dave Ramsey’s Financial Peace University Junior

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Click here to enter my free $50.53 giveaway for a chance to win 5% of My Personal Finance Journey blog income and give another 5% to a charity of your choosing! Deadline to enter is April 30th, 2013.

About FPU Jr.

How Are the Lessons Delivered?

What Could Be Improved

Is This Kit Right for Your Kids?

How about you all? What techniques and/or tools have you used to teach your children about money? 

What are your thoughts in general about Dave Ramsey’s advice? Do you mostly agree or disagree with his messages? 

Share your experiences by commenting below!

***Photo courtesy of Amazon.com