Archive for the ‘Relationships and Money’ Category

Want to Be Rich? Choose Your Friends Wisely

By: Green Panda | Date posted: October 26, 2011 (5:00 am)

The Influence Our Friends Have On Our Spending

Taking an interest in personal finance is great, but if you’re looking to succeed you may want to look at your circle of friends. They can either help you succeed or sabotage your financial goals.

Don’t believe that friends can influence you? Researchers found that obesity can affect a social network, meaning a person is more likely to become obese if a friend was obese. We tend to share money traits with one another intentionally or not.

In fact when one friend is in another economic level than another (higher or lower) it can cause tension and awkwardness in the relationship.

Living the College Life Vs Living It Upfriends influence spending

My friends while I was in college generally tried to keep everything cheap. When we grabbed lunch we looked out for the best specials and shared them with each other. We were in the same boat – working college students trying to keep expenses as low as we can get away with.

Once I graduated though things seemed to have changed just a bit. Perhaps it was the years of frugal living, but many of us felt like we deserved a bit of a break. I noticed that in addition to eating out more frequently, I also ordered more expensive items.

It wasn’t a conscious decision, but we started to notice our food bills were climbing up. We some effort I realized that I had to change my habits and so did my buddies. We were no longer college students, but we still had a budget to keep.

Ideas for Money Saving Challenges to Do

Having circle of friends doesn’t always have to be negative. If your friends are such an influence, why don’t you just go ahead use it for good? Have you thought about having a competition among friends for one month on one specific financial goal?

To sweeten the pot you may include a financial prize. Yes, I’m suggesting adding more money to the mix. Say you have 5 friends who put $10 in to join the challenge to eat out less. Have dinners over at each others’ houses where the host prepares a meal for everyone. It doesn’t have to be fancy. At the end of the month you vote for the best dinner. The winner gets $50 as a prize and you all probably saved even more just by eating in.

You could also host a joint yard sale to raise money for your bank accounts. With several people spreading the word, you may get some good sales which not only add money to your pocket, but also gets clutter out of your place

Whatever the goal the point is that your friends can be powerful motivators, helping you reach your goal and vice versa.

So next time you’re hanging out with your buddies see if you can come up with a mutual financial goal that you all can work on. You may be surprised with the results.

Thoughts on Spending and Your Friends

How many of you notice that you ‘ve spent more when you’re around friends? How have you been able to counter it? How many of you are on the other side of the fence – your friends encourage you to spend less?

Photo Credit: anil bhatt

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What Are The Best Ways to Save For Major Purchases as a Married Couple?

By: Green Panda | Date posted: October 19, 2011 (5:00 am)

You’re young, married, and the two of you have a bit of extra cash leftover to spend on things you love. Perhaps the two of you are thinking of buying a home one day, or maybe you need to get a car to replace your clunker. It could be that you’ve moved into your first place together and want to furnish it. Whatever your goals you two have got to figure a way to handle your spending together.

If you’re fortunate you’ve picked up some money lessons from your parents. Did they show you how they made purchases together? If not, there are some tips to help the two of you make smart purchases for your next big ticket item.

Set Up a Goal for Your Big Purchase free sale

First thing for the two of you – deciding on goal to work towards. How much do you need to save up? You also have to determine when you’ll need it. For example, if you’re buying a house in the near future you’ll need to be extremely aggressive on how much money you set aside. Today’s financial climate has lender more stringent on what they’ll loan out. Having at least 20% down is becoming the smart move in order for you to take advantage of the best interest rates.

What if you’re looking at getting a new entertainment system in a year. For many, the monthly savings will be significantly less. The point is you two need to sit down and chat about what you want and when.

Save Automatically

Now that you have a monthly amount, increase your success rate by automating all your deposits.When you wait until the end of the month to set aside your money, more than likely there won’t be much left. Instead set deposits to happen shortly after you paychecks clear.

Deposit your money into a FDIC bank or CUNA credit union in your neighborhood that offer (relatively) high interest rates for savings and won’t nickel and dime you with fees.

Shopping Around to Maximize Savings

Taking the first deal you find isn’t usually the best move. Instead look at your options and see if you can get competitors to give better deals by playing them off each other.

When we were looking at buying our first place, my husband and I had an excel spreadsheet listing the properties we had seen and were interested in. We chatted with the building company representative and got a lower price by mentioning what others were offering.

If you’re shopping for appliances or electronics, here are a couple of things to keep in mind:

  • Price Match: When we were looking at getting a new washer and dryer, we looked at the home improvement and electronic stores. We also looked at their price match offers. If you can get a low price from a retailer and get it price matched at their competitor which offers better service and maintenance, go for it.
  • Price Alerts: If you can, sign up to get price alerts sent to you. sites like Slick Deals can see you email when items go on sale for a certain price.

My husband and I got a great deal with our washer and dryer by shopping around.

Do You Need Help with Money and Love?

Working together for big purchases can prepare you for other financial milestones like retirement, where you have to keep each other focused until you reach your goal.

I hope that helps and I hope that you take a minute or more to share your own stories. I’d love to hear your take on shopping and buying together. How do you two make big purchases? What system works and doesn’t work for you?

Are you still trying to balance love and money? Don’t forget to check out other posts in the series to assist as well:

 

Photo Credit: Lordcolus

Getting Married? How to Merge Your Finances

By: Green Panda | Date posted: October 12, 2011 (5:00 am)

Congratulations on the great news! You’re engaged and soon you’ll be getting married to the love of your life. Perhaps you’ll have a big celebration of your nuptials in front of all your friends and family, taking a long honeymoon together.

Once you’ve gone through your fantasy scenario, you may take a minute or two and start to wonder about how the day to day will work out financially. Will you two have to open joint bank accounts or will you keep your accounts separate?

Money Management as a Couplefinances and marriage

While you’d probably want to wait until after you tie the knot to merge your money, there are opportunities now for you two to test the waters.

Wedding Planning

Who knew that your big day is a great chance for you two to build your financial plan together? Before you go out and start spending money, take some time to answer some questions about what you want for the wedding and reception.

  • Do you want a big or small wedding? Please define what big and small mean. I’ve heard people describe 500 guests as a small wedding.
  • When do you want to get married? If you want to get married a couple months and you want a big wedding with the bells and whistles, you have your work cut out for you. Giving yourself more time can help you with paying for the wedding and for looking at ways to cut costs.
  • Where do you want to get married? Do you want to stay local or do you want a destination wedding? Will the wedding ceremony and reception be at the same location or two different spots?
  • Do you plan on going on a honeymoon right after? I’ve had family and friends take a small, local honeymoon right after the wedding and then take an out of country trip at a more economical time.
  • What do you imagine for the reception? You may want to skip it all together or you may want to a festival to celebrate.

After you’ve decide what’s important for your wedding, check out some ways you can cut costs on things that don’t matter as much. Having a frugal wedding doesn’t mean have a dirt cheap one, it’s about prioritizing where your spend your money. That’s a skill you’ll be using many times as a married couple.

My one piece of advice for the wedding is do not go into debt. As special and as sacred as that day is for you two, it’s just one day. Don’t let your wedding day be a financial burden to you for the first few months or years. Instead look back at the memories with joy and look ahead to future goals that you want to achieve together.

Wedding Gifts

Besides items from our wedding registry, my husband and I received money from friends and family as gifts. It was definitely appreciated. Years later along with some money we saved, the monetary wedding gifts were a down payment on our first place.

Opening a joint savings account can be the right route to go if you two need a place to keep your money stashed away. You can either use that money for your wedding, honeymoon, or a mutual goal. Discussing what you want to do also gives you an idea of how you want to save and/or invest your money.

Marriage and Money – Do We Need a Joint Account?

Now you may see joint budget and think every married couple should only have joint accounts, but you’d be wrong. For us, our main accounts are joint, but we still have individual accounts for incidentals like gifts and lunch. We can see the balance of each others accounts at any time if needed. In fact when I do our monthly net worth review we compile everything, including those accounts.

Proportional Budgeting: Our System

We’re currently using proportional budgeting to determine how much each of us puts into the joint accounts. My husband makes his deposits into the joint checking and my deposits go into the joint savings. The reason for this is because my husband has a 9-5 office job with a steady paycheck and my self-employed income is a bit more erratic. Using this method we’re able to pay our bills without stressing out and work on our joint goals.

If you two decide to keep separate accounts, that certainly your choice, but I really recommend at least having one joint savings account. It’s a good way for your to learn to work together and communicate about finances.

Do You Need Help with Money and Love?

Are you still trying to find out how to make this work? I recommend you read Get Financially Naked to give you two some ideas on how to address the tricky situation of merging your finances.

Don’t forget to check out other posts in the series to assist as well:

I hope that helps and I hope that you take a minute or more to share your own stories on how you had prepared for your wedding and afterwards or how you’re preparing now.

Photo Credit: epSos.de

What Do You Do When Money Starts to Ruin a Relationship?

By: Green Panda | Date posted: October 05, 2011 (5:00 am)

Your Money or Your Life – Which is It?

Love and money can go hand in hand, but sometimes money can cause friction in your relationship.Depending on your money problems, there are some relatively easy to solve while others are extremely difficult.

Addiction to Credit Cards

Having high interest debt can be a big problem especially if one or both of you are impulse spenders.love beads

If you can’t keep your credit card spending in check, consider getting a plasectomy and physically remove the cards from your wallet. Some bloggers have literally put their cards on ice – freezing their credit cards

No Budget Skills

If you two can’t seem to stay on a budget, it can quickly deteriorate into a blame game. Without a plan for your money, it typically disappears without doing anything significant.

Fixing it is as simple as automating your money. Set up bill pay with your bank or credit union to take care of all your important bills. You also want to set aside an automatic transfer into savings. You two don’t have to create a strict budget, you let the deposits and withdrawals handle everything. Less stress, less mess.

Financial Infidelity

This is the most serious money problem if you have a joint budget system. You start hiding money from each other. Perhaps it started off small, such as a small bonus received in your pay check. It could be major, such a huge credit card debt that the other person doesn’t know about. Or maybe one of you regularly lends money to friends and relatives and it hasn’t been paid back. Perhaps one of you has  to borrow money from a relative to keep up appearances.

There is no easy fix for this problem. This is more than a financial dilemma – it’s a deeper issue involving trust, fear, and  a whole can of worms. Besides a financial planner, you may need to get counseling for your relationship to get to the root of the problem.

Your Options with Money Problems and Relationships

We all have make choices when it comes to love and money. While couples are different, your options for what to do basically comes down to these:

  • Choose the relationship; ignore the money. Sadly some people may feel that their relationship is so important that they don’t want to rock the boat and don’t work on the money problems. Usually the money problem increase and it spills over to other areas in the relationship.
  • Choose the relationship; work on the money issues. When it’s worth it, the two of you will stick it out and create a plan together.It may be hard to work it out with different money styles, but many couples find it brings them closer as they have to communicate regularly.
  • Decide it’s best to move on. Unfortunately it doesn’t always work out the way we want. Perhaps the problem is deeper than finances. Maybe you tried to work on the relationship, but you two are not really going anywhere.

What’s best for you? I can’t answer – you have to be honest with yourselves on what is the best option.Don’t rush into making a decision, especially if you two have history.

I hope that you can work out any money problem that comes you way as a team. It can become a strength rather than a weakness.

Do You Need Help with Money and Love?

Are you juggling relationship with money? Don’t forget to check out other posts in the series:

I hope that helps and I hope that you take a minute or more to share your own stories on how you got on the same financial page in the comments below.

Photo Credit: Aunt Owwee

When You Two Don’t See Eye to Eye on Money

By: Green Panda | Date posted: September 28, 2011 (5:00 am)

Whenever I can catch a snippet of the Dave Ramsey radio show, I’m always excited to hear the couples call in to Dave to announce their debt free. Some of these families have gotten out of a huge amount of debt. Many of them cite the encouragement that they received from each other as their motivation. I find it sweet and inspiring.

However, that’s not always the case with couples. I’ve heard occasionally someone call in and ask Dave for help with their spouse. One of them is motivated to be done with debt while the other isn’t completely on board. They’re looking for Dave to magically fix their problem. He’s honest with and gives a tidbit or two of things they can try out.

I made me wonder how many other couples are going through the same situation. What about couples who have different financial goals? Can they work it out or are they doomed? I believe it is possible to strengthen your relationship with each other and money. It takes work and it takes time to figure out a system that will work for the two.

Money & Relationships: Not Mutually Exclusive

Family therapist M. Gary Neuman had a great stregy for couples:

Attack the problem, not each other.

What that means is that both of you need to work as a team not as competitors. As individuals, both of you bring your own strengths and weaknesses. I have a few tips on talking about your financial goals that I’ve shared before:

  • Pick the right time to have the talk. Choose a time that both of you can give your undivided attention.
  • If your spouse brings up a concern, let them open up. Don’t interrupt and don;t judge. Sometimes it’s best to listen so you know what approach can work for both of you.
  • Try framing it as a ‘we’ issue. It is easier to handle a situation when you’re both on the same page.
  • Celebrate the victories. When you achieved a goal, no matter how small, celebrate.

That’s what has worked for us; hopefully it can serve as a starting point for you as create a communication style all your own.

 

Two Heads Are Better Than One

If you remember last week I mentioned a few financial goals that you two should consider together. These financial decisions not only affect your wallet, but your lives.  They include:

  • Housing: Where you live is something both of you should agree on. Buying vs renting isn’t as clear cut as some people believe.  Some urban areas have a high cost of living and couples find renting to be a more practical option.
  • Kids: Having or not having children is probably the biggest decision you two will make. Don’t have kids just because it’s expected from others. It’s a lifetime commitment that requires both of you to communicate openly and work constructively with each other for the good of your child(ren). If you decide to have kids, discussing how many you want with one another can clear up any mis-communications and bad assumptions you may have.
  • Retirement: Don’t spend your golden years together scraping by. Sit down and chat witch each other on what you’d like to do during retirement. Get a ballpark figure of how much that lifestyle will cost and work from there. Double check with one another to see if you’re taking advantage of 401(k) matches if they are available.

While it would be great for you two to be on the same page for all of your goals it’s not realistic. You have to accept the fact that you two will have certain financials goals that will differ from each other.

Do You Need Help with Money and Love?

Are you juggling relationship with money? Don’t forget to check out other posts in the series:

I hope that helps and I hope that you take a minute or more to share your own stories on how you got on the same financial page in the comments below.

When Should You Have the Money Talk as a Couple?

By: Green Panda | Date posted: September 21, 2011 (5:00 am)

You’re with someone special and you feel like this is for the long haul. However, you’re curious about your and their finances. You don’t want to spring your $20,000 student loan on them after you’re married and you certainly don’t want to find out later they have tens of thousand of dollars of credit card debt. On the other hand you don’t want to jump the gun and unload all your financial mistakes and meltdowns on the first date.

How do you go about doing the money talk? Are there some things you should know about each other? When’s the best time to bring up money? I want to share some thoughts on the topic to hopefully ease you into that important discussion.

Relationships and Money Issues

First off, ‘the money talk’ is done more than just once. It’s a conversation that changes and adapts as you two grow in your relationship. Each stage opens up more topics and can lead to even more intimate conversations.

Engagement -Outline Your Mutual Goals

If you’re engaged and you two haven’t spoken about finances, by all means get started now. Before you take the plunge, have a heart to heart to get some answers, such as:
  • Will you rent or buy?
  • How will you pay the bills? Will you pay proportionally or a set amount each month?
  • How much debt do each of you have(exact numbers)?
  • What’s your plan to get out of debt?

Don’t worry if your answers change, just be open and honest with each other.

Marriage & Kids – Have a Practical Plan

Now that you’re married you may think you can coast, but you’d be wrong. As you two merge your lives, your finances will be intertwined whether you planned to or not. To stay on the same page, set a little bit of time to sit down to discuss  your goals furher. Try to create an actionable that both of you can agree with.

  • Buying a House (or Renting): Some couples  really want to own real estate and others don’t. The two of you should sit down and run the numbers to see if it’s financially practical. In some parts of the country, like major metropolitan areas, around the country it may make sense to rent. Before getting a mortgage, make sure you’ve significantly reduced or eliminated your debts. It can help you qualify for a lower interest rate, saving you tens of thousands of dollars in interest over the life of the loan.
  • Owning a Car: If you live in a city with a wonderful mass transit area, getting a car may be an impractical use of your money. You can redirect the money saved by not have car payments, gas, and insurance towards savings or reducing your debt. If you have to have cars, don’t automatically get a car loan. Try to save and buy a car with cash.
  • Retirement Planning: Even if retirement is decades away, try to start setting aside some money for it.
  • Having Kids: Do you both want kids? If so, how many do you want to have? Will one of you be a stay at home parent or will you both continue to work? Do you plan on public or private school for them? Do you want to home-school?

The big issue most people stress over is whether or not you two want kids. How do you know that you’re financially ready for kids? It would be nice to review the following with each other:

  • Savings: First, I’d include a baby fund or increased savings in your emergency fund to cover baby expenses.
  • Budget: Can you keep your expenses under control or do you have a habit of impulse spending? Work out a plan to automate your necessary bills and savings if that’s what it takes to stay on track.
  • Work: Check with your jobs to see what benefits and leave they offer for parents.

If you need to write it all down, then by all means do so. It’ll be a wonderful way to clarify certain points should you two have questions latter.

Of course unexpected surprises happen in relationships all the time. The best way to keep your love and finances in tact is by constructively communicating regularly with one another.

Do You Need Help with Money and Love?

Are you juggling relationship with money? Don’t forget to check out other posts in the series:

Photo Credit: zenera

Love and Money: How Do Financial Differences Affect a Relationship?

By: Green Panda | Date posted: September 14, 2011 (5:00 am)

Can you balance love and money? I think so. Is it easy? Not always, especially if you two have different financial habits. However it is possible to get on the same page. You have to be willing to be willing to be honest and open to adapting to one another.

Let me show you what helped us and if you have any tips or stories, please share them in the comments.

Do You Need Help with Money?

The first step is having a open and honest conversation about money with each other. money and relationships

  • What are your financial goals and philosophies?
  • How will you handle bank accounts? Will you have joint or separate accounts?
  • How are the expenses to be divided?

Though you may not like the answers; it’s better that you know upfront what you’re getting instead of finding out later. You should also have a plan to review the budget regularly; after all, things change.

Relationships and Money – Making It Work

What happens when the two of you decide to get married? How can you make the transition as smooth as possible?

When we were engaged my husband and I talked about our finances – sharing all of our assets and our debts. I also resolved to pay off my credit card debt. We started to plan the wedding and worked to keep it affordable. We also created a basic financial game plan.

Why should you two come up with a financial game plan together? Besides to getting to know each other better, creating a game plan also helps you to develop a way to communicate about money constructively. It’s not about blame or on upping each other, it’s about finding a way to bring your different perspectives and strengths to help both of you to succeed.

  • Make debt reduction your mutual goal (if applicable). If you two have any debts, you should come clean on them.
  • Build an emergency fund. Things happen, so be prepared and have some money deposited in savings.
  • Keep your monthly expenses under control. Keep your housing affordable. If you can, have a goal to have your essential expenses covered under one income. Use second income to pay down debt, save more, or invest for your retirement accounts.

You’ll most likely have other goals besides the ones above. Each couple is different, so your list may include travel, starting a business, or donating to charity.

Thoughts on Love and Money

Are you juggling relationship with money? Don’t forget to check out my post, Would You Date a Cheap Person? and share your take on the topic.

Photo Credit: giumaiolini

Would You Date a Cheap Person?

By: Green Panda | Date posted: September 07, 2011 (5:00 am)

I will start off by saying I have went out with a cheap person once and that was enough for me. Besides being a tightwad, he was arrogant, so that ended it before it began.

However, I have dated some frugal guys and enjoyed picking up new tips. In fact, my husband is a frugal guy, but our dates were interesting and time flew by.

My husband and I met when we were in college. Dating while in college meant we had to be creative with our budget.

Do You Have Money Problems or Relationship Problems? frugal dates in college

Odd question, but I found that sometimes you have to take a step back and figure out what exactly is your problem with the other person. Your date could be embarrassingly cheap and you just know it won’t work out in the long term. Do they complain out loud how expensive the food is? Do they give the waiter or waitress a cheap tip (or no tip) even though they got great service?

Or could it be that you’re not used to living a frugal lifestyle and are a bit uncomfortable with it?  For me having a guy cook at home is a plus – he’s frugal and he has a useful talent. However, only having ramen at his home for our meals together is a bit too cheap for me.

Everyone has their own definition of frugality versus cheapness. You have to be honest with yourself if you find a potential date cheap or just frugal.

Love, Money, and More?

It is possible to date a frugal person and have some fun. For us, we knew that living like broke college students was a temporary move. Once we started our professional careers we’d have a bit more money to work with.

It turned out to be a benefit for when we decided to get married.We also knew from our dates that we didn’t need a ton of money to have fun. That meant we could go a few more pricey trips, but still stay within a budget as a couple.

You too can benefit from dating a frugal person. As your income increases, you can still keep your creatively frugal habits and save the money for some of your financial goals.

Thoughts on Love and Money

Have you ever dated a cheap person? What annoyed you the most about them? Have you ever dated a frugal person? What was the most interesting frugal habit they had?

Photo Credit:  tibchris

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