Category Archives: Personal Finance

Are You a Budgeting Phony?

Are You a Budgeting Phony? | Money Savvy Living

Are you a budgeting phony?  A hypocrite when it comes to finances?

Hypocrisy is not a word that you would typically associate with budgeting, is it?  However, when you stop and think about what that actually means, it probably applies to someone you know.

So let’s start out by talking about what a hypocrite is: A hypocrite is one who “acts a false part, or assumes a character other than the real.”

You may be starting to figure out what I mean by a budgeting hypocrite…  There are three types of budgeting phonies: the “dead-broke” budgeter, the “YOLO” budgeter, and the “live-for-the-moment” budgeter.

 

The Dead-Broke Budgeter

This type of person is always complaining about how they have no money.  This type of budgeter may even ask to borrow money frequently and then have trouble coming up with the money to pay you back.  Yet, ironically, they somehow can afford expensive or luxury (non-necessity) items.  Do you know someone who never has enough money to pay bills, get diapers for the baby, or buy gifts for holidays, but has plenty of money for vacations, eating out frequently, and smartphones or other expensive gadgets?  While this type of budgeter says they don’t have enough money, the fact is, they probably would have enough money to pay for the necessities if they budgeted for needs first, and wants second

 

The YOLO Budgeter

This type of person spends money like it grows on trees—well, because, You Only Live Once, right?!  They seemingly have an endless supply of money to buy any and every thing they want.  While things may look fine from the outside, this type of budgeter may be building a house of cards that will come crashing down at some point.  This can easily happen because this type of budgeter overextends their finances by taking out interest only loans (never paying back principle… until that loan must one day be refinanced to pay principle and interest) and/or maxing out credit cards.  Charging it up on credit cards can be fun—until the bill arrives.  The budgeter that lives beyond their means will eventually face a day of reckoning.

 

The Live-for-the-Moment Budgeter

This type of budget is kind of tricky to spot—this may even be you and you don’t even know it yet!  This type of budgeter isn’t always telling you how broke they are, yet seemingly makes unwise budgeting choices; nor do they wildly spend money as though they have an endless supply.  This type of budgeter pays their bills and makes good money decisions—mostly.  The only problem for this type of budgeter is that they have not factored in saving for retirement.  With all of the things that can come along in life, it can be hard to set aside money for retirement—which can be 20, 30, or 40 years away—especially when it feels like you need that money now, just to get by…  However, getting in the habit of saving, even if it is only $20 a month to start with, will start a very beneficial budget routine for you and your family.

So what do you need to do?

If you fit into one of these categories, you need to make budgeting changes NOW.

Yesterday would actually be better.

But, we can’t change how you handled finances in the past; however, we can make positive changes moving forward to get your finances under control and set you up for a path toward a comfortable retirement.

  • Create a budget. This is the first step to getting your finances into order.  Know where you are and then set the path forward.  This is going to involve talking to your spouse or significant other about money—a potentially very sensitive subject.  Before starting this discussion, you may want to read When Not to Talk to Your Spouse About Finances so you can make that conversation as productive as possible.  You can also download my free, printable budget to help you organized:

Mone Savvy Living Budget printable

  • Treat retirement savings as a necessary expense. Why an expense?  Because then you are factoring it into your budget every month as money going out of your bank account.  In this case, it is not going to pay a bill, it is going into a retirement savings account—401k, Regular IRA, or Roth IRA.  My article, Retirement Planning: Are You a Saver or Spender? goes over why you may be leaving free money on the table if you aren’t currently investing into a retirement account—especially an employer sponsored retirement account.
  • Prioritize your spending. For all three of these types of budgeting phonies, mismanagement of finances is the root cause of the problem.  Creating a budget will quickly show you the items that are necessary to pay first, and then using the money that you have left over after paying all your necessary expenses (which is called disposable income), to buy the things that you want, but don’t necessarily need.

Save Money by Choosing Green Options

The following is a guest post from Bryn Huntpalmer, editor-in-chief at Modernize.com.

 

Save Money by Going Green | Money Savvy Living

 

Taking care of Mother Earth is certainly important. At Modernize, we’ve found that green practices tend to save money, which motivates us even more to live eco-conscious lifestyles. Here are a few simple changes that will reduce waste and help save you some green.

 

Upgrade Paper Products

It’s tempting to order pizza and serve it on paper plates or napkins, but convenience comes at a price. Paper, plastic, and Styrofoam products are typically produced with nonrenewable resources, which can be incredibly detrimental to the environment.

 

Stop this waste by using your actual dishes as much as possible. We suggest finding colorful plates you’ll be excited to use and keep clean. You won’t have to spend money on buying paper or plastic goods when you run out, which will save you money in the long run.

 

Paper towels are another household go-to, however, switching to cloth napkins or reusable paper towels can save you some major bucks. Just think about how much money you could save by purchasing paper towels less frequently. You may think you’ll be overwhelmed with laundry, but these cloth napkins and towels are small enough to throw into nearly every load.

 

Save Money by Going Green | Money Savvy Living

Grow Your Own Garden

Let’s face it: spices, herbs, and produce are expensive. If you love that organic, fresh taste (who doesn’t?), then cut costs on delicious seasonings and fresh vegetables by growing them yourself. You can recycle tea tins, canisters, mason jars, and more to create planters. Set them up in your kitchen near natural light, or start your own backyard garden.

 

With options to grow everything from basil to oregano, berries, green beans, and more, you can save a ton of money on natural, healthy foods. Planting your own garden is great for the environment, too.

 

Save Money by Going Green | Money Savvy Living

Commute Smarter

If you have a great group of friends at work, school, or church, it’s a smart idea to start a carpool. When you split the cost of gas, oil changes, and tolls, you can save a lot of money on your commuting costs. Carpooling even has advantages like being able to use the HOV lane, or sometimes enjoying reserved parking spots up front.

 

Vehicle exhaust is a huge pollutant and damages the ozone every day. Reducing the amount of vehicles on the road means cutting back on pollution, too. So, if you can walk or ride your bike instead of jumping in the driver’s seat, choose this energy-saving option to save money and help the environment.

 

These are a few ideas to get you started, but you’ll have opportunities to make eco-friendly decisions every day. If you’re getting rid of old furniture, ask yourself if it could be upcycled. Consider donating unwanted items to charity or thrift stores to grab a tax deduction instead of throwing them away. Decisions like that may seem small, but they will save you money over time—and protect the environment, too!

 

Bryn Huntpalmer

Bryn Huntpalmer lives in Austin, Texas where she currently works as editor-in-chief of Modernize.com with the goal of empowering homeowners with the expert guidance and educational tools they need to take on big home projects with confidence.

 

#Brexit and the Economy: Effect on the US Job Market

Brexit and the Economy: Effect on US Job Market | Money Savvy Living

 

Little over a week ago, Britain voted to leave the European Union.  The British Exit, or Brexit, as it has come to be known, is already having an impact on Britain’s economy and the effects are being felt around the world.  Of course, we watched as the stock market reacted to the news with a big sell-off and a flight to security here in the US, but one of the less-obvious, immediate ramifications that is evident on the UK side, is in the British job market—and the search for jobs outside the UK.  In fact, just since the Brexit vote, UK job search into the US has increased as much as 170%.

 

Indeed.com has collected the following information on UK-based job search to other countries by volume after Brexit (sources: SilkRoad & iCIMS):

  1. US – 29.4% of outbound search
  2. Canada – 12.7%
  3. Ireland – 9.1%
  4. Australia – 6.2%
  5. United Arab Emirates – 6.1%
  6. France – 5%
  7. Brexit and the Economy: Effect on US Job Market | Money Savvy Living

 

To go a bit deeper into this developing trend, I was able to interview Tara Sinclair, chief economist at Indeed.com, to get some insight from an industry expert:

 

Q: You are quoted as saying: “But the Brexit vote, at least in the short term, caused the share of UK job search into the US to increase as much as 170%, a potential trend as more UK and EU citizens look for opportunities elsewhere.”  What do you think is the driving force behind this short-term trend? 

A: What we’re hearing from job seekers is that after the Brexit referendum they developed increasing concerns about the opportunities in the UK labor market.  The concerns are both in terms of job opportunities going forward for foreign citizens as well as the health of the UK economy overall and how that may impact future jobs. 

 

Q: What factors specifically contribute to UK and EU citizens looking in the US?

A: The US, even before the Brexit vote, was the top destination for UK residents outside the UK and is also highly desirable globally.  The health of the US labor market with lots of job openings today along with competitive salaries makes the US a perennial favorite for people searching for international job moves.

 

Q: What impact do you anticipate this having on the US job market—which is already fragile—i.e., fewer jobs and lower labor participation rate for US citizens?

A: Given the strict restrictions on work visas in the US, this will likely have little consequence in terms of the number of international workers who come into the US labor market, but with increased competition for those visas we may see US companies benefiting from higher quality international talent.

 

Q: Not getting into the politics of it, but how do you anticipate the presidential election in November affecting this trend?  Which policies of Trump/Clinton would impact this the most?

A: We’re carefully watching the jobs data in the US as we head up to the election, but we haven’t seen any big movements so far.  One lesson from the Brexit vote is that we may not see an impact until after the election, but that job seekers do respond to changes in opportunity.

 

Q: You are also quoted as saying: “Separately, an exodus of EU citizens from the UK may provide an opportunity for US job seekers to find roles there.”  What potential opportunities would this open up for US workers in Britain?

A: If the negotiations over Brexit result in more restrictions for EU citizens wishing to work in the UK, this could put US citizens interested in working in the UK on a more level playing field with EU workers and may allow more US citizens the opportunity to work in Britain.

 

So what does it all mean?

We saw stocks plummet after the announcement of the #Brexit vote and a flight to gold and other “safe” investments, but then quickly rebound.  While UK workers may feel uncertain as to what the direction of their economy will be without being part of the EU, the spike in job search numbers may be somewhat of a knee-jerk reaction.

 

*Indeed.com, the #1 job site in the world, allows jobseekers to search millions of jobs on the web or mobile in over 60 countries and 28 languages. More than 180 million people each month search for jobs, post resumes, and research companies on Indeed.  More people find jobs on Indeed than anywhere else. Indeed is the #1 source of external hires for thousands of companies.

Retirement Planning: Are You a Saver or Spender?

Retirement Planning: Are You a Saver or Spender? | Money Savvy Living

It is hard to turn on the news and not hear about the sluggish state of the economy, the low amount of job growth, how much debt the country is racking up… or how seemingly inevitable cuts will be coming to social security benefits in the future because of these factors…  So when we hear these things, we need to take a moment and actually look ahead to what those long-term effects could mean for your personal financial future.

While it may seem nonsensical to think that the May jobs report has anything to do with your personal retirement planning, or even your current financial situation, it truly is an indicator of our country’s economic heartbeat and the overall economic impact is actually quite far reaching. When job creation is low, and the job participation rate is low, there are less people paying taxes into the system, and potentially, more people collecting benefits such as unemployment and food stamps. When we are in an economy that is not bringing in more revenue than is going out, we have a budget deficit each year—and that adds to the interest compounding on our current national debt to create an even larger debt. So it starts to become clear as to why this affects you personally: less money going into the Social Security fund now will mean less to come out of it later—when you are ready to retire.

With all of this in mind, it may surprise you to know that 33% of Americans have no retirement savings at all, and less than 25% of the people who do have retirement savings actually think that it will be enough. Do you have enough? How do you know if you are on the right track?

This graphic from Rosland Capital, a premier precious metals asset and gold IRA firm, breaks it down for you:

 

 

Rosland Capital Avenue to Retire | Money Savvy Living

 

 

So the first thing that you need to do is find out if your employer offers a 401k program, and if they do, start contributing as soon as you qualify. Why is this so important? There are 2 main benefits from participating in your employer’s sponsored 401k:

  • Employer matching—most employers will match up to a certain percentage of your personal employee contributions. It is literally free money. For example, if you contribute 2% of your income from each paycheck, your employer may match that, so your total is now 4%.
  • Tax benefits—if you contribute to a traditional 401k, you will get money taken out of your paycheck pre-tax—so that means you are paying less tax now on your current income. If you are contributing to a 401k that has a Roth option, then you will pay tax on the money that you contribute now, but it will grow tax-free!

If you are self-employed or your employer doesn’t offer a 401k, then you can always set up your own IRA, or individual retirement account, and receive the similar tax benefits—you can get a tax deduction for contributing to a traditional IRA, or again, enjoy the tax-free growth of a Roth IRA.

So how do you choose which investment products are right for you? There are several factors to look at: how long you have until retirement, what your goals are, and what you risk tolerance is. Every individual’s situation is unique, so you will need to look at these factors with your financial advisor to determine the best investments. Once you know your time horizon, what your investment goals are, and the type of investor that you are, you may even want to check out these 3 ways to creatively diversify your investment portfolio to further decrease your risk.

 

Are you a saver or a spender?

With all of the uncertainty in the economy, and even with social security, you want to make sure that you are preparing yourself for retirement—so that you can live comfortably in your golden years without having to worry if the government will cut your social security benefit.

So if you are one of those 33% that have no retirement savings, here are a few ways that you can start saving today—without having to drastically change your lifestyle:

  • Take advantage of your company’s 401k matching—it’s literally free money going into your retirement that you don’t have access to now anyways. Example: you put in 1% of your paycheck (you probably won’t miss just 1%!) and your employer puts in 1%, so you are now saving 2% from each pay…
  • Pay yourself when you get paid. When payday comes, determine an amount that you want to set aside in a saving (retirement) account. Even if you can only start with $5 per pay, that is fine. Get into the habit of saving and then maybe gradually increase it each time you get a pay raise. If your goal is to save $100 per pay, then map out a plan to get there.
  • Give something up. This is hard to hear sometimes because we get into habits or become accustomed to doing things a certain way and don’t want to give anything up. However, if you can sacrifice eating out for lunch one day per week, or give up getting a latte before work, or cancel a membership that you maybe don’t use anymore…all of those are items that you are paying out money for each month, but could live without. So rearranging your budget and putting that money toward savings and retirement will be way more meaningful. Besides, you can pack a lunch and bring coffee from home if you know that sets you up for a better future, right?!
  • Don’t spend your tax return! If you get money back when you do your taxes each year, don’t spend it. This is money that you haven’t had access to all year long, when you get the check in the mail, simply deposit it in your retirement account.

Technology Has Made It Easier Than Ever For Millennials To Find Their Dream Home

 Technology has Made Buying a Home Easier for Millennials | Money Savvy Living

 

The advent of technology is predominantly responsible for the current shape of the real estate landscape, or at least how it operates.  That said, I am convinced that those who are fully committed to adopting the latest technological trends are in the best position to capitalize on opportunities that arise in the real estate industry.

 

There isn’t a generation more prepared to harness the power of technological advancements than millennials.  Having been exposed to more technology at a younger age, it is only natural that younger homebuyers are more inclined to lean on it in their respective home searches than older generations.

 

Let’s take a closer look at how technology has shaped the way millennials research, shop and close on their first homes:

 

It has never been easier to research a respective property than it is today, and one thing in particular has more to do with making research accessible to everyone than everything else combined: the Internet.  Not surprisingly, online platforms and real estate valuation tools have left millennials more informed in their own home searches than the generations that have come before them.  With just a few clicks of a mouse and a little ingenuity, it is entirely possible for prospective homebuyers to compile a list of viable homes that meet their criteria.

 

According to the National Association of Realtor’s latest Profile of Home Buyers and Sellers, 94 percent of millennials used online portals in their home search last year.  Today, those home searches have transcended desktop searches, and now take place on mobile devices.  In fact, more than half of younger buyers preferred to search for their first home on a mobile phone or tablet.  Of those surveyed by the NAR, 31 percent of millennials and 26 percent of Gen Xers ended up purchasing the home they found on their mobile device.

 

Of particular importance, however, is the difference in volume and time spent searching for a home between those that used the Internet and those that didn’t.  According data released by the NAR, buyers who used the Internet last year spent twice as long searching for a home and saw twice as many houses than those that neglected to use online tools.

 

If for nothing else, new technology within the real estate sector has awarded millennials the opportunity to make more informed decisions.  All the information they need on a property is just one click away.  Moreover, they no longer have to settle for the houses brought to them by a single real estate agent.  They essentially have a much wider pool of properties to choose from, and can therefore be more selective in their search process.

 

First-time buyers will have a better chance finding a home they can afford today than they have in the past.  With access to the MLS, online valuation tools, and even mobile applications, millennials have every reason to shop within their means.

 

Speaking of a wider pool, more refined search results will also benefit those in search of a loan.  Outside of finding the right home, the Internet has made the mortgage process itself more accessible to those who may not understand it entirely.  It’s much more likely that millennials will turn to the Internet to help them find the right mortgage for their current situation.

 

No longer are first-time homebuyers expected to walk into a bank and accept the lending terms of the closest traditional institution.  Not unlike their home search, they can shop around for the mortgage that best suits their needs.

 

First-time homebuyers have the added benefit of being able to reference pages like the Consumer Financial Protection Bureau, which exists specifically to help those who may have questions about the home buying process.  Subsequently, the U.S. Department of Housing and Urban Development offers first-time homebuyers a step-by-step blueprint and even determines how much home they can afford.

 

Armed with a better knowledge of how mortgages work, millennials are less likely to take on monthly premiums they can’t afford, which, I am sure I don’t need to remind you, contributed to the Great Recession nearly a decade ago.

 

Above all else, new technology within the real estate sector has awarded first-time homebuyers the opportunity to make more informed decisions.  There may have never been another generation more prepared to actively participate in the housing sector than millennials, which bodes well for real estate and the economy as a whole.

 

I want to make it abundantly clear; just because millennials are more inclined to use technology in the search for their first home, it doesn’t mean real estate agents will be relegated to the wayside.  In fact, real estate agents are more relevant than ever.  According to the NAR’s Profile of Home Buyers and Sellers, 87 percent of buyers in 2015 purchased their home through a real estate agent or broker, and millennials are no exception.  While today’s first-time homebuyers may not need an agent to begin their search, there is a good chance they will need help interpreting the information they are presented with; someone to confirm what they read online.

 

Consequently, technology has also changed the way first-time homebuyers interact with real estate agents.  Instead of your typical phone call, it isn’t uncommon for most conversations to take place via text or email.  First-time homebuyers, for that matter, tend to place a priority on those agents who can answer their questions fast and reliably.

As millennials quietly start to represent the largest pool of buyers in America, their preferences will start to shape the way real estate business is done.  Those who become early adopters of the technology they use should be able to capitalize on what has already been deemed the easiest time to find the home of your dreams.

 

*This guest post was contributed by Than Merrill, CEO of FortuneBuilders, former NFL player, author, and businessman.

Than MerrillBio: Than Merrill, CEO of FortuneBuilders, is one of the most successful real estate investors in the nation. As a graduate of Yale University and a former NFL player, Than attributes his success in sports, business, and investing to coaching and education. Than exhibited his real estate prowess as he starred on A&E’s Flip This House, is a highly sought after speaker, and bestselling Amazon author of “The Real Estate Wholesaling Bible.”  Merrill is also active in philanthropic efforts and started a non-profit charity, with his wife Cindy, called Equal Footing Foundation. In addition to his own charity, Merrill spearheaded the creation of FortuneBuilders Gives; the company’s philanthropic initiative to provide opportunities for employees and students to give back to their communities.

Connect will Than on social media:  Website \\  Twitter  \\  Google+  \\ LinkedIn

Millennials and Money: My Interview with Rachel Fox

Millennials and Money: My Interview with Rachel Fox | Money Savvy Living

 

Millennials.  We hear so much about the millennial generation: they are graduating college with huge amounts of debt; there are not enough jobs for this group of people who are now entering the workforce; they are giving up automobiles and taking the bus or riding a bike; millennials are living at home with their parents longer; millennials aren’t interested in finance.

 

These are things that we hear, but not all of these are necessarily true.

 

As part of a push to highlight the importance of financial literacy, I recently had the opportunity to interview Rachel Fox, a teen actress, turned financial expert, and founder of ‘Fox on Stocks.’  She wants to raise awareness about a concern of her generation:  lack of financial literacy.  But Rachel is quick to point out that the lack of financial knowledge of her generation is NOT due to a lack of interest.  When asked about why she feels there is a gap when it comes to knowledge about finance within her generation, she explained, “There is not enough information being published where the millennials are looking—on Facebook and social media.”

 

So, Fox is teaming up with H&R Block to help teens learn about personal finance, awarding monetary prizes and scholarships to top students and schools.  In my interview with Rachel, she talked about how H&R Block is reaching a younger generation with the H&R Block Budget Challenge, which is a finance simulator.

H&R block

Actress Rachel Fox Teams Up with H&R Block to Teach Teens About Finance

 

Millennials want to learn about money and how to properly manage it.  Here’s the advice that Rachel had for her generation in regards to getting smarter about money:

 

“Learn how to establish credit.”

Credit—learn how to establish credit and the importance of your credit score

 

“Set up auto-alerts”

Pay off debt—set up auto-alerts from credit cards or other accounts that you want to monitor so that you don’t spend too much and get a surprise when the monthly statement comes.

 

“Live within your means”

Fox stresses the importance of saving more money now in order to pay your future self and paying off any debt that you have.

 

“Learn how to grow your money”

Investing.  So important for retirement planning, and even growing savings.

 

To listen to the entire interview that I had with Rachel, click here.

 

 

 

Rachel FoxBio: Rachel Fox is a teen actress turned financial expert, and founder of ‘Fox on Stocks.’ You may remember her from her role as Kayla Scavo on Desperate Housewives, but she has also had roles on other hit shows, such as That’s So Raven, Hannah Montana, and the Series Finale of Alias. She wants to raise awareness about a concern of her generation:  lack of financial literacy. Rachel has become a go-to on the topic of financial literacy and money for teens – she was named one of TIME Magazine’s “25 Most Influential Teens”, a Seventeen magazine “Power Teen” for 2016 and has even done a Ted Talk and is the go-to source for financial management tips for teens.

You can find more information on her finance tips at: Facebook //  Twitter  //  Google+

 

Best Money Advice to Get You on the Road to Financial Freedom

Best Money Advice: Road to Financial Freedom | Money Savvy Living

 

April is Financial Literacy Month, so to highlight the importance of personal financial knowledge, I have gone to the experts for their best money advice.  Financial literacy doesn’t have to be confusing or complicated.  Anyone is capable of getting a handle on their financial situation—with the right tools and information.

To start out with, here is my recommendation:

Understand the Time Value of Money

Save.  Start saving early… the earlier the better.

Whenever you receive money, whether it be your salary, a commission, bonus, or gift, save a portion of it.  If you can start saving in your twenties, you will be much further ahead by the time you reach retirement than the person who started saving in their thirties… or forties.

This is called the time value of money.  What it means is that the longer you have money saved away, the more time it will be able to earn interest.  Each year that your money is earning interest, the account if growing and new interest is then earned on the new higher principle balance.  This compounding effect is the reason that the person who starts a retirement account in their twenties will end up with a much bigger nest egg than the person who starts saving for retirement in their forties.

 

The Importance of Saving Now

Rachel Fox, teen actress turned financial expert, and creator of Fox on Stocks, has some good advice for millennials: “Save more money now to pay your future self.”

 

Live Within (or Below) Your Means

Rich Goodall, of Cash Savvy Tips, says “When it comes to budgeting, the trick is to aim BELOW your means, not just within it. That way there will always be money left by the end of the month and will soon turn into savings.”

 

Find Your Financial Balance

Heather Shue, of Simply Save, a blog dedicated to saving money and simplifying life, advises on retirement:  “A long life with retirement is not a guarantee. Personal finance is all about finding a balance between planning for the future and enjoying the present.”

 

Invest in Quality

Hannah McKnight Rinaldi, frugal living blogger and author of Eat, Drink, and Save Money reminds us to spend money wisely, “Don’t get caught up with spending money on trends. Invest in good quality items that you love that will last a long time.”

 

Create a Plan to Get Debt-Free

Jamie Jeffers, of Medium Sized Family, talks about how to reach financial freedom: “If you’re in debt, it’s time to make a serious plan to pay it off. The longer you wait, the more it will hold you back. Get mad, make a plan, and attack it! There’s freedom waiting on the other side.”

 

The Power of Payments Early and Often

Erin Elizabeth Beaupre, the Stay at Home Yogi, addresses the importance of getting out of debt and cutting down the effects of compounding interest, particularly regarding student loans (although this is good advice for ANY loan):  “If you have student loans – pay them EARLY and OFTEN. Don’t wait to start paying them down “just because” – the sooner you start, the sooner you will be out of debt! Throw extra money at them any chance you get. It all adds up!”

 

Diversify Your Income

Travis Scott, financial expert and creator of Stuff Parents Like, explains the importance of multiple income streams.  “We all hear you should diversify you investments, but I think the most important thing to diversify is your income. There is a reason the average millionaire has seven sources of income. Today it is easier to diversify your income than any other time in history.”

 

 

If you are just getting started, the first thing you need to do is put together your personal budget.  This will give you an idea of what money you have coming in and what you are spending it on as it goes out.

  • Create a budget—look at monthly income and expenses for your household. Figure out how much disposable income you have (the money that is left over after paying all your bills each month). This is the starting point, because you must know where you are if you are going to figure out how you will reach your financial goals. Click on the image below, or on this link, to download your FREE Money Savvy Living Family Budget:
Mone Savvy Living Budget printable

When NOT to Talk to Your Spouse About Finances

how NOT to talk to spouse about finances

 

Your relationship with your spouse is multi-faceted.  Before you got married, you probably talked about the “important” things, such as, where you would live, how many kids you would want to have, jobs, even religion, but you may not have talked about budgeting and spending habits.  And once you got married, I’m willing to bet that, you soon realized that money and spending habits were “important” issues that you should have talked about.

 

Why is it that we find it easier to talk about and work out compromise on major life decisions, such as children and religion within a marriage, but avoid talking about money?  According to CreditRepair.com, 60% of couples say that “spending was kept a secret to avoid problems at home.”  Ironically, 60% of couples also say that they think that “spending infidelity is just as destructive as sexual infidelity” within their relationship.  So if couples identify finances as such a major factor in their relationship, why do they go to great lengths to avoid talking about it with their spouse?

 

finances and marriage | Infographic from CreditRepair.com

 

Alright, we all know that talking about money with your spouse is not easy, but, obviously, it is essential to building a healthy relationship.  And if you and your spouse have been having trouble communicating about money, you are probably able to find quite a few resources on how to effectively talk with your spouse about money, but sometimes, it is just as important to know what NOT to do…. so, since it is such a sensitive topic, let’s first start off by looking at when you should NOT talk about money:

 

DO NOT talk about money when you are angry.

If you find out that your spouse has just made a purchase that you didn’t know about or possibly didn’t even agree should be made, let those initial emotions subside.  If you confront your spouse when you are angry, the conversation probably won’t get very far and is almost certain to end in a fight—and the issue won’t get resolved.

 

DO NOT talk about money when you are preoccupied.

This may sound obvious, but you both need to be 100% in on the conversation.  If you try to talk to your spouse about a purchase or budgeting when they are trying to work, or they are running out the door to pick your child up from basketball practice, or when they are tired and trying to fall asleep, you are not going to have a productive conversation.

 

DO NOT confront your spouse about money or spending habits in front of others.

If you want to shut down any communication about finances, confronting your spouse in front of family, friends, co-workers, or even complete strangers, and possibly embarrassing him or her, will not help your situation.  If your spouse perceives what you are saying as ridicule or public embarrassment, that would be counterproductive.  Finances are a private issue, so keep them between you and your spouse.  That is not to say that you can’t reach out to a marriage counselor or financial planner to help you get to where you need to be.  Sometimes you do need an outside opinion, but the manner in which that happens makes all the difference.

 

DO NOT talk about finances in front of your children.

If you have children in the household, disagreeing about finances in front of your kids, talking about all the debt that you have, or how you are unable to pay your monthly bills, will not create a good sense of home life for your children.  Allow your children to be children.  They don’t need to worry about how to pay down a credit card or how to pay down student loans.  Also keep in mind, that what they overhear, may not be perceived the right way—you and your spouse may just be having a disagreement or a discussion about how to tackle debt, but your child may think that you don’t have enough money to pay for your home.  Children are perceptive and will pick up on your attitude toward finances and money—don’t teach them that money is a problem, or a headache, or overwhelming.  Show them a positive outlook.

 

Okay, so there are definitely times that you should not talk about money or finance problems with your spouse, but obviously, this is an important topic, so when is a good time to talk through your budgeting issues?

 

DO set aside time to talk finances.

If you are aware that finances are a touchy subject for the two of you, and you know not to bring up it when you are angry or preoccupied, decide on a time that you both agree to and focus only on finances.  Setting time aside allows both of you to think about things ahead of time, and hopefully, when you come together, the conversation can be productive and free from distraction.

 

DO communicate with each other in a loving manner. 

Marriage counselor, Brian Linder, says “The more you focus on communicating love to your spouse the better you will negotiate finances.” You and your spouse need to work together as a team, and if one of you is blaming the other, or if neither of you are willing to take ownership, then your marriage will suffer.  Remember, when you are talking to your spouse work on ways to solve the problem, not just point out what they are doing wrong.  Regardless of how things were handled in the past, you need to agree on a financial path moving forward.

 

DO create a plan.

Regardless of how you each spent money before you got married, or the bad spending habits that you may still have, or even the debt that you must deal with, come up with a plan to get on track.  You can’t change the past, so focus on the future, where you are going, and how you will get there.  Here is a check list to use when you talk with your spouse about money.  Go over each topic and make the decisions together:

  • Create a budget—look at monthly income and expenses for your household.  Figure out how much disposable income you have (the money that is left over after paying all your bills each month).  This is the starting point, because you must know where you are if you are going to figure out how you will reach your financial goals.  Click on the image below, or on this link, to download your FREE Money Savvy Living Family Budget:
Mone Savvy Living Budget printable
  • Set a purchase limit—if you or your spouse is going to make a purchase (or a series of small purchases) that add up to a certain dollar amount, then you should talk it over with your spouse first.  Set the limit to an amount that you both agree on, maybe it’s $100, maybe it’s $1000, but set it, and stick to it.  That way, there won’t be any surprises…and that also alleviates the desire to “hide” a purchase from your spouse.  Remember, honesty in communicating is important to the health of your finances and marriage.
  • Create a pay-down plan—if you have accumulated debt together or brought debt into your marriage, decide on how to pay it down—and off.  The stress of large amounts of debt can be overwhelming, but creating a plan to get it paid off can lessen the financial stress, as well as the stress it may be putting on your relationship.  So, after you have made your budget and know how much disposable cash you have, you can decide together which debt amount you will tackle first.  For example, if you have $100 of disposable cash each month, perhaps, you put that extra money toward paying off a student loan or a credit card.  Once that debt is paid off, you can put that $100 towards paying off another debt.  Actually, you will have more disposable income with each debt that you pay off because you are taking the minimum payment out of the budget, so for example, maybe you now have $150 to put toward paying off the next debt.

Once you have put a plan in place, stick to it.  But remember, things will come up—the car may break down and need to be repaired, you may encounter unexpected medical expenses, perhaps you will need to replace the water heater or refrigerator—so be flexible.  Talk about how you will pay for these extra expenses and then work to get back on track with your plan.

Communicate with your spouse about finances—but not in a negative way.

10 Steps to Make College Affordable and Graduate Debt-free

10 Steps to Make College Affordable (and even Graduate Debt-Free) | Money Savvy Living

 

Did you know that there are ways to go to college for free, or at least drastically reduce the amount that you would have to pay?  We hear so much about getting “free” college from politicians.  I put the term “free” in quotation marks, because we all know that it isn’t truly free.  There are costs associated with paying professors, maintaining a campus, etc… and someone must pay for it.  I won’t get into the politics of the policy here, but just remember, there is no such thing as a free lunch.

There is a real concern though, because so many college graduates are getting their degrees and have accumulated tens-of-thousands of dollars of debt, if not hundreds-of-thousands, and aren’t able to find good-paying jobs after graduation in order to pay back those loans.  So how can you get a college education without taking on the burden of debt?  Sounds impossible?  It’s not.  The good news is, you don’t have to wait around for the promise of a “free” education in order to be able to afford to go to college.

Here are 10 steps that you can take today to put yourself on the path to an affordable college education (and maybe even graduate debt-free):

 

Fill out the FAFSA

Anyone who is thinking of going to college needs to fill out the FAFSA form, or Free Application for Federal Student Aid.  The reason this application is so important is that it will determine your eligibility for federal grants and loans.  Remember, you don’t have to accept all of the aid that you qualify for, this just determines qualification.

 

Visit the guidance office at your high school

If you are a high school junior or senior, the school guidance counselor should be your new best friend.  The staff in the guidance office is well-equipped to help you when it comes to applying to colleges, applying for scholarships, and even helping you assess your strengths and potential career paths.  Ask them about new scholarships to apply for.  Even though you can apply for many scholarships online or through a college directly, there may be local businesses or foundations that offer scholarships through the school.

 

Search on scholarship websites

Make sure you utilize the internet for more than just social media.  There are several websites which you can search for scholarships that you may qualify for, here a just a few to get you started:

http://www.collegescholarships.org/

https://www.scholarships.com/

http://www.fastweb.com/

 

Compare academic and athletic scholarships among colleges

Getting good grades and/or being a skilled athlete can also get you extra money for college… anywhere from a few thousand dollars to a full ride.  While the scholarships awarded in these areas will differ from college to college, it can make a huge impact on your overall financial responsibility.  Before deciding on which school to go to, take a look at the overall costs and overall scholarships that are being offered, you may find that you can save thousands of dollars by choosing one school over the other.

 

Compare private vs. public schools

According to Collegedata.com: “In its most recent survey of college pricing, the College Board reports that a “moderate” college budget for an in-state public college for the 2015–2016 academic year averaged $24,061. A moderate budget at a private college averaged $47,831.  Of those total amounts, the average cost of tuition and fees for the 2015–2016 school year was $32,405 at private colleges, $9,410 for state residents at public colleges.

I don’t think you need much explanation here, public is going to be more affordable than private.  In fact, in total cost, you can save nearly 50% by going to a public, in-state college.

 

Commute to college

While the idea of living at home and commuting to college may not allow the freedom or independence that you were hoping for, it can help with your financial freedom in the long run… by making college even more affordable and saving on the cost of room and board.  According to Collegedata.com, the College Board reports that the average cost of room and board in 2015–2016 ranged from $10,138 at four-year public schools to $11,516 at private schools.  While these numbers do not differ that much between public and private, it can save you at least $40,000 over a four-year education to live at home and commute to class.

 

Work part-time

Just because you are a full-time student doesn’t mean that you cannot set aside a few hours a week to make some extra money.  Of course, there may be times throughout the year that you won’t be able to work due to athletics or other activities that you are involved in while at college, but even working one night a week can help.  Getting extra work during the summer or even while on spring break or between semesters, you can probably make enough money to pay for smaller costs associated with college, such as books, lab fees, transportation, etc.  Paying for the smaller things as you go helps to cut down on the overall loans that you need overall.  Who knows, you may even be able to save up some money during this time…

 

Know the difference between a loan, a grant, and a scholarship

So what is the difference between a loan, a grant, and a scholarship?  Very simply, a loan is something that you will be required to pay backGrants and scholarships are money that you do not need to pay back.

This is why filling out the FAFSA is so important, there are certain government loans, grants and scholarships that you will automatically know if you qualify for, based on your FAFSA.  It also determines that amount you and your family are responsible for.  This form is what the colleges that you are considering will look at as well.

 

Don’t take out the max loan amount

Just because you have filled out the FAFSA and qualify for a student loan does not mean that you are obligated to take it.  Remember, a loan is money that you will be required to pay back.  You cannot just look at it as free money for the next four years, you must look at it as a financial obligation.  Even though there will be no interest until after you graduate, if there is a way to defer your college expenses otherwise, taking out a loan should be your absolute last option.

 

Serve your country

Serving your country by joining the Armed Forces is also a way to obtain money for a college education.  The GI Bill, originally signed into law by Franklin D. Roosevelt in 1944 (and has since expanded), provides for college education benefits for those who choose to serve.

 

3 Reasons to Drop Authorized Users from Your Credit Card

 Reasons to Drop Authorized Credit Card Users | Money Savvy Living

What may have seemed like a good idea at the time that you allowed your loved one or friend to consolidate on your good credit and make purchases using your credit card, may end up not being the best decision ever.  Sometimes those authorized users begin to take advantage.

 

Sometimes dropping authorized users from your credit card completely makes sense. For many, it’s more of an emotional and painful decision rather than a financial one. Still, sometimes managing multiple cardholders becomes more like a nightmare and taking a few off is reasonable.

 

Here are three signs, perhaps, it’s time to drop an authorized user on your card:

 

They frequently max out: Suppose you’ve added your teenaged kids as authorized users, but they constantly overspend. This would undoubtedly put a strain on your household budget and hurt your credit utilization ratio. Such a spending behavior would hit you and your kids’ credit scores and push you towards credit card debt trouble.

 

Before taking action, talk to them and ask them to keep the expenses as low as possible. You can also set limits for different users if your creditor allows this. If overspending continues to be a problem, it may be time to drop your kids off your account.

 

You are parting ways: After a relationship break-up, most people forget to remove their ex as an authorized user on their credit card accounts. If you make this mistake, you’ll be liable for any debt he or she accrues using the card, and any activity of the card will still affect both of your creditworthiness.

 

So it’s better to take your ex off your accounts once you part ways. Also, ask your ex to do the same. Don’t forget to change your account passwords as well. Alternatively, close any and all joint accounts so neither of you will have to deal with any future repercussions.

 

They are financially self-reliant: It’s a great way to help teach your kids fiscal responsibility and a way to monitor their spending before they obtain their own credit; however, it’s meaningless to keep them on your accounts forever. It’s better to remove them from your account once they become financially independent and acquire two or three years of positive credit history under their belts.

 

 

*This is a guest post from Andy Masaki

Author Bio: Andy Masaki is an editor with Oak View Law Group and contributes specifically on personal finance topics. You may find his writings at Comparecards, Realmoneyanswers, Familyshare.

 

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