Just Because You Can Spend More, Doesn’t Mean You Should

One of the things I heard a lot when my husband and I were shopping around for a new house a few years ago was this: You can borrow this much!

This much invariably turned out to be more than we were strictly comfortable spending.

One lender (specializing in no-doc loans for the self-employed) was even prepared to approve us for a mortgage loan with a payment that would have amounted to about 42% of our monthly income.  This was in the heady days just before the mortgage market crash and the financial crisis.

I wasn’t entirely sure I was ready to buy a home, but I knew I wasn’t comfortable with a payment that large.

Home buying isn’t the only time you need to be guarded in your spending decisions.  You might be told that you can “afford” a certain monthly car payment, or think that it’s easy to buy a brand new electronic device if you put it on a credit card and pay only the minimum payment.

Don’t Spend on Something Just Because You CanContinue Reading

Victim of Identity Theft? Here Are Your Next Steps to Protect Yourself

Credit card security

One of the fastest growing crimes in identity theft.

It’s the theft of information about you — information that can be used by fraudsters to pretend to be you and get access to a number of perks using your good name.

Whether your credit card number has been stolen, or whether someone is using your information to qualify for a car loan, it’s possible for someone else to pretend to be you.

Your stolen identity can impact you and your finances.

Obviously, if someone steals your credit card information and makes purchases, that can impact your abilities to use your own financial resources — at least until you take action.  If someone is using your card for purchases, you could be denied when you go to make purchases later.  And, if someone uses your information to open a loan, it shows up as your debt in your credit report.  If the fraudster isn’t making payments, it’s your credit that is sunk.

Once you realize that your identity has been stolen, it’s important to take action.

Here are the steps to follow as soon as you realize that your identity has been compromised: Continue Reading

Think of Marriage as a Business Arrangement?

marriage_certificate

Many people enter marriage blindly, underestimating how minor annoyances they experience while dating can grow exponentially during marriage. 

While couples may argue about a variety of issues ranging from in-laws to child rearing to household chores, research shows money fights can be the most toxic to a marriage.

Jeffrey Dew at Utah State University analyzed data collected from 2,800 couples and determined that those who fought about money weekly were “30% more likely to get divorced than couples who reported disagreeing about finances a few times a month.”  (The New York Times)

Many of us believe in the romantic ideal that love is enough to grow and sustain a loving marriage, but that is certainly not the case. 

While physical attraction is important, what is more important is your spouse’s ideals and convictions, and how closely they are in line with your own.  If you are a saver and you willingly enter marriage with a spender, be prepared for routine conflict, and perhaps divorce.

Jan Dahlin Geiger, a financial planner in Atlanta states, “‘Overspending is no different than being an alcoholic or drug addict’ in its effect on a relationship.  ‘What one person is doing could have a huge negative impact on the couple’s finances’” (USA Today).  Likewise, spenders may hide their purchases from you and incur debt you do not know about.

Of course, overspending is not the only financial problem couples might face. 
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How to Get Your Spouse More Involved in the Family Finances

In many marriages, there is the financial geek who enjoys setting the budget, paying the bills,  and managing the money. 

Often the other spouse wants no part of the finances.

While this is not always the case, it is true for many marriages.

This arrangement may work well for awhile, but over time, the spouse who handles the money may feel burdened by being the sole financial executor, especially if the family struggles with debt.

While the financial geek may never get his or her partner as excited about finances as he or she is, there are some ways to get your spouse involved more.

How You Can Get Your Spouse More Involved in the Family Finances

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In Honor of Financial Literacy Month: Back to Basics

April is National Financial Literacy Month, and that means it’s a great time to reflect on your finances, and think about what we can be doing to improve financial literacy for our children, and for others around us.

One of the best places to start when it comes to improving your finances is the basics.

It seems unnecessary to go back to basics; after all, many of us feel like we have the basics down pat.  However, no matter how advanced we think we are in the world of finances, it never hurts to have a refresher on the responsible use of money.

Here are some of the basics to get back to during financial literacy month:

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Contemplating Marriage? Love Is Not All You Need

Close up of young couple fighting

The Beatles famously sang, “All you need is love, love, love, love is all you need.”

So many of us buy into this simplistic belief and think that love conquers all.

Many of us rush into marriage and ignore the red flags that are before us, thinking problems will work themselves out after we are married.  The sad truth is that marriage often serves to amplify problems, not solve them.

Kathy Chu of USA Today puts it perfectly when she states,

“If love is the tie that binds couples together, money is often the wrench that pries them apart.”

Maybe in the past arguments about money in marriage could be blamed on societal pressures for people to marry early and for the expectation of the wife to quietly allow her husband to make the financial decisions, but those days are long gone in our society.

Now, women often make more than the men they marry.
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Do You or Your Spouse Handle the Finances Solely? Why This Might Not be a Good Idea

When a couple gets married, one of the first things that have to decide is who will pay the bills and make financial decisions.

Ideally, both people in the relationship would make joint decisions and have open discussions about their finances, but unfortunately, this seems to rarely happen.  Instead, they may talk out large purchases, but the day to day household spending, budgeting and bill paying seems to fall on one partner.

This is generally a bad idea for both parties.

What Can Go Wrong When One Spouse Handles the Finances Solely

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