Money & Marriage – Matt About Money Simple. Meaningful. Success. Wed, 29 May 2019 15:52:00 +0000 en-US hourly 1 9092505 Profitable Ideas: How Your Phone Impacts Your Spending, Too Much Stuff, and More Fri, 07 Jun 2019 13:30:53 +0000

Weekly roundup of some of the best personal finance articles from around the web.

You spend 41% more at the supermarket if you keep checking your phone (MarketWatch). Distracted shopping costs more.

200 random things libraries will let you check out for free—from instant pots to skulls (Money). When was the last time you checked to see what your library offers?

Giving—or receiving—a down payment gift? Here are the tax consequences ( Some good rules to know, especially for first-time buyers. 

15 states with a ‘marriage penalty’ in their tax brackets (Kiplinger). There are lots of financial (and, of course, other) benefits to being married. But marriage can also cost more.

3 ways your office 401(k) gives you more money than you realize (Business Insider). A lot of people still long for the days of traditional pensions, but if you have access to a 401(k) plan, that’s probably a really good deal.

There is too much stuff (The Atlantic). It’s a first-world problem, to be sure, but “choice anxiety” is a thing. And it’s given rise to Instagram influencers, brand disrupters, and retail curators.

Here’s how much a US dollar is worth in every state (USA Today). The long-term benefits of living in a low cost-of-living state cannot be overstated.

Why spending less doesn’t reduce your quality of living (The Simple Dollar). It’s all about what you choose to spend less on and why.

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Profitable Ideas: The Wants/Happiness Disconnect, Marketing Endgame, and More Fri, 03 May 2019 13:30:32 +0000

Weekly roundup of some of the best personal finance articles from around the web.

What we want doesn’t always make us happy (Bloomberg). Are you pursuing things, and spending money on things, that won’t make you happy?

Here’s how much more money you’d have for retirement if you saved $100 a month starting at age 25 instead of 35 (Business Insider). Time is “the simplest and most reliable tool we have for building wealth.”

The root cause of your money problems could be an actual money disorder (HuffPost). Many people have destructive financial beliefs and behaviors, but at a certain point those beliefs and behaviors cross a line.

Cash is king (Humble Dollar). In “the house of the wise” is an emergency fund (Proverbs 21:20).

Give to charity without giving up your tax deduction using a donor advised fund (Peter Lazaroff). The new tax code has complicated charitable giving. Here’s a workaround.

Keeping money secrets from each other: Financial infidelity on the rise (NPR). I’m a big believer in complete financial disclosure before marriage and ongoing financial transparency after marriage.

Audi, Google, Hertz, and the Avengers: Endgame brand tie-in marketing machine (Fast Company). How much marketing did you notice in the latest Avengers movie?

4 things you should never buy refurbished (and 4 things you should) ( Sometimes used products are a good deal, but not always.

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A Money and Marriage Mistake to Avoid Tue, 09 Apr 2019 13:30:29 +0000

Throughout their marriage, John and Jessica had maintained separate credit cards and apparently didn’t talk about how they were each using their cards. After 12 years of marriage, Jessica was shocked to discover that John had racked up $68,000 of credit card debt.

Instead of asking for forgiveness, John asked Jessica to co-sign for a loan that would roll together their first and second mortgages, their car and truck loans, and his credit card debt.

While their names have been changed, it’s a true story described in an advice column in which Jessica asked whether she should sign for the loan.

While this couple’s story is dramatic, the underlying issues are all too common. Many couples live separate financial lives. This can be seen in the results of national surveys finding that 44 percent of married people say it’s okay to keep financial secrets from their spouse, 22 percent say they don’t tell anyone how much money they make including their own spouse, and over 60 percent say they don’t know when their own spouse plans to retire.

What we have here is not just a failure to communicate, but also a failure to commit to financial oneness. Married couples are best served by doing the money thing together, and one of the best ways to ensure financial oneness is to use a household budget that gives each spouse anytime/anywhere access to their household’s complete financial picture.

There are three equally important parts to a budget. The first part is a plan developed together for how household income will be given, saved, invested, and spent—preferably in that order.  The second part is a process for tracking how all household income is actually given, saved, invested, and spent. And the third part is an ongoing conversation about what adjustments need to be made in order to make household cash flow run effectively.

If the couple highlighted in the advice column had been taking those steps, they could have kept their separate credit cards while knowing the truth of what was happening with their finances.

What advice would I give the couple?

  • Don’t take out the loan. That will only deal with the symptoms of the problem instead of getting at the cause.
  • Stop using credit cards. They should both do this since the article indicated that the woman also has a propensity to charge up her card.  As I have written before, I believe credit cards can be used responsibly. But in this case, because of the couple’s age (he’s 59, she’s 62) and amount of debt, they need to be done with credit cards for life.
  • Find a great marriage counselor and begin the process of restoring their marriage.
  • Seek budget assistance of a trained counselor from Compass—Finances God’s Way or Crown, or contact the National Foundation for Credit Counseling and begin a debt management program.
  • Create a budget that provides complete financial transparency and helps eliminate all unnecessary spending.
  • Sell any unused assets to free up money for debt repayment.
  • Seek ways to maximize income for accelerated debt repayment.

It isn’t over for this couple. With the right attitudes and the right help, this difficult experience could be the catalyst for a forever-improved marriage. But it’s going to take some time.

What other advice would you give this couple?

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Profitable Ideas: Investing Missteps, Shore Up Your ID Theft Protection, and More Fri, 05 Apr 2019 14:12:55 +0000

Weekly roundup of some of the best personal finance articles from around the web.

Investors doubled their stock market losses in 2018 by making this costly mistake. Here’s how to avoid it (Money). The dangers of letting your emotions get the best of you. Here’s a better approach.

I decided to pay off my mortgage by age 40, and I’m convinced it’s one of the best things I’ve ever done (Business Insider). Some people say it’s foolish to pay off a mortgage early if you have a low interest rate, but sometimes the best financial decisions require more than a spreadsheet.

Money matters (The Humble Dollar). Why money is such a poor way to gauge value.

Fights over estates can tear families apart (Independence Advisors). How you can make things go smoother for your heirs.

The problems with do-it-yourself online wills (Next Avenue). The cost savings may look appealing, but you may end up paying a higher price in the end.

How to work through financial conflicts in your marriage (Bible Money Matters). Good guidance for the financial disagreements many couples face.

Identity theft: Act now to protect yourself (Kiplinger). The problem is only getting worse. Here’s how to shore up your defense.

Using the bank your college recommended? Check for fees (CNBC). Students need to be careful. The bank recommended by their college may not be best.

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Profitable Ideas: Happy People Earn More, the Boring Path to Success, and More Fri, 15 Mar 2019 13:30:24 +0000

Weekly roundup of some of the best personal finance articles from around the web.

Why happy people earn more money (Entrepreneur). You may think greater wealth leads to happiness, but maybe it’s the other way around.

Exploring the growing trend of taking a gap year before college (Christianity Today). The benefits of waiting another year before starting college.

Just save more money (The Irrelevant Investor). It’s one of the most important factors for investing success and it’s well within your control.

Why is it so hard for couples to talk about money — and their debt? (Buzz Feed). Especially when you try to work out the whole money thing within the context of a relationship, it becomes so much more than an objective means of exchange.

Compounding boredom is simple, but not easy (A Teachable Moment). Success goes to those who take the right steps, day in and day out.

Average Americans can’t afford to buy green (Bloomberg). It isn’t easy, or inexpensive, bein’ green.

Seriously, stop throwing away your old clothes (Fast Company). Far better to swap, sell, or stitch your old duds.

It isn’t the kids. It’s the cost of raising them (The Atlantic). The joy of parenting — it’s complicated.

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Profitable Ideas: The Science Behind Your Money Habits, A Money Mistake Many Couples Make, and More Fri, 08 Mar 2019 14:30:42 +0000

Every week, I look through lots of personal finance articles. Here are some of the best.

What science reveals about your money habits (Magnify Money). There’s more going on behind the scenes of your financial decisions than you realize.

The easiest retirement choice (Of Dollars and Data). Boiling retirement savings down to one especially important decision.

We have to fix fashion if we want to survive the climate crisis (Fast Company). This article is mostly directed at companies, but of course we have an important role to play. It’s about buying fewer, better pieces of clothing.

You’re the ‘money person’ in your relationship? That’s problematic (NY Times). It’s natural for one person to take the lead, but too much leadership can be a mistake.

Follow the leader is a child’s game — not a retirement strategy (A Teachable Moment). Social proof proves harmful.

Just a little bit more (The Irrelevant Investor). The fallacy that happiness is just one more purchase away.

The stigma of choosing trade school over college (The Atlantic). College isn’t for everyone, and other paths can work out just fine.

Credit freezes aren’t foolproof (Kiplinger). Just because you put your credit on ice doesn’t mean you can let your guard down.

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Profitable Ideas: Breaking the Fast Fashion Habit, Making the Most of Your 401(k), and More Fri, 01 Mar 2019 14:30:56 +0000

7 ways to break the fast fashion habit — and save the planet (World Economic Forum). It isn’t good for your wallet or the environment.

Americans could save $700 million by checking one thing before buying a home (MarketWatch). You probably looked at lots of homes before choosing one to buy. You should shop around for a mortgage, too.

Here’s what to do if you can’t pay taxes by April 15 (CNBC). Even if you can’t pay the full amount, you have to file your return.

Workism is making Americans miserable (The Atlantic). Are you looking to your work for more than it can deliver?

Money and marriage: Four tips for successful ‘matrimoney’ (The Simple Dollar). So much of it comes down to communication.

Password managers have a security flaw. But you should still use one. (Washington Post). How carefully are you managing your passwords?

This common 401(k) oversight could cost you big time in retirement (Money). You may have been automatically enrolled, but you still need to take some action.

Most millennial homeowners have buyer’s remorse, a new survey shows (CNBC). A lot of it comes down to a failure to anticipate all the maintenance and repair expenses.

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Everybody Has a Story Tue, 12 Feb 2019 14:30:51 +0000

During what would turn out to be my father’s final year of life, he had several caregivers in and out of his house. Since I worked within about a 45 minute drive of where he lived, one day I decided to take a long lunch and pay a surprise visit to check up on the care he was receiving.

As I walked in the front door, I could hear “Fran” helping my dad in the bathroom and was surprised to hear her speaking to him with impatience and disrespect. Immediately filled with anger, I took a couple of steps in their direction. But for some reason I stopped, sat down in the family room, and waited. 

A few minutes later, Fran appeared and, of course, was surprised to see me. I didn’t scold her or threaten to have her fired. Instead, I told her there were some things I wanted her to know about my dad. 

As we sat together, I told her he had grown up without a father, that his dad had died when my dad was just five. I told her my dad enlisted in the army during World War II and flew 35 missions as navigator of a B-17 bomber. I told her about the letters he wrote to his mom, telling her about his “boring desk job.” With his two brothers in the army at the same time, he wanted to ease her worries. I told her that when my mom died, less than a year earlier, they had been married for 47 years. And I told her how selflessly my dad had served my mom throughout her ordeal with cancer.

I also told her I could only imagine how difficult her job must be, having to do tasks few others would want to do. I thanked her for her work and asked her to take good care of my dad. From that point forward she did just that.

While those details may not have anything to do with money, understanding someone’s story has a lot to do with getting along financially (and otherwise) with the people around us. 

What’s your story?

How much have you thought about your story and how it impacts your relationship with money? If you’re married, how much have you talked about your spouse’s story and how that impacts his or her dealings with money?

If you have some recurring disagreements about money, it might be that your personal history—or your spouse’s—has something to do with them. And a frustrated comment, such as, “You’re just like your mother,” probably won’t do a whole lot to help the situation. 

Far better to try to understand how each others’ upbringing and early experiences with money continue to influence your assumptions and choices. To try to look at all of that objectively, see if those assumptions are really true, and think about whether the choices you’re making are for the best.

Understanding how your past may be impacting your present could be the first step in a new and better direction.

‘We can’t afford it’

I’ve written before about Sheila, who grew up as one of five kids with a stay-at-home mom and a school teacher dad. Because money was usually tight, she carried extreme frugality into adulthood, only allowing herself to choose the least expensive version of whatever she needed to buy.

When she and Mike got married, the budget he was accustomed to using helped her see that her standard response to pretty much any spending opportunity—“we can’t afford it”—was based on an unwarranted fear that they really couldn’t afford it. Seeing on paper that, yes, in fact, they could afford it—whether a restaurant meal or a better brand of clothing—was a completely new experience. It gave her a sense of freedom around money she had never known before.

Mr. Stable meets his match

Five months into their dating relationship, Julie mentioned to Sam she was carrying a $1,200 balance on a credit card. Sam was stunned. To him, that was nothing short of irresponsible. Scrambling for something to say, he only made matters worse by offering to lend Julie enough money to pay off her balance. Julie felt judged.

As difficult as that conversation was, it spurred other conversations that helped them learn more about the source of each other’s financial habits and attitudes. Sam came from a stable, middle-class family. They lived within their means, always bought used cars, and always paid cash.

Julie’s family was “somewhat more colorful.” Her parents divorced when she was five. Although her mom could stretch a dollar farther than most, money was always tight.

A few days after the credit-card conversation, Julie told Sam of a time when she had to help her mom make her mortgage payment. Sam felt much more compassion. By the same token, as Julie learned more about Sam’s upbringing, she understood why he hated debt. She quickly paid off what she owed.

Today, Julie credits getting at the root of their financial beliefs and behaviors for the ease with which they now talk about money.

The gift of understanding

If you’re looking for a last-minute Valentine’s Day gift, how about this? How about giving your spouse a little grace on the money front? How about making a concerted effort to better understand their financial story, looking at it with fresh eyes? How about mentioning some aspect of their story that you see contributing to your relationship in really positive ways. And as for those not so positive ways, how about praying instead of complaining and giving thanks for all that is good?

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How’s Your Financial Health? Tue, 06 Nov 2018 14:30:46 +0000

There’s a new report out that says very few Americans are financially healthy. Working with researchers at the University of Southern California, the Center for Financial Services Innovation (CFSI) developed an eight-question survey that was taken by a representative sample of U.S. adults, leading to what it calls the U.S. Financial Health Pulse. Its results were not encouraging.

According to CFSI’s analysis, just 28% of Americans are “financially healthy,” 55% are “financially coping,” and 17% are “financially vulnerable.”

Survey questions asked how people’s spending compares to their income, whether they pay their bills on time, how long they could live off their savings, how manageable their debt is, and more. For the most part, they were good questions, but the survey seemed somewhat incomplete.

If I were to develop a survey to assess people’s financial condition, I’d include the following 10 topics. As you read each description, rate yourself on a 5-point scale, with 5 being the most positive score.

Biblical financial worldview. How well do you know what the Bible teaches about money and to what degree have you put biblical financial principles into practice?

Income. While there’s no such thing as guaranteed employment, evaluate your employability. Are your skills up to date and in demand? Are you taking steps each year to hone your skills? How’s your network? Unless you’re independently wealthy, your ability to earn income is the foundation of your financial life.

Planning. Do you use a budget to proactively manage your household’s cash flow? Some people say they have a budget, but really what they have is a big picture idea in their head of how much they can spend. What I mean by a budget is a written plan that allocates your income toward giving, saving, investing, and spending.

Giving. Are you giving at least 10% of your monthly gross income to Christ-centered causes? I know some people get uneasy with specific generosity guidelines, but I believe 10% is the biblical starting point.

Saving. Would you be able to live off your savings for three to six months if you lost your job tomorrow? If you’re single and rent an apartment, you’re probably fine with three months’ worth of savings. If you’re married with kids and a house, you have what I call more breakable moving parts and should have at least six months’ worth of essential living expenses in savings. This emergency fund should be in a dedicated savings account, not mingled with your checking account money.

Also, do you save for periodic expenses, such as an annual life insurance premium, Christmas gifts, or other expenses that aren’t paid every month but will need to be paid at some point in the year? And do you save for the replacement of big-ticket items, such as your car?

Debt. Are you debt-free, with the possible exception of a reasonable mortgage—one that requires no more than 25% of monthly gross income for the combination of your mortgage, property taxes, and homeowner’s insurance, and preferably no more than 20%?

Investing. Do you know how much you should be investing to build a nest egg for your later years and are you investing that much? If you have kids, are you investing to help pay at least a portion of their college costs? And are you investing knowledgeably?

Protecting. Do you have adequate insurance—health, vehicle, homeowner’s, life, and possibly disability insurance?

Spending. Are you proactive about controlling your spending, being intentional about managing to the numbers in your budget?

Temperament. Especially if you’re married, knowing your temperament and your spouse’s temperament can be really helpful in managing money as a team. Even if you’re single, understanding how God has wired you up, and the financial tendencies that are associated with your temperament, can help you learn to play to your strengths. So, do you know your temperament and its financial implications?

Since there are 10 topics, there are 50 possible points. How did you score? While this is certainly subjective, I’d say if you got 45 points or higher, you’re in “very good” shape financially, 40-44 points means you’re in “good” shape, 35-39 points means you’re in “fair” shape, 30-34 means money is probably somewhat of a struggle for you, and anything less than 30 means you’ve got some work to do.

I know this list may feel overwhelming, but use it as a diagnostic tool that can help you develop goals for the next 6-12 months. Start with the topics where you gave yourself the lowest scores. Then search for articles about those topics on my site for guidance. Or if you’re part of a church with a stewardship ministry, see what classes are being offered and sign up.

Money is one of those things we never get fully right. We all have room for improvement. Hopefully by honestly assessing where you’re at with the 10 topics above you’ll be able to focus your financial improvement efforts in the right places.

The Most Underrated Type of Financial Knowledge Tue, 16 Oct 2018 13:30:20 +0000

When it comes to managing money, there’s a lot to know. Which retirement savings vehicle is best, an IRA or a 401(k)? Which type is best, traditional or Roth? How much should you spend on a house?

But there’s a type of knowledge that’s arguably even more important. Not having this knowledge can cause all sorts of problems—from settling for too small a salary to spending irresponsibly. It can spell the difference between knowing what to do and actually doing it. And it’s at the heart of more financial disagreements between husbands and wives than most realize.

What is this mysteriously powerful form of knowledge? Self knowledge.

Everyone is born with a certain temperament. It doesn’t change. Going through life without knowing your temperament leaves you vulnerable to being ruled by your tendencies.

On the other hand, knowing your temperament is like having access to the notebooks kept by an unbiased person who’s been observing you for a very long time. The insights will be invaluable.

At first, it’ll explain a lot. Why you’ve been having such a difficult time saving money. Why you love to give money away. Why you actually like using a budget, or why you can’t stand the idea.

If you’re married, and if you both take the time to understand each other’s temperaments, it’ll open up a whole new level of understanding. It’ll also give you an opportunity to divvy up financial responsibilities in a way that puts each others’ strengths to work while working around some of each others’ weaknesses. (Within each temperament, there are tendencies that tend to really help manage money well, and there are tendencies that get in the way.

I unpacked some of the financial implications of each tendency with separate posts about Sanguines, Melancholies, Cholerics, and Phlegmatics. A graduate level understanding of temperaments would look at the financial implications of the various temperament pairings. You see, each of us has a primary temperament and a secondary temperament.

You can gain some insights into all of this via a 1994 book written by Jerry and Ramona Tuma called Smart Money (Click on the hardcover or one of the used options).

For example, my primary temperament is Choleric and my secondary temperament is Melancholy, which the Tumas describe as “driven to achieve perfection” (yup), “among the most critical people alive” (I have to confess to a critical spirit; it’s something I’ve had to work on), and “they will finish projects simply because they need to be finished” (very true).

So let me ask you: Do you know your temperament? If not, I highly recommend that you begin exploring this topic. You should be able to identify your primary and secondary temperaments by taking a quiz put together by the Tumas, which is available for free in the Resources section of my site.

Understanding your temperament isn’t as simple as opening a savings account. It’s an ongoing process. First you’ll gain a basic understanding of some of the tendencies that come with your primary and secondary temperaments. Then you’ll notice more and more ways your temperaments influence your feelings and decisions. When you discover ways to put your natural strengths to work while working around some of your natural weaknesses, you’ll really be maximizing this knowledge.

Do you know your primary and secondary temperament? If so, how have you seen it impacting your financial beliefs and behaviors?