IDK Wednesday: IDK Where U Went

Sorry for the lack of post Monday… and today! I took advantage of what little holiday break I got and rested and recharged. Never fear–we’re back on sched on Monday.

“They shall always exceed their income”

Lately, every time I open my Facebook newsfeed, I see people getting engaged, married, moving in together, having a baby…

It’s weird.

When did we grow up so fast? People I had sleepovers with as a 12 year old are posting pictures of their precious baby boy on FB. Whoa.

This leads me to believe that a post on couple finances wouldn’t exactly be irrelevant. Having been with the same guy for four years (today is actually our anniversary) I feel like I know a bit about sharing resources. First though, let’s look at some prerequisites to sharing incomes.

If you’re in a serious, long-term, committed relationship (such as marriage, or common law partnership) you may want to share incomes. Just a note– common law partnerships usually automatically happen after a couple years (depends on the state you live in), if you and your partner share finances (have a joint bank account, have a lease together), and if you, ahem, consummate the relationship). Now, if you’re living with someone and living with someone, and you’re not interested in having a common law partnership, then don’t share income.

Now, assuming you and your significant other have moved to the stage of your relationship where you want to be together forever and ever and have babies together and a house with a white picket fence, let’s move on to some helpful tips on how to get started and make an easy transition into coupledom.

As I was writing this blog, it became evident to me it needs to be a series, as there is just so much info to cover. For now, we’ll start with the very basics:

Whether it’s toilet paper, a joint checking account or a house, you’ll need to talk with each other before doing anything with your money.

See, you think I’m kidding about the toilet paper, but I’m not. There are so many landminds in the discussion of what toilet paper to get. You might think it’s silly, but hear me out: He likes Charmin Ultra with Aloe Vera. She wants to get the cheapest, no-name  2-ply because it fits the budget. What’s to be done? He could giggle and give in, thinking it’s no big deal and there’s no reason to fight about it. But then comes the time where he will be in the bathroom for 10 minutes after Indian curry and he will regret giving in. And resent it if it happens again. Six years later, they’re divorced.

Because it’s not just about the toilet paper. It’s about spending personalities. Even if your personalities are the same–say you both agree that Charmin Ultra with Aloe Vera is the only toilet paper you could ever buy–sooner or later, when you realize you’re in debt because you couldn’t control your spending habits, you might find you’ll start taking your frustrations about your finances out on each other.

It’s important to figure out how you feel about money and about how your partner feels about money. Try to find a good balance. If you’re a saver and she’s a spender, try to save enough and spend enough to make both happy. You have to actually talk about money; what you want to buy, how you want to spend, where you want to keep it. I know it’s not exactly romantic, but it’s absolutely necessary.

If nothing else, Pride and Prejudice has taught us that despite having no fortune, we can be with that special someone we love. That love is better than money. And it is. But let me give you some perspective: After Bingley and Jane get engaged, Mr. Bennet remarks that he thinks they’ll do well together, but that they’ll be so kind and generous and get cheated by their servants that they “shall always exceed their income,” to which Mrs. Bennet replies, “Exceed their income?! He has 5,000 a year!” In that age, men looked over the accounts and kept the books of the household. So if the exceeded their income, Bingley had no one to blame but himself and no one in his way of changing things except himself. In our modern times, things are a bit different.

Darcy has 10,000 pounds  year. That’s at least $300,000 a year in our terms. If I had $300,000 a year and my beloved made $30,000, I’d hire a bookkeeper to figure out all the details and my sweet hubby and I would only fret about where to stay in Europe for the Winter. But that’s not what this blog is for. This blog is for people who are just starting out, and who will probably never see $300,000 in a year.

So get ready you cutesy, PDA-ing, honeymoon phasin’ kids! We’re gonna figure out how to keep your relationship well-funded, so that you can have and enjoy moments like this:

IDK Wednesday: Saving on Shopping

In addition to Monday’s post about how to save money on shopping by using deals, loyalty cards, etc., here are a few more tips:

1. Only go with cash. Leave your cards at home. You’re basically guaranteed you won’t go over your spending limit.

2. Ask yourself three times, “Do I really need this” before you buy it.

3. Go with a list. Only get what’s on your list.

Questions?

Coupon Queen

You know those loyalty cards you get offered… everywhere?

PetCo, Ulta, Borders, FroYo places… little punch cards where every time you get something, you get a punch and when you get the final punch, you get something free. Or if you’re a member, you get 10% off.

Or you know those silly paper coupons? Buy one get one free deals? $3 off whatever.

Or the brochure or weekly ads you get that say “10% off 6 bottles of wine!”

Or the emails you get saying 25% off purchases over $50!

It’s so easy to get these things. To sign on or up for them. It doesn’t hurt anyone, right? In fact, knowing when sales are happening can be helpful, right?

That is true. But let’s see if we can take this habit of signing up for membership cards, loyalty cards and email newsletters and use it to our advantage and make sure that marketing isn’t getting the best of us– and our wallets.

Loyalty cards. I went in to get an icy treat earlier this summer and was offered a loyalty card upon purchase. Before answering, I thought to myself: how often to I come to this place to get froyo? The answer was: this is the first time, and I’m not too impressed, so I don’t plan on coming back. So I said no. And I haven’t regretted it. On the other hand, one of the places I work at offers a loyalty card so that when you purchase 5 meal-deals, you get your sixth for free– this is a great value, especially for customers that come in twice a week. I think a wise rule-of-thumb is: How often do I come here? If the answer is weekly, or at least a couple times a month, a no-cost loyalty card won’t hurt. The only inconvenience is making sure you have it on you when you go shopping.

Membership cards. I secretly love these things. Especially the little keychain cards. These have the same rule of thumb as loyalty cards– “how often do I come here?” I have a card for PetCo and it saved me $15 last time I went and stocked up on kitty accessories. Again, having them on you is a priority for their usefulness, but oftentimes your phone number can be used to gain the benefits of your membership card if you left it at home. I suggest saying yes to free membership cards of places you visit often and places you know you want to shop at. For example, I said yes to the membership card at a local jewelry and accessory store not because I go there weekly, or even monthly, but I know that when I do want new pretty shiny things, I’ll be going there– so why not reap some auto-benefits that cost me nothing?

I think free loyalty/membership things are good to have in moderation. You don’t need to say yes to everything– but saying yes to places you’d shop even if there wasn’t a benefits program will only save you money.

Looking out for deals is smart. Seeking out excuses to buy more is not smart. When you go grocery shopping, there are always deals– you just may be oblivious to them. Next time you walk in, pause and look for the weeklies or coupons. Here’s the catch: don’t buy things you don’t actually need just because they’re on sale or there’s a special deal on them. At my local grocery store, there’s a coupon for “Buy a 12-pack of Diet Coke, get 1 NYC Nail Polish for Free!” I don’t drink Diet Coke, and the nail polish is only $.99 anyways. Just get the polish; the coupon is a trick to get you to spend more. Now, if you drink Diet Coke, and it was on your list anyways, why not swing by and get the nail polish? Look for deals and specials on things you were already planning on getting. Another way to benefit from coupons and weekly ads is taking advantage of deals on things that are dream or wish items. Special, exotic chocolate bars on sale for 1/2 price sound like a nice treat to me, even if you weren’t planning on getting chocolate.

Emails. These are the most dangerous offenders of retail marketing there is. Browsing your favorite store–clothing, accessory, whatever– you’ll be prompted to sign up for emails telling you about special deals. Beware. Doing this will make you want to buy the things. Retail will always have sales. They have a calendar stocked full of them. These emails will tempt you will special, limited-time offers, but more often than not, they’ll be having another similar sale, soon. Now, if you’re in the market for new shoes and it’s in your budget, and you get an email from your favorite shoe store saying it’s buy one, get one half off, before you go crazy and come home with four pairs of new shoes, think to yourself– do I need two pairs right now or do I just want them? There’s nothing wrong with taking advantage of a deal that was made specifically for you to buy more merchandise, but being informed makes you more responsible. Just remember–you can always unsubscribe to the store’s email, and when you need to buy something, visit the website and see if there are any deals going on.

If you feel like it’s silly not to take advantage of every deal there is, you might be Honey Boo Boo Child’s mom.

IDK Wednesday: Student Loans

Confused about what to do about your student loans? Every situation is different– ask me your questions and we’ll figure out a solution. You shouldn’t be struggling to pay back your loans. Let’s find a solution. (PS- for those of you that haven’t submitted a question before, know that these questions go to my email, where my response is emailed back to you! No one will know your biz.)

The two words that make me involuntarily cringe

Student loans.

Funny how these two words can conjure up anxiety, despair, worry, stress and tears (for those that have them, which is a huge majority of graduates). Like many of my peers, I signed my name to these seemingly innocuous documents. I mean, it was either that or don’t go to the university of my choice. My parents didn’t have enough to pay for the part of my tuition that grant/scholarship money couldn’t pay for. And my whole life I was told that I would go to college, and that I could go to any college I wanted and that I could major in anything I wanted. So, the private university of my choice it was, and I was determined to go, despite not being able to afford it. I mean, everyone  has student loans, right? And they’re good investments anyways, right? Once attained, I’ll always have my degree, I’ll always have the knowledge gained. So what if I owed money after graduating? What was my alternative? I’d have a career anyways to pay off the loans over time.

This is what we tell ourselves. And, for the most part, it’s true. It is a good investment (especially compared to the money you pay for a car, which isn’t an investment, it’s a pure expense). You will always have and use the knowledge you gained. Plus, who can put a price on all the amazing experiences you had in college? No one. They’re priceless. If you can’t afford to pay for college (you or your parents) you basically have three options:

1. Don’t go.

2. Get more money through working.

3. Get more money through scholarships or loans.

Let’s face it, for many of us number one isn’t a viable option. Number 2 is pretty viable, though very stressful and can sometimes hinder the whole degree-getting process. So number 3 seems like the best option. More scholarships are difficult to attain sometimes. And when there’s a shiny, pretty piece of paper offering to loan you the difference (and you don’t even have to pay for it while you’re in school!), that seems like the answer to your prayers. I know it did to me.

So we sign off on them. Year after year. It doesn’t seem like much at first. $5000 here, $10,000 there. And the interest is covered! And you don’t have to start repaying until 6 months after you graduate! You’ll have a good, solid job by then!

Two weeks ago, I received a piece of mail that when opened, made me shriek upon reading it. My friends were alarmed, thinking I had received terrible news.

My federal loans were to enter repayment December 21st.

My time had come. It felt like the gallows.

I mean, I know the exact amount of what I owe (it’s in the 50,000 area, for those of you curious readers). I knew it would be coming soon. But actually getting the letter telling me the inevitable was upon me, I wished I had a prescription for Xanax. And this was just for my federal loans. What’s awful is that about $30,000 of the $50,000ish I owe is… gulp… private. Which is the actually terrifying thing.

Why? Let me break it down:

Federal loans– owned by the government– will do anything to make paying the loan easy for you. They have a myriad of repayment plans– including a new Income-Based repayment plan (thanks Barack!) that bases your monthly payment off of 10% of your annual income, and stretches your repayment time to 20 years (and if you make it to 20, anything not paid off could be forgiven depending on your circumstances). This is the plan I’ll be choosing. But there are lots of others that could fit your needs and circumstances! And as long as you’re in contact with the Feds, not ignoring them, they’re really lenient. Just let them know you’ll be missing a payment due and it’s fine! Plus, there’s quite a few ways to have your loans completely forgiven; Peace Corps, teaching, librarian, armed forces, etc. Awesome right?

Private loans, however, are bitches, to be quite frank. They don’t offer various repayment plans to make it more affordable for you to repay. They usually don’t offer any ways of deferment or forgiveness, except if you’re going to grad school. You must repay on their terms on their timetable. If you have trouble paying? Good luck getting anyone sympathetic on the phone. I haven’t tried to figure out to tell my private loan holders I won’t be able to pay their $350 a month payment yet, but when I do, I’ll let you guys know how it goes and what’s best to do.

So, for those of you who also got the letter not to long ago, here are some helpful things you should do:

1. Organize your loans. I suggest Student Loan Hero. You can also use Evernote or an Excel spreadsheet. You need to know the principal amount you owe (how much you initially borrowed), the interest rate, the amount due each month.

2. Decide how you want to repay your federal loans. Is consolidation better for you? There are pros and cons! Which repayment plan fits your needs best? Are you poor with a not-so-good part time job or did you land a job at Google right out of college?

3. Talk to who owns your loans. For federal loans, it’s most likely FedLoan Servicing. Call them up and change your repayment plan, your due date, tell them you’re deferring, that you’re doing Peace Corps, or whatever it is that you need to tell them. Communication is key.

4. DO NOT IGNORE YOUR LOANS. They will never go away unless you pay them off. You NEED to pay or let them know why you can’t pay, ASAP. Student loans effect your credit score. Since the interest rates are so low, this is actually the best money you can owe. Take solace in that.

5. Pay. Whatever your amount is per month, pay it. In fact, if you sign up for the auto-payment, you get some numbers knocked off your interest rate, so you pay it off sooner and for less money. Nice, huh? You need to put the monthly amount into your budget and make sure it’s a priority. If you can afford to pay more than the monthly amount, do it! By all means, pay more to get them over with faster. Call up the reps and tell them that the amount over your minimum you want applied to the loan with the highest interest.

Next week we’ll deal with private loans.

I feel I should mentions, since the elections are tomorrow, that who you vote for directly impacts your loans. One candidate has done lots for student borrowing already– easier payment plans, forgiveness, buying private loans to make it easier for borrowers to repay, placing stringent loan practices on private companies… the list goes on. The other candidate wants to reduce Pell Grants, making grant money less available to students, leaving them with borrowing as an option to pay and touts for-profit colleges as good institutions. To find out more, you can go to StudentDebtCrisis.org 

Above all else, when you get down about student loans overwhelming you, making you feel like you’ll never get to lead the life you want to lead, remember the great times you had in college. That’s what I do. The pictures below are favorites of mine that remind me of what I bought. 🙂

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