IDK Wednesday: Christmahanakwanzaa

Hey, gang!

Sorry about my lack of post on Sunday. I was out of town with my very boyfriend (who spends most of his time in a foreign country learning things), so I devoted my attention fully to him and had none leftover to write a post.

Nevertheless, here is a helpful list of ways to afford gifts for your loved ones this holiday season.

1. Make a list. I know it seems weird to prioritize your loved ones, but you need two lists: “people who need real gifts” and “people who don’t.” The first list usually includes: mom. dad. significant other. Et cetera. The second list usually includes: everyone else. Sorry, but when you’re poor, you need to figure out who can live with getting a big fat hug for Christmas.

2. Buy the real gifts as cheap as possible. Mom wants some new perfume that you can’t afford? Get the trial size and say you wanted to be sure she liked it before you got the big bottle. Dad wants some new gadget? Coordinate with your sibs and get it together. You get the drift.

3. For the people on your second list that you fee to guilty not giving anything, why not host a Secret Santa or White Elephant party and put the limit as high as you can without breaking the bank. Having the fun time together with your friend-family will make up for not getting them super awesome gifts.

4. Give of yourself or your time. Even if you can’t afford to give all friends and family a tangible gift, you can always give of yourself or of your time. Offer to clean the whole house as a gift to mom. Give your friend a voucher to use to call on you at any time in the night to pick them up from a bar, or to help move them out of their apartment at the end of their lease.

5. Get crafty. Pinterest was created literally for this moment. Find a cool, funky thing to create that doesn’t cost a lot of money and make it for your roommates.

IDK Wednesday: MAWIDGE

ERMAHGERD, you’re gettin’ married. Have couple-finance related questions? Get em’ to me.

Beyonce knows everything about marriage and money

A lot of my knowledge about money and relationships comes from Beyonce’s insightful lyrics.

If you like it, then you should have put a ring on it. Girls run the world. I bought it. I even put money in the bank account, don’t have to ask no one to help me out. Partner, let me upgrade you.

I imagine that Bey and Jay’s life is perfect. If you think I’m way off base, check out her tumblr. Try to stay away from sharp objects as you look at the glory that is her world.

But I digress. This post is about the first three things you and hubby/wifey are going to have to address when it comes to living together

1. Accounts. Just because you’re joining your life and future with someone else does not mean you don’t keep your own checking and savings and retirement accounts. You will always live with you. You’ll always need to take care of at least yourself. I know this sounds harsh, but hey, more than half of all marriages end in divorce, these days. If things don ‘t work out, you’ll need to have your own money. Keep all of your accounts, and open a new account together. It’s super easy. Find the best bank and best rates and open a joint account. And while I’m on the subject, I think we all remember that golden Kayne line: “We want prenup. WE WANT PRENUP YEAH.” Preparing for an end of a marriage, while bleak, shows that you’re mature enough to get married. Real talk– when couples get divorced, assets are not automatically divided 50/50. That’s what people go to court for: to fight for what they think they earned during the marriage. It can be hard to win. Now, a prenup ensures what you want it to: you can say that you leave with what you came in with, or that you divide everything 50/50… or whatever you and your dearly beloved decide. Hopefully it’ll never have to come to that, but you know that in the very worst case scenario, you’ll AT LEAST be okay financially, even if you’re broken emotionally for years to come. If you decide not to do this, just never say I didn’t warn you.

Now you have to figure out how to fund your joint account. Most people automatically assume that the responsibility of funding a joint account should be 50/50. But that’s not always fair. Say that one person is an investment banker and the other is a teacher. One is making way more money than the other, so there’s an unfair burden on the one with a smaller paycheck to put in half of his/her paycheck. Instead, finding a better number to split might be better. Try this ratio:

Person 1’s income/total household income= the percentage they should put into the household budget.

Person 2’s income/total household income= the percentage they should put into the household budget.

The same goes for savings. There needs to be a family savings account– so that you can use the money for joint purposes, such as buying a house. Figure this into the ratio.

Joint accounts should only be used for joint purposes– rent, bills, groceries. You both need to sit down and figure out the budget for joint expenses– whatever that final number is needs to be in your checking account every month. Add some padding for varying expenses. You both need to be aware of the balance and charges to the joint account. Whether you decide to let one person handle all the bill paying and buying from the joint account or whether you both sit down weekly, bi-weekly or monthly to go over your finances (I suggest making it a fun night in or out), it’s important that control and oversight go into managing the account.

Each of you needs your own retirement plan– it’ll make things better whether you stay together for 50 years or not. Most financiers agree that retirement is the one things couples shouldn’t do together. Don’t believe me? Further your education with this information. In fact, you should also both stagger your retirement dates for reasons complicated and strange. Basically, fund your own retirement account and figure out who will probably want to work longest.

2. Credit cards. I am of the mind that you don’t need joint credit cards. It seems unnecessary. If you want to pay for groceries, do it with the joint account’s debit card, not your own personal card and then get reimbursed. I’m sure you could say, “Well what if we get a joint credit card and use that only for joint purposes?” That’s fine, I say. Beware: having a joint credit card is risky– while you are showing that you completely trust your partner by putting your credit score in his/her hands each time they go shopping, you’re also putting your credit score in his/her hands each time they go shopping. Think about it. If you both are truly able to only use a joint card for approved joint purposes, then all you have to do is have one person apply for a new card and assign a joint holder. Easy peasy.

3. Bills. There is a myriad of ways to decide how joint bills are paid and who pays them. The easiest way seems to pay from the joint account, but you could also make a different arrangement that suits your needs. The partner with higher income could agree to pay rent while the other pays all the bills. You could split everything 50/50, 60/40 or whatever. But like I said, paying from the joint account where you’ve already budgeted how much needs to be in the account is easiest. Like I mentioned earlier– make a date night of it. Nothing like talking about money and then cuddling.

Now you’ve got the first steps of planning your co-financial life together. Remember–be like Beyonce. If you and hubby/wifey do it right, you could be like this:

See? That could be you and your avowed if you play our money-cards right.

Preemptive Strike

Remember in my last post I talked about needing to know yours and your partner’s  spending personality? Well, today we’re going to focus on that.

Why is this important? Well let me ask you: do you know what toothpaste your partner uses? Which side of the bed they sleep on? Whether they’re a morning or night person? How they like their coffee?

Hopefully the answer is yes.

Now let me ask you: do you know how your partner feels about money? What they’d do if they got a $50,000 inheritance? How they feel about sharing finances? How they feel about a splurge sesh?

If the answers to most of these questions are no, you should be just as worried as if the answers to the first questions I asked are no.

How could you want to combine your life with someone before you know how your financial life together is going to be? Would you want to marry someone before you kissed them, banking on the fact that they seem nice to kiss that your sex life will be good?

Exactly.

Like I said, talking money might not be as exciting as those sweet-nothings whispered into your ear, but I promise–talking about your money-life is a different kind of exciting. You feel empowered, more cooperative. Guess what the number one thing people go to couple’s counseling about? Money. Let’s keep you and hubby out of the doc’s office with some preemptive strikes.

First, find out what you like to do with money. Then find out what your partner likes to do with money. Try this quiz. Then talk about your answers. Explain any discrepancies, so that the other will understand.

Knowing each other–in the money sense– is the first step to a happy together-life. Get on it.