Financial Problems in a Marriage

It is said that marriage is the best thing that can happen to two people in love. It is true, provided the spouses understand each other and are aware of the responsibilities that come with marriage. However, married life can suffer a setback, if there are financial issues in a relationship and the partners do not work it out properly to solve these problems. In studies conducted by experts, financial issues have been included as one of the top reasons for a divorce. So, it is always better to be aware of financial problems, if any, and find effective ways to deal with them.

Monetary Issues and Their Solutions

Handling Finance
This is one of the basic issues that married couples face. They are not clear about whose salary should be used for household expenses and whose should go in for savings. Lack of planning leads to confusion, ultimately resulting in differences between a couple.

Solution: Couples should try different ways to handle their finances and check which one works the best for them. According to surveys, around 64% of couples have joint accounts, 14% of them have separate accounts, and 18% of couples have both joint as well as separate accounts. There is no particular method to handle finances; it depends on a couple as to how much they want to spend and how much they want to save. So, sit down to decide among yourselves, and make the best call for your future.

Excessive Spending
Among the various money-related problems affecting a marriage, spending habit is a contentious issue. Many a time, one of the partners is inclined to shop and spend more than the total earnings with the help of loans and credit cards. Mounting bills and high interest rates can really make things difficult for the family.

In certain cases, among the two partners, the wife mostly has the habit of presenting her family with goodies every now and then. The expenditure made, might irritate the other partner and ultimately give rise to arguments.

Solution: Couples should fix a budget for the month and keep a check so that the expenditure does not exceed the limit. As far as possible, use of multiple cards should be avoided. When going through tough financial times, couples need to cut down on entertainment and leisure expenses. Wives and even husbands, if either is into the habit of buying unwanted gifts, should keep away from doing so. This is because, occasional exchange of gifts does not affect, as much as the usual ones do.

Mounting Debts
Sometimes while making hasty decisions, it might happen that married couples tend to apply for house loans or car loans without figuring out their repayment capacity. Apart from that, some are even in a habit of using credit cards in excess. This negligence in handling money leads to rising debts which becomes difficult to repay in future.

Solution: Taking loans only as per one’s need and repayment capacity, is the first solution to avoid the problem of mounting debts. One should have realistic aspirations and dreams, and think twice before applying for loans and pledging assets with the lenders. And, if both the spouses are working, they should contribute equally to pay off the EMIs.

Improper Investments
In order to lead a settled life, couples have to think about their future and secure it. Investment done inappropriately is one of the prime factors to be looked into, especially when you have a family to take care of. For this, couples have to make precise investments and while doing so, they have to be careful as it might be a risky affair.

Solution: Couples should figure out the investment goal and time frame, and make sure to review their investments at least once a year.

Unnecessary Expenses
Love is blind and people in love know no boundaries when it comes to spending for each other. They tend to buy expensive stuff in order to please their respective partners. This act of unwanted splurging causes problems later on, and couples start blaming each other for mismanagement of money.

Solution: In order to avoid financial hassles, couples should refrain themselves from buying expensive gifts and going for lavish holidays. As is rightly said “cut your coat according to your cloth” couples should spend according to their capacity.

Crisis
An unstable monetary situation arises due to the lack of savings for your future use. An accident, a major illness or an unexpected pink slip, or any other emergency – all situations which require you to dole out a large sum of money – can land you in peril.

Solution: Problems are unavoidable and can never be predicted. So, instead of waiting for the problem to arise, couples should keep themselves prepared for the bad times. They should make sure that they have an emergency savings account. They should plan their monthly savings together along with a target amount to be saved every month, so that they have enough in hand when a sudden need arises.

Ego Clashes
This is the age where women have caught up with men in every field and are the breadwinners. These days, in many households, we can find women earning more than men which hurts the male ego to a great extent, and if a man is jobless then the situation gets even worse. In such cases, it becomes really difficult to save the relation, as both the partners have their self-pride and none of them is ready to bow down.

Solution: Marriage is a union of two souls and bodies, so couples should treat each other as one. To avoid ego clashes, men should see situations in a broader perspective, and instead of getting offended by their respective wives’ earnings, they should encourage them to work. After all, whoever earns, eventually the income will be utilized for the family.

Keeping Financial Secrets
This is undoubtedly one of the biggest financial problems in a marriage. Many spouses are seen hiding their financial documents, bank account statements and information about their assets, which can be frustrating for the other spouse.

Solution: It is always better to speak the truth, and show all your financial details to your partner. By doing so, your better half would be able to suggest ways of dealing with finances, if need be.

Some Tips for Managing Family Finances

A family begins with ‘We’ and not ‘I’. So, while dealing with money matters, always remember that you should think for the well-being of your family.
If your problems are too big, take suggestions from a financial planner.
When you commit to managing finances, fulfill it at any cost, because the other person relies on you.
Think before you spend, because money should be used wisely.
Try to avoid interference from relatives in your family finances (if any).
Don’t be jealous of a higher-earning spouse. Instead, motivate your partner to do well in his/her career and earn even more.

Marriage is a lifetime commitment, so never ignore the petty issues. Financial issues can be resolved easily, so do not waste time crabbing about it. Your family’s betterment and future depends on the same.

Financial Planning Tips For Couples About To Start A Family

Couples, especially newlywed ones, would usually enjoy a bit of financial windfall for the first few months or years of their marriage. This is mainly due to the fact that two people are now sharing the expenses on food, utilities, and other expenditures. There are also more opportunities for couples to save money since they have lesser expenditures to pay for.

This happy situation can easily turn sour though when couples are expecting their first child. With this new bundle of joy come various additional expenses that parents will sometimes find it hard to cope with their financial needs and even adjust their lifestyle.

Couples, though, don’t need to find themselves broke simply because they are expecting or already have their newborn baby. Below are some useful financial planning tips couples about to start a family can follow:

Start living a simpler lifestyle. It is not unusual for newlywed or childless couples to have date nights once or twice a week wherein they have dinner at a fancy restaurant and give each other lavish gifts. They will also go on vacations abroad once or twice a year because they want to get some rest and relaxation and because they “deserve it”. Unfortunately, all of these will have to change or even stop once a couple is expecting a baby. All the money you will save from these activities or events can go to something more important like payment for the hospital bills, medicines and vitamins, diapers, and other expenses that come before and after the baby’s birth. The last thing you want to happen is to be covered in debt just because you are expecting a baby. You can avoid this problem by living a simpler lifestyle once you know that you are expecting.

Anticipate your expenses. Make a list of all your anticipated expenses. These include hospital bills, doctor fees, maternity clothes, birthing classes, and necessities for the baby (a crib, stroller, feeding bottles, blankets, etc.). Then, calculate the total. You now have to rework the budget you and your partner are currently on to include this cost. Expect that there will be expenses that have to be added in the future but don’t fret; you will be able to figure them out as you go.

Increase your emergency fund. If you already have a safety financial net, you and your partner or spouse should now work on increasing it. Financial advisors recommend having six-to-nine months of living expenses set aside in case of job loss, which can become more of a problem if one spouse is at home on childcare duty. Look at your budget again and figure out how much you can afford to put into an emergency fund after all the basic necessities are covered.

Managing Your Finances After Buying Your First Home

If you are young and buying your first home, it can be a very scary time in your life. However, it’s also very exciting to think that you are going to own your property for the first time ever. This is truly the American Dream at work! Chances are, your mortgage payment will be more expensive than whatever rent you were paying before you were a homeowner. You may be worried about how to budget after you close on the house, but you will catch on quicker than you think. If you couldn’t afford the house, the bank wouldn’t have given you the loan, so get ready to crunch some numbers and enjoy the first year living in your new abode.

Pay Attention to Your Lending Officer

Before your loan is even approved, your lending officer should sit down with you at the bank and give you a quick run down of the numbers. If they don’t, you should ask them to do so, or find a lending officer that will; it’s totally OK to shop around for lenders, especially in this economy. When you meet with your lending officer, don’t be afraid to ask questions and/or take notes. When you lock in your interest rate, they will tell you exactly what your mortgage payment will be, and if you choose to keep your taxes and homeowner’s insurance in escrow, they will calculate that in, as well. Pay attention to that monthly number, and use that to set your new budget.

Set a New Budget

Hopefully, if you’ve bought a house, you have already set some sort of budget for your living expenses pre-homeownership. If you have, it should be relatively easy to set a new budget that accounts for your increased living expenses. Just plug-in the number from the bank for your monthly payments and make adjustments as necessary. You will have to cut some things out; that is almost inevitable. However, make sure it is something you can live with. Spend less money on clothes, for example, rather than cutting your grocery budget in half. You need to eat!

Communicate with Your Partner or Roommate

If you are buying this house with your spouse or partner, or if you are having someone move in and pay rent, be sure to communicate expectations and concerns openly. This can make or break a partnership when it comes time to pay all that money at closing. When you figure out what everyone owes, make sure you tell everyone upfront. If you are having a renter live with you, it’s not a bad idea to draw up a lease arrangement and have a lawyer look at it. That can save you a lot of trouble down the road.

Learn to Cook

Cooking your own food can be significantly less expensive than eating out every night. When you cook, you often have lots of leftovers, too, which you can eat the next night or for lunch the next day. It would be such a shame to waste your new, awesome kitchen in your new house, so if you don’t already know how to cook some simple meals, now is a great time to learn how.

Find Free Entertainment

Entertainment is what costs most people the most out of their budget. Once you learn how to cook, you can also find some free or inexpensive entertainment options. Staying in can be fun, too. You can go to the library and rent movies and music for free, or visit your local park and explore your new town.

 

How to Financially Survive the Wedding Season

Research suggests that attending one wedding can leave you $500 lighter (spending on yourself, your clothes, the gift, and other miscellaneous expenses). And this does not include travel expenses in case you have to travel to another city for the wedding. While insurmountable expenses are inevitable for the couple headed into wedded bliss, for the guests attending the wedding, the day(s) can be saved. You are obviously going to have to shell out a few bucks for the gift, your attire, and the parties before and after, but these can be controlled significantly by one simple measure – planning! Head into the wedding season without a plan, and you won’t know what hit your savings. On the other hand, a little planning, even though it may end up with you going slightly out of budget, will keep you within spending limits and help you get through the wedding season financially. To make a plan, consider the following questions:

How many weddings have you been invited to?
How many weddings do you absolutely HAVE to attend?
How many involve the same group of guests?
How many people are you close to among the guests?

Why is this important you ask? So that you can prepare a budget, your wardrobe, choose a gift, and make travel plans accordingly.

Is Attendance Necessary?
Bombarded with too many invitations? Choose the weddings you genuinely want to attend above the ones you know you could give a miss. You don’t have to feel guilty for missing someone’s wedding. Wouldn’t you rather spend more on your buddy’s big day than for someone you’re not so close to? Just politely decline the invitation at the appropriate time so that the couple can make arrangements accordingly.

Dress Up or Dress Down
Most of us end up spending a lot of money on clothes for the wedding of someone we may not be very close to. But there are ways in which you can look your best at a wedding without having to make a hole in your pocket. Consider the following factors when deciding on your outfit for the event.

The Venue:
This will decide whether you are going to wear a simple, light floral dress, or a designer cocktail dress; a pair of linen pants and a simple, light shirt or a formal suit, and how much you technically have to spend.
Can You Repeat your Outfit at Multiple Weddings?:
This is possible if the group of guests attending one wedding are unlikely to be present at another wedding. This makes it easier for you to repeat your outfit. (Of course, you may have to deal with being tagged in multiple pictures on Facebook in the same outfit.)
Can you Borrow?:
So if you know that the same group of guests will be attending, or if you can’t stand the thought of being tagged in the same outfit at different weddings, consider exchanging outfits with your friends so that you have something new to wear without having to spend much.
Your Closeness with the Couple:
You are expected to dress in a particular way if you are closer to the bride or groom or both of them. For a wedding where you aren’t so close to the couple, you may tone it down a little and save some bucks.
Mix and Match:
If you can fish out a good skirt and accessories, then all you have to do is find a good blouse. Or if you have a simple dress, you can jazz it up with a good belt and a nice pair of shoes. If you find the right jacket, you can get a good shirt and trousers to go with it. Sometimes even a good tie can make all the difference. If you can find even one item in your closet, it saves you that amount, and you get to sport a unique look at every wedding.
How Good You are at Doing Your Own Hair and Makeup:
This one is specific to women. If you aren’t good at it, learn from online tutorials. There’s no way you can survive the wedding season on a budget if you go for professional services all the time.
Why not Rent Your Outfit?:
If you can’t afford to buy a different outfit for different occasions, you don’t have clothes that you can mix and match, and you can’t wear the same outfit at different weddings, rent your outfit. You’ll find it at half the price as compared to retail stores, and can hence save a lot of money.

What about the Gift?
You just can’t go to a wedding without a gift. But there are lots of things that count as gifts and don’t cost too much. Try out these ideas.

Rush to the Gift Registry:
If the couple has signed up at a gift registry, try getting there as early as possible to get the good and the less expensive stuff for them.
Chip in for a Bigger, Better Gift:
This is why you need to know lots of other people who will be attending the wedding. Get together and buy a gift that will truly wow the couple! This way you don’t have to spend too much money, yet you get to give them a great gift!
Make Something Yourself:
If you are really close to the couple, and you know they will appreciate the effort, make something for them yourself. Use your knowledge or learn how to do it through the Internet, and give them your love and affection through your handmade gift.
Offer your Help/Services as a Gift:
If you think you can’t afford expensive gifts, offer to help the couple with the wedding arrangements and ensure that they know this is your gift to them. For instance, if you know people and can pull strings to get one of the many things they badly want for their wedding (such as a particular decorator, a band, or even an ice sculpture at a discount), this could be a perfect gift for them. Also, if you are involved in the planning, you can help save the couple’s and your own costs in certain areas, e.g. if it is a destination wedding, you can get bulk discounts by making bookings for the entire group.

When the Wedding is Out of Town
This is when it can get real difficult. While some couples are generous enough to make arrangements for all their guests, there are some that can’t. In such a case, you’re left to fend for yourself. How do you make the most of this situation?

Chip in for Bulk Discounts:
Yet another reason knowing other people attending the wedding can help. Bigger bookings help get better discounts. It’s as simple as that.
Be the Early Bird and Save:
The sooner you make your bookings, the cheaper they will be. This may not be feasible for everyone, but if you can travel on an off-peak day, you can even save flight costs to a certain extent. Lots of websites offer packages at discounted rates which you can make the most of in the financially burdening wedding season.
Stay with your Friends/Acquaintances:
If you know someone in the place you are traveling to and who will willingly put you up for a couple of days, you my friend, have struck gold and saved a LOT of money. Of course, remember to repay your friend/acquaintance with a nice gift, or offer to do the same for them when they come to your town.

The best way to avoid getting hit unawares in the wedding season is to plan, and to save. You have to keep some amount aside if you know weddings are coming up and you just can’t avoid them. Finally, don’t let the expenses bog you down. Just go and have a good time at these weddings and give yourself a break!

 

Personal Finance for College Students

College is often a student’s first experience with total independence, and the natural tendency is toward hedonism. You will undoubtedly spend the first month or so methodically doing all the things you could never do at home. This is totally fine and completely natural (but keep it safe, guys) – as long as you calm down and get to work once the rebellion is out of your system. Because now you have to act like a grown-up person, with finances and everything.

Seriously, it’s incredibly easy to graduate college with a mountain of debt, and don’t assume you’ll snag a high-paying job right away – you won’t. So you’ll most likely be underemployed, badly paid, with crippling monthly bills. Then six months later, your student loans come due. Of course, you’ll get a promotion or a better-paying job eventually, but in the meantime, those bills are still due. It’s better to just avoid the debt in the first place.

Avoid Loans

Avoid student loans like the plague. Apply for grants, chase scholarships, work and save, do whatever you have to do to avoid loans. If you can’t afford your dream school without them, look into cheaper schools. Or, take your core classes at a community college (cheaper!), then transfer to the big school for the classes that really count. You’ll end up paying for fewer credits, but you’ll still have the fancy name on your degree (savings!).

Student loans last forever. It’s not unusual to graduate with over $100,000 in loans, and those payments start six months after graduation. And they can be as high as $800/month, or more. And you’ll be paying them off well into your forties. Every month. Whether you’re flush with cash or not. If you default, they can (and will) garnish your wages and take any tax returns until you’re paid up. Declare bankruptcy if you want, but the student loans stick with you. Defaulting also destroys your credit, so forget about ever owning a house, car or credit card. Oh, and the interest rates can be as high as 19%, so it’s actually possible to watch your balance climb as you make payments for awhile. Yeah.

Work

College is expensive, even on a day-to-day basis. If you can manage it at all, have a part-time job while you’re in school. Look for night jobs that won’t interfere with your classes, or try to schedule classes in blocks to leave the most free time. The trick is to not work so much that you don’t have time to sleep or study, because flunking out definitely doesn’t do you any favors.

Even if the pay is crap, having a few extra dollars in your pocket really comes in handy when you’re starving and the cafeteria’s closed. Or you need extra supplies for a project or something. Part of the point of college is to learn how to be prepared and self-sufficient.

Eat Smart

Don’t automatically buy your school’s meal plan – investigate first. Some school cafeterias are actually pretty expensive for three meals per day. If you’re allowed to have a mini fridge, microwave and hot plate in your room, you’re golden. Be a grownup and cook your own food. This will come in handy later in life.

Whatever you do, don’t eat every meal out, and limit convenience store runs. It’s tempting because you’re tired and overworked, but getting ripped off is never fun.

Credit Cards? Maybe.

Be wary of credit card offers. Discuss them with your parents first. Look for low rates and no annual fee. If you find a great offer, take it – but be responsible. Don’t treat it like free money, because it’s not. It’s helpful for real emergencies, like car repairs and medical issues, but do not rely on it for everyday expenses. Treat it like it’s not even there. Pay off your balance at the end of every month, and NO LARGE PURCHASES! Irresponsible credit card use is one of the quickest roads to bad credit and a lifetime of debt.

Being a penny-pinching miser during college is one of the best things you can do for your future (the other is graduate), but it can be hard. You’ll see people living it up, blowing money on booze, designer clothes, video games, cars, etc., and you’ll be jealous. But patience is its own reward – five years from now, those people will be asking you to cosign loans because their credit is shot and so is their car. Either that, or they’ll be taking the bus to the four jobs they need to work to pay off their debts.