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Save vs. Splurge for Wedding Night Hotel

Written by on January 26, 2012 · 23 Comments

What do you do when you realized that you picked a really popular area to get married during the start of the tourist high season? I find myself in that position, as I scour the interwebs for a hotel for our wedding night / mini-moon. It turns out that Santa Barbara - one of my favorite cities in the summer, while a lovely place to get married, is also extremely pricey if you want to stay in a nice hotel to celebrate the start of that marriage. All the hotels and bed-and-breakfasts that come highly-rated cost at least $250+ a night, plus taxes and fees. The places that are a little cheaper, at between $150-$200, have some fairly uncharitable reviews that give me pause. There are some lower-end motels or hotels that are around $150, but I am not THAT frugal.

Still, as much as I enjoy a luxury hotel stay (I do), and as much as I understand that weddings / honeymoons are probably not a time to skimp on accomodations (I do), it pains me to think about spending $300+ when I’ve stayed at gorgeous properties for half that price. On the one hand, I suppose it’s better to just spend a little extra to guarantee a good experience, but on the other hand, it’s so much money. Thus began an internal battle between the personal finance blogger and the bride-to-be.

But then, inspiration! I started looking outside Santa Barbara… and found that by staying in a seaside town a few hours north instead of the seaside town where we are getting married, we will save up to $100/night for a hotel of comparable quality. Instead of $250/night, we can pay $150/night. Three nights stay means a saving of $300, which will be enough to pay for some horseback riding, a nice dinner, and event a jaunt to the Hearst Castle. So here’s our plan: after our day-time wedding, we are going to drive up the Pacific Coast Highway and check into our hotel for a 3-day mini-moon before our official honeymoon to Buenos Aires the week after.

What would you have done in my case? How much would you spend (or have spent) on your wedding/honeymoon hotels?

Categories: Love, Luxury

Seeking: Words of Wisdom for Newlyweds

Written by on January 18, 2012 · 21 Comments

Most of the folks in the personal finance blogosphere have probably heard about J.D.’s announcement on Get Rich Slowly. At last view, the post had over 350 comments. I don’t have anything of value to add, except to say that I wish the best for both J.D. and Kris, and also admit that I was caught off guard by how heavily this news hit me.

land of marriage Seeking: Words of Wisdom for Newlyweds

I am getting married in June. I said yes to the dress and CB got his ring and we are planning out our honeymoon. On our wedding website, I talked of us embarking on this “grand adventure called marriage” together. Then I realized, this institution / commitment / relationship called ”marriage” is an adventure… in a strange land that we have never been to. We talk about what we think it will be like, what the terrain may be, the hills and valleys. We have some maps, but we don’t know how accurate those maps are or whether new obstacles will sprout in the future, blocking off roads that we thought we can navigate. We have a compass, but that compass might break or be lost on the way. We’ve heard others’ stories about their journey to that strange land, but we know that while the same wind, streams, and animals may exist for us, but their presence or dissappearance will be one we have to experience on our own.

So, there is a lot of excitement about this adventure together. But there is trepeditation as well. Not of who we are now, or how we feel about each other now, or our commitment now, but of who we will be in 10 years, 25 years, 50 years. Who we will become. How we feel about each other then. Our commitment through trials that we have not yet experienced and indeed, probably have not even foreseen. There are many studies out there on the financial consequences of divorce. And as this is a personal finance blog that might be what I should talk about. But money is money – it’s just money – I have confidence in myself that I can make enough. Love, trust, a shared sense of history – that’s a whole another thing. That’s what I am afraid to lose to an unhealthy marriage or a divorce.

My fiance and I met ten years ago in high school, and we have certainly changed during those ten years. I have no doubt we will change during the decades to come. In fact, two months after we get married I will be starting my MBA program and CB will likely be in another graduate school program in another state. People change, goals change, health and finances change, distances change. What we want out of life might change. How do we grow together and not apart?

I’d like my readers, especially those of you who have been in long marriages or have reconciled from conflict or separation, to impart some words of wisdom for this pair of soon-to-be-newlyweds.

Categories: Love

Do We Need a Prenup? 7 Questions You Should Ask Yourself

Written by on November 23, 2011 · 23 Comments

Do we need a prenup?

Kevin at Thousandaire would say yes! (and in video form, too). Before I actually got engaged, I was a big proponent of prenuptial agreements. Throughout my childhood and teens, I’ve witnessed some rather unhappy marriages (fortunately, not my parents’). So I was quite hung-ho on getting a prenup and defining the financial terms if my marriage were to end. Well, now I am engaged to the man I’ve known for 10+ years, a supporter, a friend, a confidant, a partner. We are getting married in 8 months. Drafting an enforceable prenuptial agreement in California will cost thousands of dollars even for just-starting-out folks like us. Suddenly the issue is less theoretical and more practical. I still think that a prenup is important for many people with more assets, but we aren’t rich. In fact, we are going to be broke grad school students pretty soon. So, is a prenup for us?

7 questions to ask when you ask yourself “Do we need a prenup?”:

  • What does your state law say (and do you agree with it)? In 41 states, assets are split via “equitable distribution.” In 9 community property states (California included), everything acquired during the marriage is automatically split 50/50 if the marriage ends.
  • Do you have substantial assets or expect to come into substantial assets in the future? Bottom line, I don’t think we’re rich enough for a prenup. No millions in the bank, no ownership in businesses, no stock options at hot startups. Our career salary trajectories are roughly similar, and while I make more money now, either one of us has the potential to out-earn the other in the future.
  • Do you agree with splitting assets acquired during marriage 50/50 if you split up? Both of us agree that all assets we acquire during the course of the marriage – outside of inheritance – should be split 50/50 if we were to get divorced. I am more likely to receive an inheritance in the future. If I were to receive an inheritance, however, it would likely be structured in a trust and so would remain separate, not community, property. A prenup can reaffirm that separation, but it’s not critical.
  • Do you have similar levels of debt? We are coming in with roughly equal amounts of student loans.
  • Do you have children? Is this your second or third marriage? This doesn’t apply to us, but I’ve read that a prenup is exceedingly helpful for protecting the interests of children in a remarriage.
  • Do you want to have provisions where assets distributions are used to punish infidelity? If you want to make sure that your spouse’s share goes from 50% to 10% (or 0%), if he/she cheats, then a prenup is necessary. Cheating is so prevalent nowadays that courts don’t really look upon that as a consideration in terms of determining asset splits. Be sure to define what constitutes infidelity and what level of evidence is necessary. That must be a fun conversation.
  • Do you plan to have one person stay at home with the kids? Do you want to figure out the terms of alimony? Some people say that if one person leaves the workforce to take care of kids at home, it’s best not to have a prenup or to have a prenup that says assets will be split 50/50 (to protect the interest of the stay-at-home parent).

Our decision

The bottom line for us is, for the duration of the marriage -which is hopefully forever- we see whatever money we make as “our” money, no matter if he makes more or I make more. Furthermore, I cannot imagine CB behaving in an dishonorable manner.  I’d like to think I would never behave that way either. I love him for his humor, his good looks, his kindness and quirks. But almost above all I love him for his character – he would have to become a whole different person for him to become bitter and spiteful. (Though of course, the nature of divorce means that people have changed, and often into someone unrecognizable to the other).

So, I don’t think we are going to get a prenup. Given all of the above considerations, I’d probably take the money we would have spent on a prenup and spend it on a big vacation instead! I hope our marriages lasts and lasts until one of us is called to the Big Gathering Place In The Sky. But baring that, I trust that we will both try our hardest to remain civil and amicable even if we were to separate. I believe we will be good partners to each other, and if we fail at that, I believe we can be good ex-spouses. It’s probably not a terribly romantic way of arriving at what is the “more-romantic” decision to not have a prenup, but it works for us.

Would you sign a prenup? I’d love to hear from anyone who has gotten a prenup or who has considered one, especially if you don’t have millions in the bank!

Categories: Life, Love - Tags:

Blogging About Personal Finance When You Are Married

Written by on October 10, 2011 · 20 Comments

In 8 months, I’ll be tying the knot. Jumping the broom. Getting hitched. Taking the plunge.

Getting married changes many things. For example, once CB and I get married, I will be able to (1) file taxes jointly, (2) make healthcare decisions for him if he should become incapacitated, and (3) invoke my spousal privilege to prevent CB from testifying against me in court. Aside from these new rights and responsibilities, getting married may also change the way I blog about personal finance. I am debating how to continue talking about personal finances in a meaningful way while respecting my future husband’s privacy and his level of comfort with putting our financial information online.

I’ve been writing WellHeeledBlog.com since 2006 – wow, it HAS been five years already! I have been in a committed relationship all through that period, but as a single gal my money has always been mine. I was only responsible for my own income, expenses, debts, and financial goals. Apparently, now that I am getting married, I cannot think of just myself any longer. It’s going to be our money, our expenses, our debts, our financial goals. Even though we will likely keep our individual accounts, California is a community property state. Thus, everything earned, incurred, and saved during a marriage is divided 50/50, with a few exceptions, no matter what name’s on the account.

So, how will getting married affect my blogging? Here are a few ways I can go about it:

  • Stop blogging entirely. Now, CB actually thinks it’s pretty cool that I blog (and that I actually make a little bit of money – which then goes into our joint travel funds!). In fact, he has helped me run backups and troubleshoot when I needed it. But I imagine that there must have been spouses of personal finance bloggers -or really, any type of blogger- who are not comfortable with them putting information online. How to respond in this situation? Whose opinion take precedence? Does the person with the stronger opinion get his/her way?
  • I can go on blogging about only my income, expenses and goals, as I have been doing right now. CB and his finances will remain in the shadows. Pro: I get to keep on blogging as I always have been while respecting CB’s privacy. Con: all the blogging inspiration from our newly created household – wasted! This might be a fair compromise if CB isn’t comfortable with me sharing his finances, but…
  • Ideally, I’d like to blog about our money as a joint entity. Pro: I would be talking about the full picture of our household, while our individual incomes would remain private. Part of the reason why I blog is to keep myself accountable and keep track of progress towards financial goals, so it makes sense that it should reflect an accounting of our resources and goals. Con: CB becomes so interested in personal finance blogging that he builds a rival site, stops taking me out to eat, and forbids me from buying dresses can’t think of any.

Well, I guess you know what direction I’m leaning towards. icon smile Blogging About Personal Finance When You Are Married We are going to talk about this and hopefully he won’t object to the last and best option.

Other married or bloggers in committed relationships, how did you tackle this topic? Do you blog about your money or do you blog about your combined finances? And here’s the big question: would you stop blogging if your partner asked you to?

Business Insurance Experts Premierline Direct

Categories: Blogging, Love

How Engagement Changed Our Finances

Written by on September 5, 2011 · 13 Comments

Engagement is that strange, twilight period where you are still single in the eyes of the law, but that you have made promises to each other to become something more – a legally sanctioned partnership with all the rights and obligations accorded to you by the state. I am not sure how much impact an engagement has on most couples’ finances, but even though CB and I won’t be getting married until next June, the act of getting engaged, I feel, have already changed the way we look at our finances:

  • I usually carry a small life insurance policy provided through my employer. In years past, I have always designated my mom as my beneficiary. During the most recent open enrollment, however, I put down CB’s name. I don’t know when CB started putting my name down as his beneficiary, but that apparently happened before my enrollment period.
  • CB has a few thousand dollars in student loans from undergraduate years. I feel much more motivated now to figure out how we can pay off this debt before we go to graduate school, even though it’s not technically my loan. I know that whatever debt we have, even though they are individual loans, will affect our financial resources as a couple.
  • We have stopped keeping very close track of who pays for what or how proportionally split our expenditures are. If I feel that he has been picking up a lot of the tabs lately, I’ll pay for our flights for a get away or the next Costco run.
  • I’ve never thought I’d want a 100% combined finances set-up, but I am beginning to change my mind. The sense of partnership – of being in this together, with someone whom you do not have to calculate with or account for – is very appealing indeed. So I suppose being engaged, and really appreciating the feeling of shared resources, shared opportunities, shared goals makes me seriously think about combining finances once we are married.

Has engagement changed (or do you think it will change) your finances and attitudes toward shared finances?

Categories: Goals, Love, Spending

Wedding Planning – Expenses So Far

Written by on August 26, 2011 · 22 Comments

After finally settling on a wedding date in June 2012 and deciding on a small wedding with a guest list of 30 or so, I started signing contracts and putting down deposits. Here are the costs so far:

Ceremony site: $240.

We are getting married in a public building. Because all the venue has incredible architectural details and built-in seating, we don’t need any decorations or chair rentals. In fact, we might even get some of this money back if we leave the site in good condition. I have wanted to get married at this place even before I got engaged, and may have even looked up how much it would cost.

Photography (50% deposit): $425.

I actually found my photographer via an ad I posted on Craigslist. We loved her portfolio, had a great Skype meeting with her, and booked her for 4 hours. She recently started doing wedding photography full-time and has a beautiful blend of photojournalistic and portrait pictures. This lady is going jump out of our price range very soon, if she hasn’t already. I know it can be hit or miss finding someone on Craigslist, but I wouldn’t have booked her if I didn’t do my due diligence, so I am hopeful that things go well.

Wedding dress: $66 including tax!

While I was wandering around a Nordstrom Rack 10 minutes before closing, I spied a long column of ivory lace. It was a completely spur of the moment purchase, but when I tried it on at home, I saw that it fits really well. It satisfies all of my criteria: it’s lace, it’s budget-friendly (all right, downright cheap!), and, if I may say so myself, it’s quite flattering. This material is also light weight, which was important to me because I want to be able to navigate easily from my seat to the cake table. icon smile Wedding Planning Expenses So Far

Restaurant reception deposit: $500.

This fee is applicable towards the price of food and drinks at the reception. It’s a quaint French place, and normally those places aren’t exactly to CB’s taste, but he really liked the meal we had here so we booked as well. I was won over when I saw coq au vin on the menu.

Running total: $1,231

Now that all the important vendors and sites have been secured, and I have a rough budget in mind (under $6,000), I am feeling so much better about this whole process. I can tell that we’ve underestimated certain items – $1,200 for food and drinks won’t cut it, but we are saving on other things so I hope it will all balance out. Sometimes, I find my attention drifting towards what type of flowers I’d like have to what cakes we are going to bring for the dessert table. So, I suppose, wedding planning can be (kind of) fun.

Categories: Budget, Life, Love - Tags:

Gold Makes a Marriage?

Written by on May 31, 2011 · 9 Comments

Last week, CB’s mom very nicely put together a little relaxing kit for me and included a copy of Martha Stewart Weddings. Inside I saw a full-page ad sponsored by the World Gold Council that says:

Gold Makes a Marriage. Honor your love with the metal that’s meant marriage since marriage began.

gold ring 300x225 Gold Makes a Marriage?Immediately I thought of the fact that we will not be having gold wedding bands for our marriage. In fact, our budget means that our rings, for now, will likely be stainless steel (CB thinks I’m half-joking… but… I’m not).

I am obviously not against precious metals, as I have a platinum engagement ring. I am also not offended or outraged, because it’s just an advertisement, and because many other materials (among them, diamonds, white dresses, flowers, cakes, etc.) have come to be advertised as the symbol of love, marriage, destiny, forevermore amen.

But the first thing I thought when I saw the advertisement was that marriage started as an socio-economic contract (and in many ways one can argue it retains those characteristics), and that gold was a very important aspect of a marriage. It had less to do with honoring one’s “love” and everything to do with securing a dowry or melding two family’s fortunes.

I don’t know if gold makes a marriage, but gold has certainly made marriages.

Image credit: Alexandre Breveglieri via Flickr

Categories: Love

The Engagement Ring: Do you know how much he spent?

Written by on April 28, 2011 · 82 Comments

CB and I are pretty open about our finances. We share our goals and make saving a big priority. I have learned, however, that openness has a limit – CB absolutely refuses to tell me how much he spent on my engagement ring.

ring 21 300x227 The Engagement Ring: Do you know how much he spent?Okay one more ring shot! (I actually can’t wear the ring yet because it has to be resized and insured. So please indulge me my pictures.)

On the one hand, I’m really curious – and a little scared – of how much he spent. On the other hand, I am also relieved because I can just go on enjoying my beautiful ring without feeling like we should have saved the money for something else.

Here’s what I do know: CB got the ring at Costco – woohoo! – and that the price fit into his budget and he paid for the ring with cash. That makes me happy. He drove to Costcos all over town trying to find something that he knew I’d like but that he also found pretty (I wouldn’t say that we have the exact same taste when it comes to rings). The fact that he put so much time and energy into picking out a ring that I love, all by himself, makes me very happy.

I’ve talked about my interest in nontraditional engagement rings. I had thought that we were picking out my ring together, so when I was looking at rings I concentrated on mostly moissanite and gemstone rings under the $1,000 mark.

So, I feel a little guilty about the money. But call me a hypocrite because, well, I adore my very traditional diamond engagement ring. I love the bezel setting. The milligrain edging. The pave diamonds. I’ve never worn a diamond before, and wow, does it sparkle. In fact, I love this ring so much that I have decided I will keep it as my only ring. It can double as my wedding band. Plus, no need to buy an additional ring.

Ladies, do you know how much your ring cost? Do you WANT to know? Also, does anyone wear only their engagement ring, no wedding band?

Categories: Love, Luxury, Spending - Tags:

Smiles

Written by on April 26, 2011 · 68 Comments

I just had one of those really really fun and happy weekends. CB and I went for a little getaway in lovely San Diego (aka future retirement site). We booked ourselves a room at a bed & breakfast housed in a wonderfully restored 19th century Victoria mansion.

BrittScrippsInnJLK 209x300 SmilesThen we spent the day at the Balboa Park, where we went to see the All That Glitters jewelry exhibition at the Natural History Museum. Did you know that California’s state gem is the benitoite? It is a rare blue gemstone that is only found in San Benito County, CA.

Benitoite Butterfly 300x200 Smiles

The next morning CB and I woke up early, watched a few episodes of HGTV from our bed, then sauntered downstairs to the dining room. We were served a delicious breakfast of tea, scones, poached eggs, and bacon (I know, my detox? so NOT going well). Then CB suggested we take a walk around the small garden out back.

BrittScrippsBreakfast 242x300 Smiles

We walked around for a bit. Then CB told me to walk up the stairs to go inside. When I turned around, CB was on one knee, holding up something shiny. He asked, and I said YES! We hugged and he made me say yes again before he gave me the engagement ring. He said he wanted to hear me say yes one more time. engagement ring 300x187 Smiles

Categories: Love

Coupled Up = Money in the Bank

Written by on April 18, 2011 · 13 Comments

Are there financial benefits to being in a relationship?

swan couple 300x193 Coupled Up = Money in the BankGlobe and Mail recently came out with an article about the true cost of being a singleton. (By the way, I just recently discovered Globe and Mail. I love it!). It seems a little unfair to me how the world is structured for couples, but I will take my breaks where ever I can get them.

I do think there is a slight distinction in between in a relationship and living together vs. being in a relationship and living apart. Most of the benefits accrued to coupled people are because they live together, in fact, as anyone in a long-distance relationship will tell you, being in love and apart can get expensive, fast.

Since CB and I started living together, here are the few ways that our relationship has saved me money.

Living expenses

In the few years since I graduated college, I have gone through several living arrangements. I’ve lived with a roommate, lived by myself, and now am sharing an apartment with a significant other. Living with CB means that we can split the groceries, DSL, utilities, and rent. I am paying about $300 less than I would be if I were to live alone. The biggest benefit I see to cohabitation is the fact that two married / partnered people can live in a studio or one-bedroom apartment, an arrangement that wouldn’t be possible with roommates. A one-bedroom apartment is quite a bit cheaper than a two-bedroom. There’s also the sharing of resources that occurs: two people living together don’t need two separate internet connections or Netflix accounts or cable subscriptions.

We made the decision to live together because it made sense for our relationship (I think most people would agree that moving in solely for financial reasons isn’t the best idea), but it’s a big perk that living together is so good for our budgets.

Travel

One of the best things about coupling up, I think, is that you will always have a good travel buddy. Given how busy everyone is, I have a hard enough time scheduling dinners with my friends. It’d be 1000x more difficult to plan a big, expensive trip that matches everyone’s tastes and schedules (I am still a little sad that our girls’ cruise 2009 never happened). I can travel alone, but I’m the kind of person where I’d have much more fun and I’d feel safer if I am going with someone else. Plus, if I go on a big trip by myself, it would be very, very expensive.

The dreaded single supplement is alive and well. Most travel prices are quoted with double occupancy, which means that if I were to go alone, my best choices are to hope for a good roommate or to fork over the extra dough for a private room. The Galapagos cruise we are saving up for, for example, costs around $4,000-$5,000 per person. A single supplement would add another $1,000 to the total price.

Food

I actually am not sure if I am saving money in this regard, but if I cook more, I can buy in bulk. It doesn’t cost double the price to cook for two people than it does for one. I will admit that being in a relationship has prompted me to eat out more though – there’s always a willing dining buddy in CB!

Personal Care & Grooming

A few months ago I wrote about a lady who spends $10,000+ a year on dating and related purchases. So I don’t have that pressure of looking fabulous every single minute of every day – which I take advantage of, liberally (sorry CB!). Still, I’m pretty sure that my personal care and grooming expenses are what they would be if I were single. Most of the “beautifying” things I do (facials, pretty dresses, lipstick) are for myself – because, well, I want to look good! And this might not be politic to admit, but I hope CB never thinks I’ve “let myself go,” so I try to do what I can to look moderately attractive for us both. At least a few days a week!

But I don’t spend $10K on dating activities when I’m coupled, and I don’t foresee increasing my “dating budget” much even if I were single (although, to be honest, I would probably spring for an online dating membership).

Gifts

This is an area where being in a relationship definitely costs couples more. Birthdays, Valentine’s Day, anniversaries, etc., all these holidays and “milestone” occasions add up, also, don’t forget the “just because” gifts that can add to the relationship goodwill. But, in the case of giving gifts to a 3rd party, I suppose couples have the opportunity to go dutch on a gift, effectively splitting the cost in half.

Do you think it’s cheaper being a couple than being single? Any other costs or perks that I’ve overlooked?

Photo credit: Miss Claeson via Flickr

Categories: Life, Love, Spending - Tags:

Help Your Significant Other Save for Retirement

Written by on March 18, 2011 · 19 Comments

Help Your Significant Other Save for RetirementOne of the things about good relationships, I think, is that each partner help the other become a better person. Well, not to toot my own horn, but I think I’ve done my part when it comes to CB and personal finance. icon wink Help Your Significant Other Save for Retirement

CB isn’t as nerdy as I am when it comes to money management, but I’d like to think that I’ve nudged him towards the JOY and EXCITEMENT of saving for retirement. He first started a Roth IRA in 2009, and today he just put in the full $5,000 for 2010 (you have until the tax filing deadline – April 18, 2011 – to contribute to the Roth IRA for 2010).

I am so proud of him. CB is only in his mid-20s and he has already maxed out the Roth IRA for 2 years. Plus, his work has a very generous employer’s contribution, so with all of his retirement savings – Roth IRA, 401K, employer contribution – he is saving around 25% of his gross income towards retirement. How awesome is that?

Neither of us are out-of-control spenders or carry heavy debt load, so it wasn’t too hard to get the retirement-saving train rolling.

Here is how I helped my partner start saving for retirement:

  • Talked about why saving for retirement early is so important. The power of compound interest, y’all! “The old CB will thank you,” is what I always say.
  • Shared with him both my insecurities and goals – I do NOT want to spend my old age in poverty (I DO want to retire in sunny San Diego and have brunch every day), so it’s important to me that CB starts saving as well. Because if we stay together for the long haul (which is the plan), his financial well-being is mine and my financial well-being is his. By saving for retirement, he is honoring my priorities and showing me that he is committed to our mutual goals.
  • Gave him information on the logistics of opening up an account online, and helped him decide on an asset allocation that fits his goals and risk tolerance.
  • Encouraged him to sign up for a 401K in addition to the Roth IRA.
  • Told him he should put the money into retirement accounts instead of spending on Valentine’s Day (he still gave me a wonderful Valentine’s day, though, with a lovely bouquet of roses and lilies delivered to my office. So, I’m not sure that he listened to my advice… but I loved it!).

Personal finance is sexy. Now go and encourage your significant others to get a piece of the (retirement) action.

Have you successfully nudged (or been nudged) towards better personal finances by your partner/significant other?

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Well Heeled Blog in the blogosphere:

Thanks to Magical Penny for hosting the Carnival of Personal Finance: International Pi Day Edition and for selecting my post on Mental Accounting as an Editor’s Pick! Also, Dr. Dean at Millionaire Nurse hosted the Yakezie Carnival: Spring Training Edition and featured my post on Starbucks Rewards Card.

Photo credit: matthew_hull from morguefile.com

 

Categories: Behavior, Love, Retirement, Saving - Tags:

My Advice to a Future Stay-At-Home Parent

Written by on February 16, 2011 · 14 Comments

A reader asked me what advice I would have if she wanted to stay home after she has children. The whole working-parent vs. non-wage-earning-but-still-working parent can be a touchy subject, and there is a potential for misunderstanding and hurt feelings on both side of the debate. But I think it’s GREAT that this reader is thinking ahead and trying to make a plan to minimize her risk and give her plan the best possible chance of success.

Given that I am not a mother and that I don’t personally know any stay-at-home parents, I am not quite sure I am qualified to give advice (I just want to be a guiltless mom). So I decided to make my answer into a post, and get all of your feedback on what advice you would have for someone who wants to become a stay-at-home parent. If I have any stay-at-home mom’s or dad’s out there, please chime in!

1. Make sure that your position at home is equally respected as that of an outside wage earner

The decision for one person to stay home requires sacrifices from (and of course, brings rewards to) everyone. So it’s a decision that needs buy-in from both partners. There has to be mutual respect for the different but equally-important roles that both partners play. There is nothing like resentment and money to eat away at even the strongest relationships. And unfortunately, the  stay-at-home partner’s financial situation tends to be more precarious if the relationship fails (unless, of course, the SAH parent has independent financial resources).

2. Live on partner’s income and save your income for 6 months (ideally 12 months)

I am ONE person living on one income and even I find it hard sometimes! Okay, all kidding aside, I can only imagine how difficult it would be to have a family -especially a large family- and live on one income. Before you take that big step, make sure you understand what you would have to do to make it possible. Plus, the 6-months or 12-months of saving 1 salary will result in a nice emergency fund when you do make the transition from paid work to just plain work.

3. Make a plan to stay engaged in the workforce

I think the time of when someone (historically a woman) who leaves the workforce permanently at age 30 to raise a family is probably over. Some people step out of the workforce for 5 years, some for 10, some for 15. But at some point, most stay-at-home parents will have to seek paid work again because of financial reasons or because their children are grown and they want to reenter the workplace. It’s important to stay engaged in the workforce by maintaining your network of professional contacts (alumni associations, volunteer organizations, professional groups), perhaps doing some consulting or freelance work, or taking on some pro bono work. Keep an updated resume and be sure to take some time to go out for informational interviews to keep your toes in the market.

4. Spousal IRAs: Insist on them so you don’t neglect your own retirement

A stay-at-home mom or dad’s ability to contribute to tax-advantaged retirement funds are drastically diminished (unless you have self-employment income, but then in which case you wouldn’t be a non-wage-earning spouse).

One way the IRS allows spouses to save for retirement is with the existence of Spousal IRAs. A Spousal IRA allows a stay-at-home spouse contribute the full amount ($5,000 or $6,000 for those older than 50) in a year as long as their spouse earns enough to cover that contribution. The money in a Spousal IRA belongs to the stay-at-home spouse and can be an important way to save for retirement. This is so important, in fact, I will advocate that the Spousal IRA should be funded as a first priority after saving enough for the employer 401K match.

If you are a stay-at-home partner, insist on Spousal IRAs.

Note 1: Even though traditionally the stay-at-home parent has been a mother, I tried to make this post gender-neutral, because I think these are things that both men and women should think about before they decide to step out of the workforce, and because I don’t think there is any reason why one partner should be automatically viewed as the stay-at-home parent just because of the gender.

Note 2: I realize that I have used the terms “stay-at-home” and “non-wage-earning” interchangeably. They are obviously not the same thing as many people work from home full-time or part-time. However, in general I take the term “stay-at-home” to mean a parent/spouse whose primary responsibilities are to run the household / take care of children and has little or no responsibility for generating income. I wouldn’t think of a consultant who works 60 hours a week from home as a “stay-at-home” parent, even though she may be technically “at home.”

What advice do you have for a stay-at-home mom/dad? If you are planning to stay at home, what steps are you taking right now?

Categories: Life, Love, Work

Yours, Mine, Ours: Money in Marriage

Written by on February 4, 2011 · 3 Comments

Jessica Grose of Slate just published a great 5-part series on How Couples Manage Their Money. Jessica, a newlywed who has been with her husband for 4 years previous to tying the knot, is wondering if, how, and when she and her husband should merge finances.

She interviewed couples from across the country, read up on the historical and sociological sources, and tried to figure out a way that’s right for her personal situation.

Part 1: Our Newlywed Money Dilemma
Part 2: Common Potters (“combine everything”)
Part 3: Sometimes Sharers (“a combination of joint and individual accounts”)
Part 4: Independent Operators (“strict financial separation”)
Part 5: What We Decided

Hopefully I am not spoiling it for anyone when I reveal that Jessica and Mike (her husband) ultimately decided to go the Sometimes Sharer route:

For the month of January, Mike and I have been keeping track of our individual spending. He’s been tallying his expenses on an Excel sheet. I have an account at the personal-finance Web site Mint.com. We’ll have a reckoning about what constitutes a joint expense and come up with a figure that should cover these expenses. Then we’ll each contribute 50 percent of that figure. For now, we will put the remainder of our salaries into our existing individual accounts and keep our savings separate. I’ll publish a follow-up next month with all the nitty-gritty.

There are benefits and deficiencies to each of the three major ways of handling money within a marriage (alas, I haven’t seen a perfect system yet), but maybe I can cobble together the perfect system for us.

Right now CB and I are Independent Operators, which I believe is the right course of action for the vast majority of unmarried couples. I don’t foresee us continuing as Independent Operators after we marry. After we make it legal, this is how I might approach the question of money in marriage: prenuptial agreement before the marriage, a common pot after. This, I think, captures the best of both worlds: protecting yourself and each other in a fair and rational manner for just-in-case, but committing to joint financial goals while you are in the marriage -which hopefully lasts forever, of course.

I like the idea of joint goals for investments and big-ticket items, and I don’t want to be a couple that squabble over who bought the milk last week vs. this week. The biggest benefit of having a common pot, I think, is the retirement factor. Am I really going to feel secure when I’m 60 if I have $3 million stashed but CB’s pot is only $300K (or vice versa)? Doesn’t that mean, for all intents and purposes, that we have a joint retirement kitty of $3.3 million? After all, I want us to jet around the world together, and not have one partner wait at home while the other traverse the Italian Riviera alone.

Just curious, has anyone gone the prenup + common potter approach?

Categories: Articles, Love, Retirement - Tags:

Fabulous Weddings for MUCH LESS Than $10,000? 4 Examples Of How It’s Possible

Written by on January 15, 2011 · 3 Comments

When my boyfriend and I first started talking about weddings, we were both relieved to find out that our expectations are, well, quite low achievable. Last night, CB mentioned to me that he’d rather have a small wedding and spend most of our money on traveling. “Is that okay?” he asked. “That is (absolutely and fantastically) okay,” I replied.  I am glad that we are in sync on this, at least on the big-picture stuff. (But seriously, if he doesn’t ask me to marry him, I am going to stop talking to him about weddings!)

We will figure out a budget when we come to that point, but I know neither of us want to go into debt for the wedding. Not only that, I don’t even think we want to spend a lot of money on it. Of course, “a lot of money” is subjective in wedding parlance.

The average wedding in the U.S. costs around $20,000-$30,000,

according to the various reports and websites that I’ve came upon. See Cost of a Wedding, The Knot, WE TV’s Wedding Report for more information. If you want to have a traditional wedding with a sit-down dinner, dancing, live music, etc., at an in-demand venue in a big city, then the costs can go up even higher.

Fortunately, the web provides much inspiration for more budget-friendly events. After just a quick google, I found many blogs that talk about keeping the wedding budget under $10,000. That’s quite an achievement, especially in metropolitan areas, but what if I can keep that budget solidly in the four-figure range? I found a few bloggers who talked about how to throw lovely, memorable affairs for around $5,000 or $6,000! Granted, a few of these posts are several years old, so of course $5K in 2005 isn’t the same as $5K in 2011, but the philosophy and the guidelines still ring true.

Fabulous Weddings For Under $6,000

Friday Night Cocktail Wedding for just $5,000 – Canada, 2009

Jen, Monica, G and myself went to some local flower shops the morning of our wedding and bought what we needed. I deliberately didn’t have a set flower in mind, so that I wouldn’t end up making an emotional decision to get overpriced flowers- I opted for whatever looked good, fit the scheme, and was well priced. We brought them to my kitchen and put together our bouquets and all the center pieces. Both Jen and Monica each carried a single stunning hydrangea bloom- it was perfect. Flowers are way easier than any florist will ever let on.

Doing a $4,722 Wedding in Style (and They Had a Violinist!) – Brooklyn, 2008

Out of curiosity, I went to the Filene’s Basement‘s chaotic “Running of the Brides” sale, but none of the countless dresses tempted me to part with $250. It was a deal for some, but more than I wanted to spend. So I did the next best thing – I checked eBay. And there it was, a simple yet elegant, sleeveless, satiny, ivory sheath with only one bidder and 40 minutes left on the auction. I won the dress for $27. The seller said she’d purchased it from Saks‘ Off 5th outlet but didn’t lose weight in time for her wedding. Fortunately, her diet disaster was my happy ending.

Man Plans $6,000 Wedding for Friend, Including Night at Mandarin Oriental – Manhattan, 2005

Restaurants in Manhattan spend way too much time competing with each other. The mistake that most couples make is going for the popular places that are listed on registries like The Knot. The key is to find an accommodating restaurant, offer them the chance to attract forty new clients with their food, and negotiate something that doesn’t affect their daily business. Incremental business is always welcome at these smaller restaurants. Their average margins are in the low single digits, and cash-flow is king.

Grad Student Throws $6,000 Wedding and Pays for Bridesmaids’ Dresses – Atlanta, 2008

I was able to get my photographer and deejay for free. I found the photographer, another graduate student, on Craigslist.com. He was trying to get his name out as a wedding photographer. Our engagement and wedding pictures were free. The deejay was the boyfriend of a friend and he was also trying to get into weddings. A lot of people don’t realize that most vendors will work for free when they’re just starting out as long as they’re able to reference you. A friend of mine is a makeup artist and she did my makeup for free that day as my wedding present.

If you are a bride- or groom-to-be who is looking to keep your special day in the four-figure range, you will love the stories I linked to. Read and be inspired! Edit: Girl with a Red Balloon pulled off a fun, festive wedding for under $10,000, in less than a MONTH!

On that note, can I confess to you, my dear readers, that one of the reasons why I want to get engaged is so I can finally start blogging about a wedding budget? I am not sure if that makes me a particularly dedicated personal finance blogger or just really strange. Of course I also want to marry the man I love, make a commitment, build our lives together, etc. But the wedding budget? The allure is immense.

If CB ever reads this, I hope he is not freaked out.

Categories: Budget, Love - Tags: ,

Diamond Ring Spammers

Written by on January 12, 2011 · 13 Comments

My musings on nontraditional / non-diamond engagement rings got many comments from ladies who have gorgeous rings that were meaningful, a little unusual, or budget-conscious (or all of the above!). A few gents also chimed in. Thank you so much for offering your thoughts.

I also got a few spam comments about rings, including one from an UK diamond store that I found hilarious. I guess my post is keyword rich in “diamond” and “engagement rings”! icon smile Diamond Ring Spammers

If you are searching gift for presenting on the day of engagement, then no gift would be better engagement rings so present a attractive and alluring diamond engagement to impress your beloved

Here is something interesting about engagement rings (diamond or otherwise): an engagement is a conditional gift, which means that if the engagement is broken, the ring’s ownership reverts back to the buyer – in most cases it would be to the gentleman. It doesn’t matter who was at fault for breaking up the engagement. If, however, an engagement ring is given on a nationally-recognized holiday (Christmas, Valentine’s Day), or the recipient’s birthday, then an argument can be made that the ring is a gift and not a conditional gift.

So.. forewarned is forearmed! Don’t ask on a holiday if you worry about rings / ownership / broken engagements.

Categories: Gifts, Love

Non-Traditional Engagement Rings

Written by on January 8, 2011 · 77 Comments

Nope, I’m not engaged! But I will be.. sometime. icon wink Non Traditional Engagement Rings When we do get engaged, we will be picking out the ring together. Like many women, I always thought of a colorless diamond solitaire as THE default / traditional engagement ring.

I’ve mentioned before that I’d rather have a great trip than an engagement ring. Then my friends started getting engaged (one in particular has an especially gorgeous ring!) and I was surrounded by diamonds. What’s wrong with having a great trip AND a ring, right? In a moment of bling-induced weakness, I told CB that, er, perhaps I DO want a diamond. I believe my exact words were: “I know I am a sucker for all the marketing, but they are so shiny…”

Say what you will about the diamond industry and its many problems (and let’s be honest, I don’t think mining for any type of gemstone is sunshine and roses), DeBeers is a branding genius and market maker and credit must be given where credit is due. Diamonds are fiery, precious, and hard enough for every day wear, and just beautiful from an aesthetic perspective.

Upon closer reflection, however, I realized that while I like and appreciate diamonds, I just don’t want a diamond enough to spend $5,000 or $6,000 it will take to get something that we like or to spend $1,000 and get a diamond of lower quality. A little voice inside me says, “$6,000 amortized over 50 years of marriage (optimistic one, aren’t I?) will be just a little more than $100 a year! So if you really want a diamond, go for it.” Then another little voice chimes in, “but do you really, really truly deeply do want a diamond?”

Once I started to move beyond the “diamond = engagement ring” paradigm, I started thinking about something a little bit more nontraditional. For example, how about something colored AND not a diamond? When I was growing up, ruby was my favorite gemstone. Red is my favorite color, and is, conveniently for me, also the color associated with love. When started googling ruby rings. I’ve found a picture of the ring I really like (see above): a large ruby surrounded by a halo of smaller diamonds. Best part is, many gemstones can be created in labs, which means they are cheaper than mined stones and free from the ethical issues that might arise with mining.

I am not 100% confident, but it’s looking more and more likely that I will be sporting a nontraditional engagement ring.

Do any of you have a nontraditional engagement ring? (i.e, a color gemstone or a non-diamond engagement ring?) How did you come to that decision? Have you regretted not getting a diamond?

Categories: Love, Luxury

The $10,000 Dating Budget

Written by on November 4, 2010 · 20 Comments

Love don’t cost a thing, but dating is another story.

Do you spend less money when you are in a relationship? Do you spend more money on grooming, apparel, and eating out when you are single / casually dating? These are the questions that come to mind after I read The Economics of Serial Dating: A Case Study. It’s a fascinating article about one New York City woman’s dating budget for the year. The article opens with a pithy introduction:

Meet Anna. She spend $5,468 a year on dating, before she even leaves the house.

economicsofdating The $10,000 Dating Budget

As the graphic shows, Anna’s total cost is even higher, at over $9,000 once the costs of taxi rides, professional photos, online dating memberships, clothing, shoes, dry-cleaning, personal grooming, and other costs are tallied up.

Given that my dates with my boyfriend generally revolve around In-N-Out (oh delicious burger) and that the most expensive piece of clothing I purchased with a date in mind was my $80 prom dress, I never realized how expensive dating can be. On the other hand, plenty of people date, and I can’t imagine most people spending almost $10,000 a year on this pursuit of Mr./Mrs. Right or their less attractive alternative, Mr./Mrs. Right Now. Or perhaps I have an unrealistically low budget for dating. Besides, I am sure the clients of Millionaire Matchmaker spend several hundred thousands, if not more, on their love-story-in-the-making.

Cost of Social Life vs. Cost of Dating

One thing I noticed is that most of Anna’s costs are the costs of having an active social life, not exclusively the costs of an active dating life. Going out every night and taking taxis are expensive, regardless of whether you do it with your friends or a date. The beauty products that Anna uses are also for her personal use, I’d argue.

I have spent some pretty penny on beauty treatments in the past – a $250 hair straight perm, a $80 facial, etc. But I wouldn’t attribute that to a cost I had to incur for my relationship. There are also many expenses (shoes, clothes) that Anna rolls into her “dating budget” but that are not really dating-exclusive purchases. Anna admits that she sometimes makes purchases that she may not have made without the specter of an upcoming date over her.

Still, it’s undeniable that there are very high social pressures for men and women – especially women, I might argue – to look good. Looking good doesn’t come without effort, or, most of the time, money.

So I am curious – How much do you spend on dating a year? Please tell us your demographic if possible (age range, location, gender).

source: bundle.com

Categories: Budget, Love

Coupons on a first date, yay or nay?

Written by on September 28, 2010 · 23 Comments

coupon10 300x300 Coupons on a first date, yay or nay?Even romance can’t escape the recession – lately, I’ve been seeing frugal dating tips everywhere. One thing I’ve read is to use a coupon on a first date.

I love eating out, I love good food, and if I can do it for 10% or 20% or 50% off, all the power to me. CB and I have no qualms about busting out a restaurant.com coupon and enjoying a $60 meal for $40, or going to Restaurant Week, or ordering specials. But using coupons on the 293rd date is very different than doing so on a first date.

Using coupons on a first date, especially in a restaurant, a bit awkward to me. ChowHound had a very spirited debate on this matter, with the Yay-coupons coming slightly ahead of the Nay-coupons. I think I’d lean towards Nay to coupons on the first date, and this is why:

  • First date should be the time when you are extra careful to make sure the other person is comfortable. A coupon might give the appearance that someone picked the restaurant only because of the discount, and not because of its great lighting or special tapas or cool drinks menu. Even if that’s not the case (i.e. the asker has a coupon to a great restaurant that he/she already knows and loves), I’d much rather avoid the impression.
  • Most coupons require that you announce the fact that you have a coupon at the beginning of the meal. Some coupons are really hard to figure out. Buy 2 entrees and get an appetizer (but not entrees in the XYZ section) or spend $50 in these categories and get 20% off. The date might feel as if he (or she) must order in a certain way because of the coupon, and that’s not cool.
  • Some waitstaff are not as attentive when you mention that you have a coupon. It’s not right, of course, because people should tip on the original amount so the waiters who provide the same level of service should receive the same tip from a party using a coupon and a party that doesn’t. But I’ve gotten bad service just for only getting water and not the cocktail the waitress pushed, so.. imagine if I used a coupon. Again, having a snippy waiter is something to laugh about when you have been dating the other person for a while, but it can add to the stress on the first date.

The one thing that I don’t like is how using (or not) coupons is seen as an indication of character. For the purpose of simplicity I will make the very general assumption that men tend to ask ladies on dates and women tend to be asked (understanding that there are no hard-and-fast rules and that this gender dynamic rules out gays and lesbians).

In the ChowHound thread most of the comments either said that men who uses coupons are either financially responsible stewards of money or cheap stingy penny-pinchers. And that women who don’t like coupons are gold-diggers who are only out for a free meal ticket. I would never discount someone for using a coupon on a first date, but my personal preference is against it. But coupon is a coupon – you can’t extrapolate that one instance to make assumptions about a person’s whole financial outlook / money management skills (good or bad).

Instead of having my date use a coupon at a more expensive place on a first date, I would much rather have a first date at a cheap neighborhood place or a a taco truck. First dates don’t have to be expensive (seriously – my favorite taco joint sells $0.80 tacos – get 15 of them, grab a bottle of $6 Moscato, and take me on a picnic. I will swoon), but it should be comfortable for both people.

Coupons on first dates can bring mixed reactions, so I say it’s best to wait until the dating relationship is a little further along before those 2 for 1s and buy one get one 50% start coming out. Of course, if both people met on CouponCupid.com, then go forth and coupon!

So.. coupons on a first date. Yay or nay? I’d be very interested in hearing feedback from both guys and gals.

Categories: Food, Love, Spending

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