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Q&A with Manisha Thakor, Co-Author of Get Financially Naked, Part 3

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Welcome to Part 3 of the Q&A with Manisha Thakor, co-author with Sharon Kedar of the new book GET FINANCIALLY NAKED: how to talk money with your honey.

**Due to the length and detail of these answers, I’ll be breaking the Q&A into 5 parts, with 1 winner revealed at the end of each Q&A. Look for the subsequent parts to come in a few days. See here for Q&A Part 1 and Part 2.

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MommyMel – What is the best way to protect your finances before and after marriage if your significant other will bring debt or a bad credit history to the table?

Manisha – Before marriage – talk about it openly and honestly.  Share a list of what you each own, owe, and your credit scores. Talk about what behaviors led to the numbers being what they are and how you might want to change going forward. My personal advice – do not combine finances or loan each other money. Discuss when you get married whether who is responsible for paying down that debt.  There are no right or wrong answers.  Some couples will decide that once married all previous debt accrued is a joint problem and you’ll work on paying it off together.  Other couples (this would be my preference) would say what happened pre-marriage stays pre-marriage and each person takes responsibility for cleaning up their financial situation that occurred pre-marriage and everything post-marriage becomes a joint problems.

After marriage – If you’ve gotten financially naked before marriage, this part should be the easy bit.  You know what the problems are, you know who is responsible for what.  Now your goal is to make sure you both keep each other fully informed about the progress you are making on the game plan you’ve set.  Additionally, because life happens, if there are any slip up, that you both commit to telling each other asap.

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Psychsarah – How often do Manisha and Sharon suggest you re-jig things in your financial life with your partner? I find that we’ve had tons of conversations over the years, gotten things pretty much figured out, but then we fall back into habits and arguments every now and again. Is there a timeline for a financial relationship “re-assessment”?

Manisha – In GET FINANCIALLY NAKED, Sharon & I suggest you have a “re-evaluation” conversation once a year.  Personally, I recommend January as then you can do a full recap of the prior years income and spending along with a review of whether you met your savings goals and how your investments have done.  If you have a volatile or uncertain income stream (you work for yourself or on commission) I personally recommend doing this exercise twice a year, in January and June.

The similarities between getting financially fit and getting physically fit are striking – keeping it simple and actually doing it are the two turbo charging agreements.  So don’t beat yourself up for falling back in to old habits & arguments.  That’s just human nature.  The antidote is to set up a structure (family financial summits) once or twice a year to nudge you back on track.

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Paranoidasteroid – How can you create an environment where you can track your spending as a couple, but without making the other person feel like they have no privacy. This is especially important now that husband isn’t working. I don’t want to track everything he does, but I still want to track our money together.

Manisha – This is an increasingly familiar scenario – and let me start off by saying how great it is that you want to track your spending during this difficult time when one of you isn’t working.  Human nature urges us to put our heads in the sand and your desire to track your spending is so much healthier.

My suggestion would be to do broad dollar categories.  So at the end of each month, tally up how much money was spend via: (1) credit cards, (2) debit cards, (3) checks/ / auto bill pay, and (4) cash.  The you will have a sum total of your spending which you can compare to your household income.  If you are in the red, THEN you can go back in and investigate where you need to trim things back.

By tracking, for now, the aggregate flow of cash rather than the specific categories (food, transportation, housing, entertainment, etc) you can make sure you are not going in the red without making your hubby feel like he’s got a 24/7 reality TV camera aimed at his wallet.  Over the long run and when you are ready, however, I recommend going back and doing a traditional category style budget.

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Jenn @ Paying Myself - How do you strike the balance when you’re cohabitating and/or married between accepting help and fixing your own financial mistakes (e.g. my boyfriend and I moved in together in the spring, and he has offered to help pay off my credit card debt)? How can helping each other out with past debts affect a relationship and how do you prevent it from becoming a problem? Any other words of advice in such a situation?

Manisha – Wow to be honest, that’s a tough one.  It’s like being asked, “how many children should we have?”  The answer is so highly personal.  The best advice I can give is that if someone is offering this type of help it should be as a gift, not a loan.

Loans, love, and family tend to be a fairly toxic mix over the long run.  And if it makes the recipient feel in any way obligated or beholden to the other person, think long and hard before accepting.  This kind of offer is great if it comes from a place of unconditional love and a desire to put to rest past mistakes.  Where it can become tricky is if the motivation is to control, dominate, or enable bad financial behavior.  Only you will know which category the offer falls in.  Bottom line, as a couple, you want this kind of help to be something you BOTH feel great about.

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Karin - My significant other and I have been together for almost two decades, and have always contributed 50/50 to expenses, savings and asset purchases. But I’m planning to return to full-time study next year to train for a new career, so will be spending some time out of the workforce (and living off my savings). I’d like to ask him to contribute more to our living expenses while I have no income, but after so many years of self-sufficiency am uncomfortable about even raising the subject. How do you start such a conversation?

Manisha - I LOVE this question, thank you so much for raising it.  I’m seeing this situation happen a LOT.  I think the way you raise it is straight up – you both love each other and want the best for each other over the long run.  If what’s holding you back is feeling like asking for help would make you less independent – I’m here to tell you that asking to readdress the split of expenses so as to protect your hard earned savings is a POWERFUL act.

When I need to raise a tricky subject I remind myself of this wonderful quote, “Truth is the best antiseptic.”  Just speak from your heart, acknowledge that it’s hard for you to even bring up the subject, and then put out on the table the proposal that you makes your heart sing.  You two can discuss from there to find a solution that works best for both of you.  So please, please, please – summon your inner power person and raise this topic.  I’m rooting for you!

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The 3rd Winner of the Giveaway is Mrs. Smith! Congratulations. Please email me your name and mailing address to receive your prize.

Q&A with Manisha Thakor, Co-Author of Get Financially Naked, Part 2

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Welcome to Part 2 of the Q&A with Manisha Thakor, co-author with Sharon Kedar of the new book GET FINANCIALLY NAKED: how to talk money with your honey.

**Due to the length and detail of these answers, I’ll be breaking the Q&A into 4 parts, with 1 winner revealed at the end of each Q&A. Look for the subsequent parts to come in a few days. See here for Q&A Part 1.

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Red – How do you approach having serious financial discussions with a partner who is more concerned about “the now” than the future? My live-in boyfriend D is loathe to have financial discussions with me, though I have said many times that we should have a serious discussion about money and our goals.

When we have spoken (briefly) about opening savings accounts or retirement accounts, he says that planning for the future like that could be a waste of time. “What if you save up $50,000 and you die at 30?” is his common response.

I know other couples where one person has the responsibility of doing the saving while the other pays more living expenses to even things out, but I’d much rather know that we were both saving for retirement and putting money away for emergencies. How can I convince D that saving now will pay off later?

Manisha – Ahhh, welcome to the wonderful world of opposites attracting.  The root problem here is that you have a “future” orientation (as do I!) while your BF has a “now” orientation.  I suggest going to www.GetFinanciallyNaked.com and downloading two free exercises: (1) Your Money History, and (2) A Financial Compatibility Quiz.

The first will help each of you understand what is is in your life to date that drives your future/now orientation.  Understanding what’s at the root of that is a key step in finding common ground.  The quiz will help you see how you two compare on three metrics around money: knowledge, interest, and behavior.

Taken together (as we describe in our book, GET FINANCIALLY NAKED:  how to talk money with your honey) these two exercises can go a long way towards getting you both on the same page.

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SS4BC – How do you decide as a couple what an appropriate emergency fund is and who should contribute what % if the incomes aren’t equal?

Manisha – As a rough rule of thumb, 3 months is the minimum you’d want to aim for if both of you are working in steady, stable jobs.  If either of you is in an industry rife with downsizing, you want to increase that to 6 months.

As for how to contribute, I’d argue that you should do so proportionally to your income. So if your combined household income is $100,000 – and one makes $60,000 and the other makes $40,000, the person making $60,000 should contribute 60% of your monthly savings target and the other person would contribute 40%.

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SavingDiva - When do you think is the proper time to start a financial conversation with your significant other?

Manisha – My coauthor & I like to say… if you are willing to take your close off with each other one way, you should be willing to take your clothes off financially as well.  This doesn’t mean on the 3rd date but it does mean that when you think this person is someone you could see yourself in a long-term committed relationship with, it’s time to start the dialogue.

At a minimum, before you move in together or get married its a must to have this dialogue if you really want to invest in your long-term future together.

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MissAlphaWrites – How do you bring up bad credit history to a long-term boyfriend without scaring him off?

Manisha – Straight up.  Think about how David Letterman handled his “transgressions.”  That’s the role model I’d use.  State it honestly, head-on, and emphasize that the reason you are doing this is precisely because you want to have an open honest relationship.  Also discuss what you are doing to clean up your bad credit history so he can see that you are now on top of the issue.  One of the many great things about America… we love turnarounds icon smile Q&A with Manisha Thakor, Co Author of Get Financially Naked, Part 2

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InvestingNewbie - Is it appropriate to advise a significant other on their financial goals? If so, how can you do that without coming off as patronizing or not supportive?

Manisha - A good relationship is all about understanding what makes each other tick and learning to compromise so that each person can be as happy as possible.  As such, I’d say nope – not a great move to “advise” a significant other on their goals.

However, it is a GREAT idea to sit down once or twice a year and discuss together each of your personal goals and your goals for you two as a couple.  In the course of this mutual conversation it’s a great idea to ask for suggestions on how to improve your goals and to offer thoughts on how to help your significant other achieve theirs.

You may be thinking, “Manisha – that sounds like double speak!”  But the key is that by structuring the conversation as a routine mutual review you set the stage for a much more constructive dialogue that if out of the the blue you say (I’d I’ve had this urge…), “Hey, honey, have you maxed out your IRA for this year???”  The former helps bring you both closer… the latter feels attacking.

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The 2nd Winner of the Giveaway is SS4BC! Congratulations. Please email me your name and mailing address to receive your prize.

Q&A with Manisha Thakor, Co-Author of Get Financially Naked, Part 1

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Thank you to everyone who contributed questions to the Get Financially Naked and/or entered the giveaway, and a BIG thank you to Manisha for taking the time out of her busy schedule to give such detailed answers!

**Due to the length and detail of these answers, I’ll be breaking the Q&A into 5 parts, with 1 winner revealed at the end of each Q&A. Look for the subsequent parts to come in a few days.

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Bonnie: My BF is older than I am and has virtually no retirement savings right now. He did start a 401K last year, and he’s going to open up a Roth IRA soon. How much should he be contributing to ‘catch up’ to those of us who started in our 20s and early 30s?

Manisha: The short, tough love answer is… he should be socking away at least 15% for his retirement between this 401k and Roth IRA if he’s in his 40s. If he’s in his 50s, he’ll need to up that to 20%.  The rough rule of thumb is that in order to maintain your standard of living in retirement, you’ll need a nest egg that is between 20x – 25x the income you require to comfortably live on.

For each decade you delay past your early 30s, you’ll need to tack on an additional 5% to the oft quoted rule of thumb to “save 10% for your retirement annually” if you want to make up for lost time.

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Cate: When one partner is handling the majority of the finances, what is the best way to keep the other person up to speed on what’s going on with the money?

Manisha: In today’s CrazyBusy24/7 world… this scenario is increasingly the norm, not for gender reasons but for sheer lack of hours in the day.

The key in this situation is to sit down together at least once a year (and ideally twice) to discuss the following items:  (1) Your current net worth, i.e. what you own minus what you owe, (2) How much income your household has had year to date and how much you’ve spent, (3) How the difference in #2 has been handled – if it’s a positive number how was that money invested.  If you spent more than you earned, what was the source of debt and how can you bring it down asap.

I also advise couple to set a dollar amount above which they both agree to consult each other before spending / investing to make sure that during interim periods no one person can wander off the financial ranch.

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Kari: My bf and I have been living together for 3+ years. He is planning on going to law school part-time next year which will last for four years. I have been saving up to buy an apartment and plan to do so before he graduates.

He would live with me and pay a portion of the rent but cannot be on the mortgage or deed as assets will count against him for student loans. What’s the safest way to do this to ensure we’re both protected even if we broke up

Manisha: Good for you for having been a diligent saver.  Before I say anything else, I’m sending you a mental high five for that.  As for your question, to be honest, I personally feel that you should not buy property together if you are not married.  The sheer number of horror stories I’ve heard from couples who have would make your eyelashes self-curl.

My feeling is that if you have saved up money for the house and it’s your name alone on the mortgage and deed – then it’s your house.  That means that your BF is essentially paying rent.  The downside to him in this arrangement is that he is not building equity in your home. However, you are the one taking the risk by buying the home in the first place.  You could consult a real estate and/or family law professional to draft up a formal declaration between you two on how you want to divide things should you break up.

My advice, however, would be to keep it simple.  If you buy the house, you are the landlord and your BF for now is merely a tenant. There’s no shame in him renting! I’d also suggest thinking long and hard about buying a home – until you are sure you can put 20% down, will live there for at least 5 years, and that the sum total of your mortgage payments, property tax, insurance, and upkeep will not be more than 1/3rd of your gross income (and I say your income because you want to make sure you can still afford that home on your own if you and your BF split up).

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Mrs. Smith: I got married in August and have a question about melding finances. My husband has a pretty low credit score (based on some bad habits with credit cards in college) and mine is pretty high but has slumped a bit recently due to 5 months of unemployment and unusual credit card usage.

Is it better to work on improving one credit score before the other? For example, besides making minimum payments on all credit cards and student loans, should we pay down my debt first to get my score back up, or focus on his to bring him up while I continue to carry a credit card balance?

Also, would it help him (or hurt me) to add his name to my credit cards since traditionally (before the last few months) I had better terms on my cards, a better history and little to no balance? Thanks for your help!

Manisha: First, congratulations on both your marriage and your desire to get on top of your finances.  The desire to improve is 9/10th of the battle.

The best way for you both to improve your credit scores is for you to do these three things:  (1) Make all minimum monthly payments on time, every single month.  That’s drives 35% of your credit score.  (2) Each of you tackle your credit card debt simultaneously and try to pay 2x the minimum monthly payment each month on each card.  This will improve your “debt utilization ratio”which is 30% of your score, (3) Both of you should keep your oldest credit card open and in good standing as this shows length of credit history, which is 15% of your score.  Those three steps drive 80% of your credit score, and if practiced consistently for a 6-12 month period should improve both your scores.

Yes, you could try to get super tactical about whose debt to work on first – but credit scoring is not a precise science.  We don’t know with 100% certainty how every single action will affect your credit score, so therefore I suggest focusing on getting the big things right.

As for adding each other to your cards as authorized users for the sole purpose of trying to improve each other’s credit scores, personally I wouldn’t advise doing that.  If you want to have each other on the cards because you are both using them for mutually agreed upon joint expenses that you will responsibly make together… fine.

But the credit scoring system is very opaque.  While it appears that FICO is again considering behavior by authorized users in their calculations of credit scores, individual financial institutions that you may be going to for a loan are free to use their own methodology – which may or may not include authorized user data.

This is my long winded way of saying, rather than trying to game the system your time will be much better spent practicing the best possible personal finance habits from this point forward as that is what will improve the scores for both of you.

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The 1st Winner of the Giveaway is Bonnie! Congratulations. Please email me your name and mailing address to receive your prize.

Get Financially Naked: Money, Relationships, Fun! + Win A Free Book

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What, fun isn’t the first word you think of when you hear the phrase “money and relationships?” icon wink Get Financially Naked: Money, Relationships, Fun! + Win A Free Book So as I’ve alluded to on Twitter, I’m giving away something that’s educational AND romantic (and rated G).

If money is a source of contention in your relationship, or if you’re simply searching for a more structured framework with which to conduct important financial discussions with your significant other, then you should pick up a copy of the new book Get Financially Naked: How to Talk Money With Your Honey by Manisha Thakor and Sharon Kedar.

getfinanciallynaked Get Financially Naked: Money, Relationships, Fun! + Win A Free Book

Get Financially Naked is a follow-up to their 2007 On My Own Two Feet: A Modern Girl’s Guide to Personal Finance. GFN is a short book, but it’s packed full of tips and worksheets to help you and your honey go through your financial beliefs, practices, and habits. The book also includes short pieces by Manisha and Sharon (and their husbands!) about their attitudes toward money and their relationships. Those were really interesting to read.

I’m not at a point yet where I’ll be merging finances with anyone, but CB and I do talk about money. Bottom-line: I would definitely recommend this book for any couple who is married, engaged, planning to get married, cohabiting, or planning on moving in together.

Thanks to Manisha and Sharon, I have 5 copies of this book to give away on this blog. I will also be hosting a Question & Answer session with the authors next week.

To enter the giveaway, please do one (or all!) of the following:

  1. 1 entry: Leave a comment here with a question for Manisha & Sharon to be featured on the Q&A.
  2. 1 entry: Follow me & tweet about it @wellheeledblog with this message: Want to talk money w/ your honey? @WellHeeledBlog is giving away 5 copies of Get Financially Naked here http://bit.ly/5kRu44.
  3. 1 entry: Subscribe to my RSS Feed (please leave me comment to let me know)
  4. 1 entry: Become a Fan on Facebook (please leave me comment to let me know)
  5. 1 entry: Write about this giveaway in your blog (please leave comment w/ URL to blog post).

Everyone person can have submit up to 5 entries. Deadline to enter is Thursday, December 10.

I’ll do a random drawing to come up with the winners, and announce the 4 winners and Manisha & Sharon’s answers to your questions next week.

image source: getfinanciallynaked.com

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Financial Support in a Relationship

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This title came about because I remembered a conversation CB and I had.

CB told me that he would support me/us financially in our future life together, if I wanted him to. I was a little touched and a little surprised, but I told him no – as supportive (ha! pun intended) as that sentiment might be to some people, I would much rather that we support each other in all facets of a relationship (which definitely includes the financial aspect).

Then he said, “it’d be like we’d support ourselves.” And I thought, well, yes, but even better.

I think “supporting each other financially” implies a deeper degree of the partnership model than “supporting ourselves financially” – because two people can support themselves individually, but only if they become true partners can they support the relationship / the household they build together.

But just as importantly, supporting each other financially means that we preserve the ability to support ourselves if something were to happen. And as CB and I talk more about our attitudes toward money and our financial backgrounds (conversations that we’ve been having for, literally, 6+ years), it’s always interesting for me to see how our conversations evolve. Money has become a natural topic for us, and as a personal finance nerd, I am excited about that.

And honestly, am I a disgrace to all the progress that women have made if I thought his comment was kind of sweet? No, right?

What do you think? Is there a difference between supporting each other and supporting ourselves?

Friends and Borrowing Money

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iou piggy Friends and Borrowing Money

Let’s take a hypothetical situation. Let’s say that you are good long-time friends with “Sammy” (that’s a nice, unisex name, right?)

Now, one day, a few months ago, you and Sammy had a lunch date at a small neighborhood bistro. You have agreed to split the bill. But before you started ordering, Sammy realized that he/she didn’t have any money – the wallet was left at home. Although you generally avoid lending money to friends, you couldn’t very well tell Sammy to starve while you ate! So you paid for Sammy’s tab (~$20) and Sammy told you he/she will repay you when you get together the week after.

Well, you were supposed to get together a few times, but Sammy got really busy with work and school, and now finals time is coming up, and so the second lunch never materialized.

You realize that (1) Sammy is a good and upstanding person who would never try to take advantage of you, (2) Sammy has never borrowed money from you before, (3) right now is a very busy time for Sammy and this issue probably just slipped Sammy’s mind, (4) it’s only $20 (i.e. not the end of the world) – you’d rather write it off than to create rifts in the friendship.

On the other hand, $20 is $20 is $20. You would like to be repaid for what was clearly a loan. You have gently reminded Sammy once a few weeks ago but Sammy couldn’t meet up with you. But again – on the grand scale of things, your friendship is far more valuable than $20.

What would you do?

The New Art of Alimony (Or, You Still Have To Support Your Former Spouse 25 Years After the Divorce)

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Revanche brought an interesting article to my attention last night… and we both agreed that it’s pretty, well, bogus.

There are certainly circumstances in which alimony / spousal support may be justified, especially when both partners agreed to have one partner give up his/her earnings to care for children. One of examples cited in the Wall Street Journal article, however, just makes me shake my head.

Consider this:  A couple divorced amicably in 1982. Both sides agreed to waive any right to alimony. Apparently, that agreement didn’t hold – a judge ordered one spouse to pay $400 weekly payments to the other, 25 years after the marriage ended. It’s a long excerpt below, but I think it’s really enlightening to read.

Paul and Theresa Taylor were married for 17 years. He was an engineer for Boston’s public-works department, while she worked in accounting at a publishing company. They had three children, a weekend cottage on the bay and a house in the suburbs, on a leafy street called Cranberry Lane. In 1982, when they got divorced, the split was amicable. She got the family home; he got the second home. Both agreed “to waive any right to past, present or future alimony.”

But recently, more than two decades after the divorce, Ms. Taylor, 64, told a Massachusetts judge she had no job, retirement savings or health insurance. Earlier this year, the judge ordered Mr. Taylor, now 68 and remarried, to pay $400 per week to support his ex-wife. “This is insane,” Mr. Taylor says, adding that the payments cut his after-tax pension by more than one-third. “Someone can just come back 25 years later and say, ‘My life went down the toilet, and you’re doing good—so now I want some of your money’?”

In 2003, more than two decades after agreeing to end a 17-year marriage without alimony, Ms. Taylor was diagnosed with melanoma. She lost her publishing job when her employer of 38 years filed for bankruptcy protection. She’d recently surrendered her home to the bank and filed for personal bankruptcy to resolve $27,000 in medical and credit-card debts. [1]

Mr. Taylor, meanwhile, had retired after 33 years working for the city of Boston, with an annual pension of $56,000.

In a September 2007 complaint filed in a state probate court, Ms. Taylor cited “changes in circumstances” and sued her former husband for support payments. She wrote that Mr. Taylor owned homes in Florida and Cape Cod and traveled to Europe. [2]

In court, Mr. Taylor said he was sensitive to his former wife’s plight, but that too much time had passed and that their divorce was final 25 years ago. His second wife, he said, had inherited the Cape Cod house from her father. Their trips were financed through home-swaps and reduced-fare tickets from his stepson, an airline employee.

In June 2008, a probate judge ordered Mr. Taylor to pay temporary alimony based on Ms. Taylor’s “dire immediate need” and his “ability to pay.” In its January final order, the court, citing Mr. Taylor’s income from his pension, told Mr. Taylor to pay his ex-wife $400 per week for five years. The payment will eventually fall to about $250 a week for the rest of her life. [3]

Virginia Connelly, Ms. Taylor’s lawyer, says she can see how Mr. Taylor could find the situation unfair. But under Massachusetts law, she said, judges who want to keep a person off public services can turn to the ex-spouse. [4]

In May, to seek relief from legal and other bills, Mr. Taylor declared personal bankruptcy. He is still responsible for supporting his ex-wife. “If she loses all her money, so what? She can just take me back to court,” he says. “Somewhere along the line I should have peace of mind.”

[1] I don’t think either party are the bad people. Ms. Taylor’s situation is sad – anyone would be sympathetic to her illness. She doesn’t appear to have any means of supporting herself, so I’m going to assume that she went after her ex-husband because she felt like she didn’t have any other choice.

[2] And I don’t see how Mr. Taylor’s situation matters one iota. It’s been 25 years – of course there are changes in circumstance! Even if he is a millionaire with money made off unsavory business practices in a 3rd-world country – his money is his. It does not belong to a woman whom he divorced 25 years ago, and with whom signed an no alimony agreement. If Mr. Taylor had the ability, it would be nice / morally right for him to help the mother of his children, but financial support should not be dictated by the courts.

[3] Mr. Taylor and Ms. Taylor divorced and signed an no-alimony agreement. Which in my book should mean you cut future legal and financial ties with the person you were once married to. Which should mean that the contract that you both came to (and there’s no evidence that this no-alimony agreement was made under duress by either party) should be upheld. Which means a court shouldn’t be able to go back and say to Mr. Taylor, oops, you’re still financially responsible for this person whom you have no legal relationship to.

[4] Under Massachusetts law… judges who want to keep a person off public services can turn to the ex-spouse. To this I ask: WHY? Why is the law set up in such a way that let the government shirk its responsibility and go after the ex-spouse? If an individual qualifies for government help, he/she should receive such help.

Right now I am receiving unemployment insurance payments because I qualify for them. It doesn’t matter that my parents have the ability to give me $X a month – can the government go to Mom and say, oh, sorry, you have to cover WellHeeled’s UI payments because you were her primary caretaker for 18 years, and we don’t really want to pay.

Um, NO. So why is this case of the ex-spouses separated by 25 years who have both agreed to an no-alimony agreement different?

In conclusion: In cases such as these, I’m sure there are all sorts of information / legal issues that are not covered here. But from what I’ve read from the article, I really feel for Mr. Taylor. I just really don’t understand what the court’s reasoning was. And if a divorce agreement can be overturned 25 years after the fact, I wonder how much water prenuptial agreements really hold.

Personal Finance Is Sexy

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Recently CB opened a Roth IRA. Never doubt that personal finance knowledge is very attractive. (I wonder if my money nerdism has rubbed off on him).

I am so proud of him for taking this step. icon smile Personal Finance Is Sexy

So next time you are trying to interject some romance into your relationship, why not give your partner a card and say, “honey, I started saving for retirement!” Oh, the personal finance sparks will fly!

The Man Gets The Check?

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When CB and I go out to dinner, we usually split the check. Other times, one of us would pick up the whole tab.

I’ve noticed something interesting – when we ask for the check, sometimes the waiter/waitress would place the check towards CB, clearly in his direction or by his arms (on the flip side, I’ve never received a check that was clearly in my direction – it’d be in the middle of the table).

Is the waiter subconsciously nodding to the traditional man-paying-for-dinner practice? Or maybe CB always sits towards outside of the table.

I’m not offended, just found it curious.

Has anyone experienced something similar?

image source: wikipedia.org commons

Money, Relationships, Compromise – Figuring It All Out

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Last night, on a lark, I decided I want to go out of town for a getaway this weekend. I thought it’d be a good way to get some R&R and go on a little adventure.

I bought up the idea to CB, who did not share my enthusiasm. Part of the reason is that I currently have more discretionary income than he does, and part of the reason is that I tend to do things more spur-of-the-moment than he does (but I still google for coupons, no matter how spur-of-the-moment! icon wink Money, Relationships, Compromise Figuring It All Out ).

To be honest, I was disappointed. There goes the romantic weekend escape. I try to think about how I’d feel if the situation were reversed. Might I feel uncomfortable that my significant other offered to pay for the bulk of the vacation? Might I feel that the trip, on such a short notice, wasn’t well-thought out?

I might, and CB probably does.

The rule of personal finance is that you can’t have everything you want, every time you want it. The rule of relationships is that you can’t have everything you want, every time you want it. (Hey! They sound suspiciously alike…).

So, I’m trying to deal with this situation, well, in a constructive manner: acknowledge my disappointment, empathize with his situation, work out a suitable compromise that will be fun and budget-friendly, and then move on.

After talking about it, we decided to go for a day trip instead. The good thing is that this weekend just got MUCH cheaper. Still traipsing around the beach. Still kayaking. Still having fun in the sun. Just minus the two nights of hotel and the additional food expenses.

This little exchange just clarified what a messy topic money can be in relationships. And this is only one weekend that we’re navigating.

How do people do it with much bigger decisions – Should one parent stay home? What sort of protection will the primary caregiver receive in exchange for giving up his/her earning ability? What house to buy? Which set of in-laws will get more help? How should inheritance be treated? Should there be a prenup? What’s a fair way to set up a prenup? So many questions. So many minefields!

Share your experiences on money and relationships in the comments!

10 Things I've Learned About Love, Money, and Myself

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Valentine’s Day + 6 years with CB + personal finance blog = 10 things I’ve learned about love, money, and myself!

10. I can have fun without lots (or harder, but still possible, any) money: So many of my happiest moments with CB are cuddling in bed and watching a movie on hulu.com. Hugs? Are free.

9. But I have to be more creative: When I have $50 or $100 or more to spend – having a fun-filled day is easy: theme park, museum, or dinner. Perhaps a trip to go kayaking or a weekend get-away. Having a $10-$20 budget means that I have to be creative about places to go.

8. It’s easy to say money doesn’t matter, but it’s not true: Money is like air – you notice how desperately you need it when it’s not there. And being together and broke in your 20s might be romantically bohemian, but being together and broke in your 30s or 40s often results in… not together.

7. It’s more romantic when the guy pays for dinner: I hope I didn’t just set feminism back 100 years, but it IS more romantic. Just like it’s more romantic when the guy opens doors, pulls out chairs, and walks on the curb side of the street (CB does this, and I absolutely love it).

6. Money reflects values, and it takes adjustment to see the other side: I love going out to eat. Good food = something worth spending on. CB loves electronics. So I try to be mindful of that fact. Dinner at Chez Swanky might be good enough for me to spend $40 on, but not for CB. So, I deal with it.

5. Fighting about money sucks: CB and I have had maybe one fight about money, which sucked.

4. Fighting about money isn’t really about money: It really reflects our priorities and expectations, both of which can be out of sync between two people. Money is just the conduit through which we express those feelings. It doesn’t help that feelings of self-worth, accomplishment, and all that stuff is wrapped in money.

3. I want a (fair, reasonable, executed-by-two-happy-in-love-people) prenuptial agreement: I just do. I did my high school presentation on prenuptial agreements – you can imagine the excitement in class. It makes me feel more secure. Does this mean that I won’t be as committed to my marriage? I hope not.

2. When I’m married, I want to have a dual-income household: We don’t have to make equal amounts, but each of us has to make SOMETHING (of course, barring layoffs and illness and such). It’s far too frightening for me to go without my own income, and it’s far too stressful to be responsible for the well-being of an entire family. My mom did that for a while, and I think that was one of the most stressful periods I’ve ever seen my parents in. Ever.

1. Underneath it all, I still believe in love, marriage, and (maybe) the baby carriage (and long-term investable assets and positive cash flow!): Despite a penchant for seeking out dissections and critiques of the modern institution known as marriage, along with dismal statistics about equality, divorce, and happiness, I still want to build my life with someone whom I love and respect. I still think we will be happy. Optimism? Still got it.

What are your 10 things?

I Don’t Want To Be Poor With Anyone

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On a sunny weekend morning, as the whole day stretched out in front of us like a long embrace, CB turned to me and asked, “would you be poor with me?”

If I was feeling romantic and dreamy, I might’ve answered, “yes, because I love you,” and then added a caveat about “but you won’t be poor.” But all this personal finance must’ve seeped into my subconsciousness, or maybe half-asleep I am more honest and less tactful than I might’ve been awake, because I managed to look straight into his beautiful big eyes and said, “I don’t want to be poor with anyone.”

I thought about that less-than-romantic (but very-honest exchange) after I read posts by Madame X and Meg on the topic of the “accidental woman breadwinner.”

Reading this article made me realize that I don’t want to be an “accidental” breadwinner in my relationship, just as I don’t want to become an “accidental” stay-at-home wife or mom. “Accidental” implies a lack of choice, a lack of introspection, a lack of conscious decision. “Accidental” spells “resentment down the road” to me.

In marriage vows people promise to stay together “for better or worse, for richer or poorer.” I believe in those vows very strongly, but I also don’t subscribe to the theory that “all you need is love.” I’ve seen the tension that bad finances bring to even the strongest of marriages. I’ve seen it with my parents. I’ve seen it with several of my mom’s friends. And what I saw scared me.

Maybe that’s why I’ve always envisioned that both my future husband and I will work, even after we have kids (one, maybe two). One of us may take a part-time schedule for a year while the kids are young, but I don’t see either of us taking a longer hiatus from our careers. A satisfying career is important to me, and I’d imagine, to my future husband as well. Maintaining financial autonomy is important to me. Being able to care for my family if anyone should happen to my spouse is important to me.

The topic of whether to have a stay-at-home parent is a sensitive one – I don’t think there’s one solution for all families. It’s a personal decision. My thoughts to this subject is influenced by my mother, who has always worked. In fact, she left me in the care of grandparents for FOUR years when I was young to work overseas. I did not see her (or my dad) from the age of 5 to 9. And I turned out okay. Given my experience, I think I can probably manage any guilt I will have as a working mother.

So, no, I don’t want to be poor. Not by myself and not with anyone else. No one knows what tomorrow brings, but I hope that by making smart financial decisions and by marrying a partner who shares my priorities (and whom I love and respect, of course – divorce is a huge money drain!), I will improve the odds of having a “richer” life instead of a poorer one.