Financial Health can Save Your Marriage

Posted on February 10, 2010
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Many people think that money problems are the leading cause of divorce. If you Google the term “money problems cause of divorce” you will see many sites claiming just that. In fact, that’s what I did when starting to write this post. Most of the arguments in my marriage are over money issues. While looking for information to back up my thoughts on the issue, I found an interesting article that claims money issues aren’t a leading cause of divorce. It makes for an interesting read, and I agree with it – partially.

According to the article, money issues account for 5% or less of divorces. Other issues – incompatibility, lack of emotional support, abuse, and sexual issues all rank higher than money problems as causes of marital problems and divorce. Except for sexual issues though, it’s been my experience that disagreement on money issues can be a big contributing factor in the other 3 issues mentioned.

People view money differently. Some think of it as security, some think of it as freedom, some people just like money for it’s own sake. I tend to think of money as freedom. Having money gives me the freedom to buy things, go places, and generally do what I want to do. If someone (for example my wife) prevens me from using money like this, I feel like they’re trying to control me. My wife, on the other hand, looks at money as security. It’s something to be saved in case you need it in the future. From her point of view, not saving money is akin to not having emotional support.

In our case, we had to reach a compromise. I can’t spend as much as I want and she doesn’t get to save as much as she wants. The magic number seems to be $10,000. As long as we have this much in reserve savings, my wife is happy and feels “safe.” She lets me spend pretty much what I want (within reason). When our reserve drops to less than $10,000 we start having problems. Every little purchase I make is second guessed, she finds other things to pick at or fight about, etc. As long as we keep $10,000 in reserve though our marriage is very smooth.

Ten Dollars a Day

Posted on December 3, 2009
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Ten dollars doesn’t seem like very much. If you’re like a lot of people, if you found ten dollars on the street it likely would be spent by the end of the day. If you lost ten dollars, it probably wouldn’t seem like a huge loss. If you spent ten dollars on something you didn’t really want or need, you probably wouldn’t feel it was overly extravagant. The problem, though, isn’t that ten dollars isn’t very much money. The problem is that ten dollars doesn’t seem like very much money. Actually, ten dollars can break you or make you, because over time ten dollars a day can add up to a lot of money.

Let’s say you’re like a lot of people, living paycheck to paycheck. You’re not racking up any bills, but you’re spending everything you earn – nothing is going into savings. Then, something or a combination of things happen and your living expenses go up by ten dollars a day. What happens? Unless you can increase your income to match or get the money from family or friends, you’ll probably have to put the extra spending on a credit card. Let’s assume the interest rate on the card is 17%. In just one month, that will bring your unpaid balance to $300, which will start adding around $4.50 in interest each month to your balance. If this continues for just 10 months, you could have an accumulated unpaid balance of about $3240, wich will generate about $45 in extra debt every month until you get it paid off. I know this can happen because I let it happen to me a long time ago. Spending ten dollars a day more than you make, over time, can easily break you.

Let’s look at it from the opposite side though. Let’s say you’re spending what you earn each month and you have $3240 in credit card debt. If you could figure out a way to cut your spending by ten dollars a day and apply that ten dollars to your credit card, you could have the debt paid off in about 11-1/2 months (it takes longer to pay it off than it did to accumulate it because the unpaid balance keeps racking up interest charges). So, while over spending ten dollars a day can get you into substantial debt very quickly, under spending by ten dollars a day can get you out of that debt almost as quickly.

If you have no debt, ten dollars a day goes back to not sounding like very much. Even saving for a month and having $300 to show for it may not sound like much. But think about it. If you did it every month for 10 months, you’d have over $3000 saved. Even if you only did it for one month, the $300 could be leveraged. For example, if you wanted to take a shot at making money by blogging, $300 would easily pay for a domain name and hosting for a year with enough left over to have a custom logo done for your web site. There are other part time businesses you could get into as well for $300 in startup costs.

The other thing about small amounts of money (snowflakes) is that over time they can snowBALL. It’s really easy to come up with a few ways to make ten dollars, but dificult to do it consistantly every day. Over time though it gets easier, and you eventually could find yourself making an extra ten dollars each and every day. What then, quit? I’d suggest start working on ways to make a second extra ten dollars a day. How far can you go with this? That’s up to you. The sooner you start though, the faster you’ll get there.

Enforcing accountability?

Posted on May 13, 2009
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I got my Discover bill last month, and oops… $708??? I’d gotten in trouble the month before for a $1500 bill, even though my purchases were things for my Barracuda, which my wife had agreed I could start fixing up. Well, you can’t fix up an old car without spending money on it, and she had also agreed to a general budget for the project as well. The problem was I hadn’t told her I was going to buy the stuff, and she kind of freaked out when she saw the withdrawal from our bank account.

When I got this month’s bill, I new she’d freak out again. Besides some stuff for my car, I’d also bought a model airplane engine and some books without telling her. I knew she wouldn’t be happy, because I hadn’t mentioned the purchases – yet I feel I have the right to buy stuff without getting her approval for every little thing. To fix it this time, I used money from my cash stash to pay part of the bill and paid the rest from our bank account.

This kept my wife happy because she only sees a withdrawal of about $300 or so for the Discover payment. I’m not happy about it for several reasons. First, I don’t like doing things like this because I know it only leads to problems. Second, it does nothing to help us resolve our differences over how money should be spent. Third, I shouldn’t have to do it – I should be able to spend some money without being questioned about it. We’re not living paycheck to paycheck any more.

I haven’t decided the best way to handle this yet. For now it seems like I dodged a bullet, and I don’t like dodging bullets. Doing so is a good way to get hit.

Adding Injury to Insult

Posted on February 14, 2009
Filed Under Credit Cards | Leave a Comment

Our card that was canceled last month was one that earned rebate rewards, between 1 and 3%. We used that card a lot, and had earned a little over $200 as of our January statement, which had a little flyer telling us we would receive the rebate coupon with our February statement.

We got our February statement this week, and… no rebate coupon. I figured that maybe since they canceled the card, they were withholding the coupon until we paid our balance. In looking over the statement, though, all references to the rebate cash we had earned was gone. Hmmm, not good…

I called Customer Service. The first (English as a second language) person I spoke to said I’d have to call a different number, which he gave me, and turned out to be a wrong number. I called Customer Service again. This time the person I spoke with (also English as a second language) told me I had to talk to a different department, but at least he was able to transfer me instead of telling me to hang up and call someone else.

The person I was transferred to was understandable, but I didn’t like what she had to say. According to her, since the card company had cancelled our card before the closing date for the February statement, we forfeited our rebate cash, almost $200. I explained that we had never missed a payment, had never been late with a payment, had done nothing wrong in fact, and they were taking money away from us that we had earned by using the card in good faith. “Sorry, Mr. yyyyy, that’s our policy. It’s in the card holder’s agreement you signed when you applied for the card.”

My first thought was to go ballistic and curse her out over the phone. Not a very Christian thing to do, and would probably do nothing except make my blood pressure go even higher. Instead, I asked to speak with her supervisor. I explained my tale of woe to the supervisor, and to make a long story short, I was eventually able to get them to apply our rebate to the remaining balance on the card. Here’s what I’ve learned from this experience:

Hope this helps.

Cheers,

Ken

Freebie Trading for Cash…?

Posted on February 5, 2009
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Because frugality can only get you so far, I’m always looking for new income streams. Earlier this week, I came across a short post on (link)Christian Personal Finance on trading freebies to earn extra cash. I like free stuff, and I like the idea of bartering or trading – one of my favorite books when growing up was Alvin’s Swap Shop. I don’t have speakers on my PC, so I couldn’t listen to the podcast, so I downloaded the report. It’s an interesting read, and I’m sure there are some people who actually make money doing this. It’s not something I’ll be trying any time soon though, for several reasons.

First of all, according to the report, you’re required to give “accurate” information when filling out the offers. I don’t have a problem with giving out my mailing address, but I have a huge problem with giving out my phone number. I work as a PBX technician at a community college, and bogus charges on phone bills by illegitimate companies is a problem that I deal with every single month.

Second, it seems that in order to successfully complete the offers, you must set up your computer and browser in such a way that it would be especially vulnerable to viruses and other mal-ware. If you have a spare system you can dedicate to freebie trading, this might not be a concern for you. I don’t, and I’m not willing to risk my home system.

Finally, and this is the biggy, participating in freebie trading requires you to give the companies either a live credit card number or a live ATM/debit card number. According to the report, the companies don’t allow you to use prepaid cards. Some of them even consider it “fraud” to use a prepaid card. To me, this is a HUGE red flag. If the offers are really free, then why do the companies need my credit or debit card information? Even if not completely free, for example shipping charges on an otherwise free item, what difference does it make to the companies what kind of card I use? Given this condition, I don’t think I would touch this one with a 10 foot pole.

I could just be overly paranoid, and I’d love to hear from people who have actual experience with freebie trading. For those who want to try it, I would make the following recommendations:

  1. Have a dedicated computer and email account just for freebie trading.
  2. Check your phone bill each month for unexpected charges. report any that you find to the phone company and try to get them reversed.
  3. Keep a separate, low limit credit card to use for this activity. alternatively, keep a dedicated bank account with a really low balance.

When it comes down to it, there are many other ways of making extra money that don’t expose you to the risk that this method would seem to.

Cheers,

Ken

Politics

Posted on February 3, 2009
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One thing I’ve noticed about most of the personal finance blogs I read is that they tend to shy away from politics. In a way, this makes sense. They are, after all, Personal Finance blogs, not political blogs. Also since people reading the blogs probably have a wide range of political opinions, bloggers may be reluctant to post something that might offend a large number of their readers.

On the other hand, what is going on politically (at least in the US) is going to have a huge impact on people’s personal finances. I can’t see how legislation and policies that have an effect on the economy on every single level could not be of interest on a personal finance blog. Anyone who got shafted last week by the Federal government’s “deal” with Bank of America may agree…

Cheers,

Ken

Economic Downturn Hitting Closer to Home

Posted on February 3, 2009
Filed Under Attitude | Leave a Comment

My wife works in the casino industry – she’s a poker and table games dealer. Many of her friends are also dealers. The casino industry has been hit pretty hard over the last year. Early in 2008, one of the casinos where many of my wife’s friends work informed their dealers that all full time employees who started employment in 2005 or later would be cut to part time.

Last weekend, one of her friends called to say they had rolled back the cutoff date to mid 2003. The first time around, it didn’t hurt many people in a really bad way. If you’re not familiar with the casino industry, many dealers work 2 or even 3 jobs. Most of the people who were affected the first time around were able to make up the hours at their second jobs, get by with fewer hours, or find a diffrent job outside of gaming.

This time it’s a little different. The ones who stayed on are those who actually depended on working full time for the casino. Many are married couples with kids at home, both working for the casino. I really feel for these people. I don’t know what the answer is, and I don’t know what I’d do if I were in their position. What I can do right now is pray for them and hope they get through all right.

I know one thing, I wish President Obama and the Democrats in Congress would stop trash-talking the economy. We’re not going to recover until consumers start spending, and consumers aren’t going to start spending until they have more confidence in the economy. Continually spouting off about how this is “the worst economy since the Great Depression” (it isn’t) doesn’t help anyone except the politicians playing on people’s fears for political gain. This is the change we’re supposed to believe in? It’s making me sick to my stomach.

Cheers,

Ken

Credit Card Customer “Service”

Posted on February 2, 2009
Filed Under Credit Cards | Leave a Comment

I’ve been reading how certain credit card companies are tightening up and canceling card accounts that are in good standing for whatever reason. “Never happen to me,” I thought – usually when I read a story like this, there seemed to be an underlying reason – the account was inactive, something not related to the card had caused a downgrade in the user’s credit score, etc. Neither situation applied to me – I had committed no credit altering financial sins since the card was issued, and we use(d) it for almost everything except our house payment. We also paid the full balance every month, on time, without fail.

It came as a big shock, then, when I tried to use the card last Sunday and it was denied. I thought maybe something was wrong with the card reader. The clerk entered the information manually (several times) and got a manager to try as well. Luckily I had enough cash to pay for the purchase – I usually don’t carry cash. After leaving, I called the customer “service” number on the back of the card and was informed that our account had been canceled. According to the person I talked to, they had done a periodic check of my Experian credit report and determined that I was now too much of a credit risk, so they just canceled our account – no warning, no courtesy call, nothing. No new negative credit issues since the card was issued, no change in usage pattern, no late payments ever.

I know my credit score is ugly, but then they didn’t have to issue the card in the first place. To add insult to injury, they sent us a letter after canceling the card saying that “it may be reported negatively” to credit reporting agencies (we’ve done nothing wrong) and threatening to send our account to collection if we don’t pay the remaining balance in full (after a perfect payment record. When I called and asked about our cash back bonus that they owe us, the person I spoke to said we “should” get it, but she couldn’t tell me when.

I always thought of this card company as a first class operation – not one of those fly-by-night outfits you sometimes read about. I don’t know what to think of them now.

I have many thoughts about this, most of which aren’t suitable for a web site that aims to promote a Christian world view. I’m sure there is some upside to this, and I’m working on developing a positive attitude towards this. I guess I’ll wait and see if they try to rip off my cash back.

Cheers,

Ken

Christmas Eve Bean Soup

Posted on January 6, 2009
Filed Under Frugal Gourmet | Leave a Comment

One of the best things about the holidays is hanging out with family. I especially enjoy eating my mom’s home cooking. Here is one of her recipes. In spite of the title, this soup is delicious any time of the year, but especially on a cold winter night. Makes about 8 servings. Enjoy!

  • 8 ounces dried small lima beans
  • 8 ounces dried small navy beans
  • 1 quart chicken broth
  • 1 whole bay leaf
  • 1/2 teaspoon dried thyme
  • 2 whole carrots, peeled and chopped
  • 2 stalks celery, diced
  • 1/8 cup olive oil
  • 1 large brown onion, peeled and chopped
  • 1 pork shank
  • salt and pepper to taste

Wash beans. Place in large stock pot and cover with water. Bring to boil, cover pot with lid and turn off burner. Soak beans until liquid returns to room temperature. At this point, I like to transfer the beans and liquid to a Crock Pot.

Lightly saute chopped carrots, celery, and onion in olive oil until celery and onions start to turn translucent. Add to pot of beans. Cut meat from pork shank into small pieces and add to pot. Add chicken broth, bay leaf, and thyme. Bring to boil, then reduce heat and simmer. When beans are almost completely cooked, add salt and pepper to taste. Continue cooking gently until beans are very tender. Soup should be thick and creamy. This also works great with a Crock Pot.

Note: This soup is great for a “cozy” supper. We like it with corn bread just out of the oven. It would also go great with a toasted slice of garlic bread.

This soup is delicious, inexpensive, and easy to prepare. It works great around the holidays because you can use leftover ham in place of the pork shank. It also freezes well. My wife and I like to make a double batch and freeze single portions for inexpensive “instant meals.”

Cheers,

Ken

Looking Forward – Goals for 2009

Posted on January 2, 2009
Filed Under Attitude, Couples | Leave a Comment

After a disasterous 2007 (completely my fault), 2008 was a very good year for us financially. 2009 isn’t starting out to look quite as good though. Our biggest challenge will be to maintain our current level of income. My wife works in the casino industry, which is being hit hard by the recession. They are predicting that 2009 will be one of the slowest years in recent memory. As for myself, I am a state employee on a year to year contract which expires in June. Our state is in the middle of a budget crisis, so my once secure job is no longer secure after next June. With that said, we have some pretty hefty financial goals for 2009.

Savings

I would like to increase our savings account by at least $12,000, not including interest earned. This sort of acts like an emergency fund, and also like a self employment fund. The eventual goal is to have 2 years’ worth of living expenses so both of us can quit our jobs and pursue self employment.

Investing

In 2008, I put $500 per month into a 403(b) at work. For 2009, I’m going to change this account to a Roth 403(b) and up my contribution to $1,266 per month (making my annual contribution close to the maximum allowed, $15,200). We will also fully fund my wife’s Roth IRA early in the year to take advantage of the current stock market levels. For 2009, I will also open my own Roth IRA and fund it to the maximum allowed.

As for what to invest in, my 403(b) at work is 100% in Fidelity mutual funds and will stay that way. Our Roth IRAs will be a mix of mutual funds and individual stocks.

Spending

My wife wants new blinds (our old ones really do suck) and I don’t know yet what that will cost. I also want to spend about $15,000 fixing up my Barracuda and about $3,000 on a deer rifle and related gear.

Conclusion

If we consider ourselves as living on one income, we will need to earn about $170 above what I make at work each and every day in order to meet our goals. A lot of this is covered by my wife’s earnings, but I’ve decided to make a goal of earning $170 net every day, above my regular salary. If we can achieve that, we should be OK even if both of us lose our jobs.

Cheers,

Ken

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