Free Money Finance

Reach Your Goals Together

The following is a guest post from Mr. Xyz from Our Financial Path.

We met about 4 years ago and from day one, it was love at first sight. We have a lot in common and enjoy spending time together but what quickly found out, is that we had very different finances. I enjoyed spending and used to go shopping just to pass time while she, to my great surprise, had a healthy savings account.

I was brought up in a very financially savvy, frugal, middle-class family who thought me about the importance of savings at a very young age but when I started making good money, I did spend every penny I earned.

I just did not have a goal, anything to look up to. Then, I discovered the Financial Independence movement, a whole concept that allows one to be financially free relatively quickly (a decade or so) by saving a large part of income and investing it in the markets for long-term prosperity.

I was amazed by the concept and math behind it so I immediately showed my spouse and started planning our future for early retirement in the next ten years (we are currently saving over half our incomes). Getting her on board was just the first step, and then we have to follow through.

Having a grand, long-term, goal is great but it is the little things that will eventually add-up to it.

Working on Money Together

Communicate with your spouse to see if you are on the same track. Without communication, you will never know if you share the same goals and values. If you are both savers and wish to reach financial independence early, you can work together toward that goal and speed up the journey. If you are both natural savers like me and my wife, having a common goal will motivate you and keep you accountable.

The thing is; things do not cost twice as much when you are two living together. Housing, for example, is much cheaper as a couple since you can split the expenses while basically living in the same space as when you were single. You might also end up saving a ton of alcohol and bars now that you are out of the single's scene now!

If you both have different goals, it can work out too. Keeping separate finances and separate goals might be the best thing to do if you and your spouse are not in the same boat. If you are ready to sacrifice a little to buy yourself freedom later, that’s great, but not everyone is ready to do so and that's completely fine. Instead of arising constant stress and concerns about your finances, simply do your own thing and let your spouse manage their own side of things.

Even if we share the common goal of reaching financial independence early, we use the three-bucket system.

Your Bucket - My Bucket - Our Bucket

With spending buckets, we each have our own separate bank account and our own spending but share a third bucket for the shared expenses such as our mortgage, bills, and maintenance. This lets us focus on our long-term objectives rather than nit-picking each other’s spending every time a few dollars are spent.

The easiest budget to follow is having no budget at all. We simply automate our savings to max out our registered plans (401k, Roth IRA…), attain our desired savings rate, and then we live off the rest.

Total Income – Total Savings = Your Budget for the Month

Spending only what is left after your savings forces you to reach your goals but it only works if you do not go into debt and go over-budget. For example, we use cards for all our purchases to maximize the rewards but we never spend money we do not have. The easiest way to think of this is to see your credit cards as a medium of payment and not as available credit. Use cards for their benefits but always pay the balance in full each month.

It is undeniable that credit cards can offer a lot of benefits and we maximize these rewards to the max (we earned over $13,000 in travel rewards last year!!!) but it has its inconveniences. Annual interests are so high that if we were not tracking our expenses and spending only what we can afford to pay back, the fees would negate any rewards earned.

My wife hates calling credit card companies but she never complains once we stay in fancy hotels and fly the world for free!

Talking about benefits, explore benefits offered to you and use them to the maximum. Whether from your employer or from the government, if they have a program in place for you; you deserve it. Take full advantage of any match your employers are offering in your 401K or search the U.S. government’s benefits page to see which program could help you.

Adding up all these little things can lead to great, amazing, things. We are planning to retire early in the next 10 years and this is only possible because of all the little things that we do to make our life slightly more efficient. Single or as a couple, small life hacks will change your life over the long-term.

How Much Should You Spend on an Engagement Ring?

Here's an interesting question: how much should you spend on an engagement ring?

Before we get to the "answer", let's look at some very interesting quotes from the piece linked above.

Let's begin with this one:

If De Beers put the burden on men to buy the perfect stone, Facebook and Instagram have ratcheted up the symbol of love to new levels. Jewelers report that their male customers indicate with increasing frequency their fear of proposing with an inferior ring not worthy of posting on social media. Some men who are especially reticent resort to purchasing "holding rings," temporary tokens of engagement that the woman can later swap for a handpicked ring.

I'm not sure exactly what they are saying here so maybe someone can enlighten me.

Are they saying the guy picks a ring that's generally "ok" with the shop's knowledge that he'll return it later for a bigger/better ring that his fiance picks out?

That's not a bad idea if it ensures she gets the ring she wants and they both agree on it.

If it's because she's going to demand at least 3 carats and there's no way he can make her happy by picking something, then that's out of control IMO.

They then add some very interesting information:

A 2014 Emory University study revealed that a correlation exists between the amount spent on wedding expenses, including the engagement ring, and the success of the marriage. The correlation is actually quite strong, and categorically inverse. Spending $1,000 or less on wedding expenses was associated with the strongest likelihood of a positive outcome and the lowest divorce hazard. Exceeding $20,000 on wedding expenses was associated with a sharp increase in divorce hazard.

Given that money trouble has been repeatedly indicated in previous studies as a leading cause of divorce, the Emory University researchers posit that stretching budgets or incurring debt to pay for a wedding ceremony or ring potentially sets a new marriage on a trajectory toward the kind of financial strain that can lead to a divorce.

Very interesting...

Especially in light of the fact that so many people spend so much on their wedding. 

We spent somewhere south of $5,000 (probably more like $3k), but that was in the stone ages. We'll be married 25 years this fall so it worked for us.

Finally, Investopedia does not answer their own question, but they do say this:

The answer to how much you should spend on an engagement ring is not three months' salary, the amount suggested by De Beers decades ago, nor is it more than your girlfriend's friend's fiancé spent on the ring that racked up all those Facebook likes. Spending less may not make you a social media superstar, but if the data is correct, it could lead to a happier, longer-lasting marriage.

I can't remember how much I spent on my wife's engagement ring but I do know this:

1. I paid cash.

2. The cost was somewhere around two months' salary, but it could have been less.

3. I got the diamond at a wholesaler for a fraction of the cost I would have paid at a jeweler.

4. The ring was appraised at several times its value once we put the stone together with a setting. Somewhere around $25k. Yikes!

I'm not sure what I'd pay these days but something like $5k would probably be my limit. If the woman was upset by that then I think it would be an indication that we were not matched properly.

How about you? Do you have any guidelines or suggestions on what an engagement ring should cost?

Cost of Average Wedding Almost $30,000

I can't resist. I know I've covered the cost of weddings previously, but every year when the new numbers come out, I'm astounded once again.

Here are the highlights for 2013:

Wedding budgets have grown for the past two years, with newlyweds (or their families) shelling out an average of $29,858 for the big day in 2013, up 5% from the previous year, according to a survey of 13,000 brides and grooms by wedding website TheKnot.com.

Beyond the wedding venue and catering, which cost an average of $13,385 in 2013, other big-ticket items included engagement rings (at an average of $5,598), reception bands ($3,469), flowers and other decor ($2,069) and wedding photos ($2,440).

Of course, much of the cost depends on location. "If you live in a big city you can expect weddings to cost more," said TheKnot site director Anja Winikka.

Couples who got hitched in Manhattan spent the most, at an average of nearly $87,000, up $10,000 from the year before. Meanwhile, newlyweds in Utah and Idaho spent the least, with average spending in both states falling below $17,000.

Several thoughts here:

• $30k? Really? Every year it just seems so unbelievable. (In case you're wondering, honeymoon costs are not included.)
• Food and venue alone cost over $13k, so there's almost half the cost alone.
• The engagement ring costs look like they are below the "two months' salary" that the jewelry industry pushes.
• Every other cost seems high as well. I think once you say, "We need this for a wedding," prices shoot up 50%. For example, if you need flowers as a gift for mom, it's one price. If you need the same flowers for a wedding, it's 50% more. I don't know if this is fact or hearsay, but I have heard places do mark things up for weddings.
• And we have yet another way large cities are more expensive!
• I'm surprised that the lowest-cost states still have $17k averages. Ugh.

Here's how we kept costs down to a couple thousand dollars:

• We had a chapel for free (we gave the church a donation though).
• We skipped a fancy reception place. Just rented a restaurant and had a limited guest list for a luncheon (cheaper than dinner.)
• Our engagement ring was well over $5k, but was appraised at twice what I paid for it (I knew a guy who got me a good deal).
• We didn't have a band or even a DJ. I can't remember if we even had music. I don't dance.
• We certainly spent nowhere near $2k on flowers and decor (we had simple homemade centerpieces). I'm not sure what we paid the photographer.

We're going to offer our kids a choice for their weddings. They will get a set amount of cash. They can spend it on a wedding or keep it for something else (splitting it however they like). Has anyone else done this? What did your kids decide?

The Cost of Being a Bridesmaid

Here's an update on an issue we've covered before -- the cost of being a bridesmaid. A summary of the situation from CNN:

After adding up the cost of the dress, accessories, travel expenses, wedding gifts and more, WeddingChannel.com found that it costs about $1,695 to be a bridesmaid. The estimate was based on a 2010 Real Weddings study that surveyed more than 20,000 brides nationwide.

The highest expenses include travel to the wedding, shower and bachelorette party, which each can cost an average of $300.

Really? $1,700? Is this really "average" or is it inflated (like the "average" costs of weddings) by the high-end side of the sample? Any of you ladies care to comment?

Here's a better idea. Let's say you want to have four bridesmaids. Instead of having them each shell out $1,700, suggest that you save them $700 by having each of them simply give you $1,000. They save money and you get $4k!!!! Ka-ching!!!

Ok, I'm guessing most people wouldn't like the suggestion, but still, it's an option. ;-)

Seriously, has anyone spent close to (or over!)? $1,700 to be a bridesmaid in one wedding? And for the rest of you, are there any money saving tips you have for decreasing the cost of being a bridesmaid?

Five Numbers You Need to Know Before You Get Married

Yahoo lists five numbers you need to know about your potential/future spouse before you get married as follows:

• Credit score. A score of 700 or more [is good.]
• Risk Quotient. A money personality [test from] Rutgers University.
• Net Worth
• Savings Rate
• Emergency Money

My take on these:

• Looks like a GREAT list to me.


• I think even if someone "scored poorly" on this list, that a potential spouse could be ok with it as long as the other was making strides to correct past behavior. But someone with poor performance who didn't care and showed no signs of changing would be a huge red flag IMO.


• I didn't know any of these about my wife before we got married (I'm not sure I knew most of them about myself before we got married!) But I lucked out and my wife was better on all of them than I was.


• Do people really look for this information prior to marriage? If they're thinking straight they do. But doesn't the lovey-dovey romance stuff often make people forget the practicalities prior to marriage?

How about you? Did you know these about your spouse before you got married? Or if you're not yet married, are you planning on finding these out ahead of time?

Money Commandment #9

The book The 10 Commandments of Money: Survive and Thrive in the New Economy lists money commandment #9 as follows:

The old-school rules: The husband should be in charge of the money. The wife should live within the budget he sets.

The bubble economy rules: Talking about money isn't worth the fight. As long as it keeps coming in, it'll work out somehow.

The new rules: One spouse should be in charge of day-to-day money management, but both need to agree on goals and keep to the budget.

My thoughts on this subject:

• "As long as it keeps coming in, it'll work out somehow." Isn't that the motto of about 90% of American families? ;-)
• My wife and I are both active in the managing of our finances. I mostly play offense and she mostly plays defense.  
• As for day-to-day stuff, I handle that and track everything via Quicken.
• One key early on in our marriage that kept discussions about money always positive was that we developed personal accounts, amounts that each of us could spend however we wanted without asking the other. No we have such a good handle on our spending (and our impulses!) that we don't need personal accounts.

How about you? Do you have any money tips that work especially well for you and your spouse?

Over $1k to Be a Bridesmaid?

As a guy, I've never been a bridesmaid (of course.) So I was surprised when Main Street detailed the cost of being one as follows:

According to the Wedding Report, a bridesmaid can expect to spend an average of $1,009 on everything from dresses to traveling for a wedding.

And from another source:

The following estimates on what bridesmaids pay:

• Engagement gift - $50
• Shower gift - $50
• Wedding gift - $100-$150
• Travel to shower - $300
• Travel to bachelorette party - $300
• Travel to wedding - $300
• Dress - $150
• Alterations - $50
• Lingerie - $50
• Shoes - $75
• Jewelry - $60
• Hair and makeup - $100

All together the costs total $1,385

My thoughts:

• First of all, wow! Who knew it was so expensive? (Probably you ladies did.)
• Many of these expenses would be incurred anyway -- if you went to the wedding but weren't a bridesmaid, right? You'd still get them gifts, you’d still travel to the wedding, and so on.  So you really only have from the dress on down as extra costs. These add up to $485 (which is still a lot, but not as impressive as almost $1,400.)
• Someone is giving way too many gifts. Really? Do you give $200 to $250 in wedding gifts to a couple? We don't.
• Aren't some of these overpriced? Hair and makeup $100? And why do you need to buy new jewelry? And what if you're within driving distance to the wedding, shower, etc.? Then those costs go down big-time.
• Looks to me as if you'll spend $400 to $500 extra to be a bridesmaid and another $500 to $750 to attend the wedding and related events. If you have a couple of these per year, the costs can really add up.

What's your take on these expenses? Too high? Too low? Anyone out there had recent experience being a bridesmaid?

Would You Marry for Money?

Smart Money lists 10 things your spouse won't tell you and includes this when discussing marrying for money:

Both men and women are ok with a little gold digging. Two out of three women and half of men said they were "very" or "extremely" willing to marry an average-looking person they liked, as long as he or she had money, according to a survey of more than 1,100 people by wealth research firm Prince & Associates. As men get older, they're more likely to say they'd marry for money (61% of men in their 40s would, compared to just 41% in their 20s), while women were most likely to want to get hitched for cash in their 30s. And these money chasers don't come cheap: The average one demands a partner with an average net worth of $1.5 million, according to Prince & Associates. And maybe it's not gold digging at all, but just good sense. Sociologists Pamela Smock, Wendy Manning and Meredith Porter, for example, found that nearly three out of four cohabitating people say that economic factors like money, jobs or assets played a role in their decision to marry their spouse.

It's an interesting point/question, huh?

So, would you marry for money? Or would you marry someone (supposedly much better looking) who you knew was marrying you for your money?

Here's what I would do if anything ever happened to my wife:

• Would I marry for money? Maybe, but it would have to be an awful lot of money. I'm already well off enough that I don't need/want to marry for money. But if a person I liked that was at least somewhat attractive and had $20 million or so, perhaps I would consider it. But it's hard to say. And to be clear, there's no amount that would make me marry someone I didn't like and think was at least somewhat attractive.
• Would I marry someone who I knew was marrying me for my money? No, I wouldn't. At least I don't think I would. But the question is -- how would I know? Does anyone really know someone is marrying them for their money?

So, would you marry for money? Or would you marry someone who you knew was marrying you for your money?

Six Money Issues that Can Kill Your Marriage

MSN Money says that couples fight a lot about money (FYI, they fight about money twice as much as they fight about sex) and lists six marriage-killing money issues as follows:

1. Debt
2. Personality conflicts
3. Power plays
4. Sorting out mine, yours and ours
5. Having children
6. Dealing with the in-laws

Here are some thoughts on these:

1. Yes, debt is a killer in many ways. That's why it's on my list as one of the worst financial moves anyone can make. I had a bit of debt when we got married (I don't think my wife has ever had much debt), but we paid it off and haven't looked back since. We agreed we wanted to be debt free and even paid off our mortgage over a decade ago. So there's been no debt to fight over for years and years. ;-)

2. I think there are always personality conflicts, so there are bound to be disagreements. Ours come mostly in the area of giving and savings (my wife wants to give more and save less, I want to save more and give less.) I think we already do well with our giving (25% to 35% of our income depending on the year) while she thinks we're saving too much (more than we really need.) So we reach a middle ground that neither one is happy with 100% but that we can both live with.

3. No power plays for us. We view all income, assets, expenses, etc. as "ours" not "mine" or "hers". There's no way to do a power play in that environment.

4. As noted above, there is no "yours" or "mine" -- everything is "ours." We have had personal accounts for much of our marriage though. With these we each can spend a pre-determined amount over a year (for things we want for ourselves) without input/advice from the other. These days we have enough control over both our spending and our desires that even personal accounts are not needed.

5. Don't you talk about whether you want kids (and how many) before you get married? If not, yikes!!!!

6. My wife's mom died before we met and her dad passed away several years ago. On my side, none of the parents have needed (or asked for) any sort of money. We have helped out family members here and there, but we've always discussed it in advance and decided together who gets how much, when they get it, etc.

How about you? Are any of these (or something else) issues in your marriage?

The New Rules of Engagement Ring Shopping

The MintLife blog lists the new rules of engagement ring shopping as follows:

1. Feel free to flout tradition. The traditional rule of thumb was that the groom should plan to spend anywhere from one to three month’s salary on the engagement ring. But as priorities shift, that rule has fallen out of favor. Diamonds and a traditional gold or silver band are no longer de rigueur either.

2. Consider lifestyle. A large diamond solitaire may look impressive in the store, but it may not be practical for daily wear, especially if the wearer is active.

3. Learn the 4 C’s. Since the diamond is usually the most expensive part of the ring (“it’s hundreds of dollars for the band, and thousands of dollars for the diamond,” says Garrett), some couples choose alternate stones or a decorative band instead. But if you’re set on a diamond, you’ll want to familiarize yourself with the 4 C’s, as developed by the Gemological Institute of America (GIA): carat, clarity, color, and cut.

4. Give yourself time. Just as some people have no trouble finding “The One” and others spend most of their lives searching, there’s no prescribed timeline for shopping for an engagement ring. It’s safe to say, though, that you probably won’t find what you’re looking for in a single afternoon.

My comment on these:

1. That whole one to three month's salary thing has always been ridiculous to me. Who made it up anyway, the diamond industry (that would be my guess)? As for a non-diamond stone, if my wife was willing to go for something different when we got married, I would have. But we're sort of traditional anyway and went for the diamond.

2. This is a very good point. A huge diamond can bee unwieldy -- especially on a little hand.

3. Is this really new? These are supposed to be the "new" rules. Seems like the same old stuff here.

4. Is this new too? Did people used to go out in one day and get a ring -- and now they shop around? It's been so long since I've purchased an engagement ring that perhaps I'm out of the loop.

If I was doing it all over again, I'd have a conversation with my wife-to-be and try to decide what we thought was the best option together. Then we'd pick out the ring together. I know, it kills the "surprise" factor, but seems much more reasonable to me. Just call me Practical Peter. ;-)

How about you? For those of you who are married, how did you select your engagement ring -- and would you do it the same way again? And for those of you not yet married, what are your plans for buying an engagement ring?

How to Become a One-Income Family

Last month I shared a real-life example of going from two incomes to one and gave a few thoughts on how to make this happen. MSN Money goes one step further and gives us five steps to becoming a one-income family as follows:

Here are five basic steps to downsize from two incomes to one:

Step 1: Look at your finances -- and look HARD
Step 2: Redo your budget
Step 3: Live on the single paycheck
Step 4: Look for other ways to make money
Step 5: Communicate -- and perhaps reconfigure

Here's how we did it:

• Both spouses work for a period of time.
• The family lives well below their means, creating a good amount of excess cash.
• This money is used to pay off all debt (including a mortgage) so that monthly expenses are lowered even more.
• One spouse quits work and focuses on keeping expenses low (doing most of the shopping.)
• The other spouse focuses on growing the family's most valuable financial asset.
• In addition, some side income can be developed if needed to smooth the transition from two to one income (until the one career really takes off).
• From there, the focus remains on continuing to grow the family's income while keeping expenses low.

15 years later it seems like it's worked out pretty well.

Let's face it, the basics for becoming wealthy are fairly set and you need to follow them whether it's with one income or two, right? It's just that focusing on growing your income is especially important in the case where your family is relying on it completely for their support and well-being.

10 Tips You Are Dating a Gold Digger

Here's an interesting post that lists 10 times you might be dating a gold digger as follows:

• Pricey gifts are the only kinds that please her.
• She’s inquiring about your financial status as if she is a lender.
• Her looks get her perks and she practically abuses the privilege.
• She has a high standard of living and refuses to compromise it.
• Her previous relationship list looks like a resume with increases on every step.
• She has the attitude that she always deserves the best.
• Her body is perfect, her clothes and accessories are designer, and she never misses a salon treatment.
• Things seem to be moving fast…too fast.
• She readily dismisses other women, especially those with similar or higher status, looks, or sense of fashion.
• Always needing money yet always spending it.

The piece says that if even half of these things are true about the woman you are dating, chances are she is a gold digger. Ha!

Needless to say, this is not an issue I (or most people most likely) are familiar with from a first-hand perspective. The closest I've been to a situation like this was when my great aunt died and left a boatload of money to my great uncle. He was 70 or so and a "younger" woman (in this case a 60-year-old who wasn't that attractive -- not a bikini-wearing, bombshell, 22 year-old as most of us usually imagine when thinking of a gold digger) seemed to show up and marry him out of nowhere (apparently for his money -- trust me, it wasn't his looks, charm, or personality.) But what business of it was mine anyway? He seemed happy. (FYI, this was a decade or so ago and he's now passed.) He had no children, so there were really no family problems as a result.

I'm guessing that the "gold digger" issue comes up more frequently with second (or later) marriages. The guy is older, well off, and either divorced or widowed. A younger, attractive female shows up, a relationship develops, and soon they are married. The problems arise mostly when the kids feel like their dad is being cheated/used and that they are then going to lose some/all of their inheritance. Anyone seen something like this happen?

Tacky or Thrifty?

Here's an interesting money-related issue for everyone to weigh in on from Coupon Sherpa:

Is it considered tacky or thrifty to use a coupon on a first date?

So far, "tacky" is a bit ahead, but it's pretty close.

My thoughts:

• I'm married, so this is all hypothetical for me. But if I was dating my wife for the first time at this stage in our lives, if I didn't have a coupon, I know she would. ;-)
• Personally, I think it's a bit tacky and I wouldn't do it on the FIRST date. Maybe on later dates, though.
• If I was asked on a date and someone paid for me using a coupon, I wouldn't mind. In fact, I would see that as a positive sign. After all, both spouses need to be frugal for the couple to be successful financially -- so I'd see this as indicating a potential spouse had the "right stuff" (in at least one key area).

That's my take on the issue. What's yours?

Would You Marry Someone Deep in Debt?

Here's a piece by Yahoo (from the NY Times) that talks about how debt can destroy a budding relationship. I posted this a couple weeks ago on Facebook (click here to see FMF on Facebook) but thought it would be worth discussing here as well. But first, let's set the scene. Consider this situation:

Nobody likes unpleasant surprises, but when Allison Brooke Eastman's fiancé found out four months ago just how high her student loan debt was, he had a particularly strong reaction: he broke off the engagement within three days.

Ms. Eastman said she had told him early on in their relationship that she had over $100,000 of debt. But, she said, even she didn't know what the true balance was; like a car buyer who focuses on only the monthly payment, she wrote 12 checks a year for about $1,100 each, the minimum possible. She didn't focus on the bottom line, she said, because it was so profoundly depressing.

But as the couple got closer to their wedding day, she took out all the paperwork and it became clear that her total debt was actually about $170,000. "He accused me of lying," said Ms. Eastman, 31, a San Francisco X-ray technician and part-time photographer who had run up much of the balance studying for a bachelor's degree in photography. "But if I was lying, I was lying to myself, not to him. I didn't really want to know the full amount."

It's hard to tell why he broke off the relationship. Potential factors:

• Perhaps it was the fact that she had $170k in debt (as the article wants us to believe.)
• Maybe it's because he felt lied to and couldn't trust her. And who wants to marry someone they can't trust?
• Perhaps it's because he saw her as a spendthrift -- someone unable to control her spending. Which, as we all know, is a very serious money mistake.
• It could be because he found out how stupid she was. She didn't really know how much she was in debt? Come on! Give me a break!!!
• Or it could be stupid option #2: racking up $170k in debt for a bachelor's degree in photography. Ugh.
• Or maybe it was simply something else.

Let's move on to example #2:

These were the questions that weighed on Kerrie Tidwell. A third-year student at the Medical College of Georgia and an aspiring emergency room doctor, she doesn't worry so much about her ability to pay back her loans.

Ms. Tidwell, 26, is involved in a serious relationship with Stefan Kogler, an architect who is a native of Austria and living in Vienna. To Europeans, who often pay little or nothing toward their university studies, the idea of going deeply into debt to get educated is, well, foreign.

Ms. Tidwell feels no guilt about the $250,000 in debt she will probably run up, including some from a master's degree program she completed in London, where she and Mr. Kogler met. "I didn't acquire it because I go out and shop a lot," she said. "It's because I'm doing something that I'll love for the rest of my life."

Still, if she and Mr. Kogler are going to move in together and get engaged, she wants their financial arrangements to be clear and fair. But how do you define fair when you're bringing a quarter of a million dollars in debt to a relationship?

Ok, so these scenarios leave us with some questions. For instance:

• Would you marry someone who was deeply in debt (however you define "deeply")?
• Would it make a difference if they were in debt from over-spending or had little to show for it versus if they had something valuable like an education as a doctor?
• If you would go ahead with the marriage, would you try to make sure they were responsible for the debt in case the marriage didn't work (by using a pre-nup)?
• Does it not really matter? If you really loved the person, would debt even be a factor?

Personally, it would give me a cause for concern, especially if the person had spent the money simply by over-spending. And even if they had a doctor's education, I'd still have to consider if that education will pay for itself (what happens when the woman above decides to have kids and wants to stay home -- the income is gone but the debt remains)? So the short answer for me is that yes, deep debt would have a role in my decision whether to marry someone or not.

But luckily for me, I don't have to consider that option. I'm already married to a wonderful woman. And she knows how to handle money too (which is, BTW, a key element in any couple being wealthy -- BOTH of them need to manage money well.)

How about you? What's your take on this issue?

Are You A Secret Spender?

The Wall Street Journal asks if you are a secret spender -- if you're hiding purchases from your mate. Apparently, many people do:

According to a recent American Express Spending & Saving Tracker of more than 2,000 adults, 27% of respondents have “misrepresented the amount of a purchase” while 30% said they have hidden purchases from their partner.

But wait, it gets humorous. Check this out:

To keep spending under wraps, consumers responding to American Express’s survey have gone as far as:

• burying their purchase in the backyard
• pretending that goods came from Goodwill
• hiding purchases in grocery bags to bring them home
• arranging for items to arrive while their partner was away
• sneaking out and bought an item in the middle of the night

Ha! I love the Goodwill ploy!!!! ;-)

For the most part, everything I buy is known about by my wife as I purchase it or soon thereafter. I have, on occasion, hidden a purchase in a grocery bag to bring them home, but I tell her about the item(s) soon thereafter (you know, when the moment is "right".) ;-)

In addition, these are small purchases -- in the $50 range at most. $250 or so is the max I'd spend on something without talking to my wife and it would have to be a GREAT deal. $100 is more like the top end amount for regular purchases.

Now whether or not my wife is a secret spender, well, I guess that could be a secret. But since I see the checkbook and credit cards (and there's no way to get cash except through our checking account), I would say she is not.

How about you? Are you a secret spender?

The Money Issues Spouses Disagree On

Crosswalk lists the following as the most-frequent money disagreements among spouses (among respondents who report financial disagreements):

• How much we should spend on various items: 49%

• How much debt we should carry: 33%

• How much we should keep in savings for emergencies: 26%

• How much we should invest: 15%

• How much or where we should donate money: 10%

My wife and I discuss these, but I wouldn't say we have disagreements over them. We're pretty much on the same page as I'm sure you can tell from reading my various posts on the subject.

But as we know, money creates stress and I'm sure some of this stress (if not much of it) comes from disagreements between couples on what should be done with their finances. I've read and heard that differences on money are one of the leading causes of divorce -- and I believe it. Opposites often (usually?) attract, and when a saver marries a spender or an investor marries a spender or a debt reducer marries a spender, there's going to be trouble. (hey, notice any patterns in that last sentence?) :-)

Do you have any disagreements over money with your spouse or significant other? If so, what are they about?

Financial Questions to Discuss Before Marriage

Yahoo lists four financial questions couples should discuss prior to getting married as follows:

1. What Are Your Assets and Liabilities?
2. What Is Your Money History?
3. How Should We Divide Financial Duties?
4. Do We Combine Accounts or Operate Individually?

I've told you all before that my wife and I lucked out in this area -- we are totally financially compatible and see eye-to-eye on most money management issues. But we didn't discuss finances at all before marriage (like most people) -- at least not in very much detail -- and ran the risk of a major disaster if we had been completely different from one another in this area (as many couples are.)

As for the above list, here's how we work the two issues that remain parts of how we manage money:

• We divide financial duties into roughly these groups: my wife plays great defense, helping us keep our spending low. She also manages all of our healthcare-related forms, expenses, etc. I handle most of everything else (record keeping, investments, taxes, etc.) as well as concentrate on playing great offense (i.e. making the most of my career.) I play decent defense too. We make all "global" financial decisions together.

• There was never a question for us -- all of our accounts are held together. I can't imagine a marriage where I had "my money" and she had "her money." Ugh. That just sounds brutal to me. Now we have set up personal accounts so each of us can buy some things we want/like without the other's opinion being needed, but they aren't a really big percentage of the budget. And as we've gotten older and now have much of what we need, we never spend the full amounts in our personal funds anyway.

How about you? How do you (or how do you hope to if you're not yet married) divide the financial duties? And do you go with joint or individual accounts?

Three Common Questions about Getting Financially Naked

The following is an excerpt from Get Financially Naked: How to Talk Money with Your Honey.

When is it okay to bring up money with my mate? Is it okay to do it when we are just dating?

We believe the earlier the better. That said, our intention is NOT to cause your sweetie to freak out on a first date by bringing up the subject of the thousands of dollars of credit card or student loan debt that you (or McDreamy) are hoping to pay off. Our point is simply that once you can see yourself getting serious with your potential mate, we believe it’s time to start talking about money.

As to the exact timing, again, it really is up to the unique nature of your particular relationship. For instance, if you are wondering how your mate can afford the fancy Vegas vacations and high-priced meals on a teacher’s salary, it’s reasonable to bring up money early on. Or if you have some financial hiccups of your own, we believe it’s important to come clean earlier rather than later. We’ve heard of all too many seemingly promising relationships that end when, after an extended period of dating, one partner discovers the other is deep in debt. Typically, this issue is not so much the debt, as the fact that it was not discussed early on. When you start to Get Financially Naked, you’ll learn a lot about your financial compatibility simply by seeing how your honey responds to your bringing up the topic of money.

What if I know my partner is not receptive – or I find out during the conversation that my partner is not receptive – to talking about the topic of money?

Just because you get an initial cold shoulder doesn’t mean you two are doomed in the financial harmony department. Our recommendation is to tee up the conversation by talking about your views on money, and seeing if you can ease in with the Financial Foreplay questions from Chapter 3. The key is this: Don’t give up and be persistent. Your mate’s reluctance to discuss money could simply be a sign of painful, but resolvable, issues in their money history (recall the exercise you did in Chapter 2 about your money history and what you learned about yourself). A cold shoulder does not mean it is okay to just ignore the conversation about money. It means there are some underlying issues that, if explored, may actually bring you closer – emotionally and financially.

As you approach the topic of money with your honey, if your partner is reluctant to talk about money, you’ll want to be very sensitive to how you respond to anything that does bubble up. Money is a hot button for many people. When your partner does begin to open up, it is essential that you listen and be supportive to whatever is said. There will be plenty of time down the road to discuss areas of disagreement or places where compromise is needed.

My partner is wonderful, loving, and very generous toward me. However, I’m worried be cause the math just doesn’t seem to add up. When I look at what my mate does for a living, it doesn’t appear to be the type of career with the salary level necessary to pay for the kind of lifestyle my partner leads. How do I bring this up?

The harsh and sad truth is that literally millions of Americans, at all ranges of the income spectrum, live beyond their means. They bridge the gap between their income and their expenses by running up hefty balances on their credit cards or taking equity out of their home. If this is how your mate is funding his or her lifestyle, you owe it to each other and the integrity of your relationship to know about it. Maintaining a lifestyle beyond your reach using credit is not sustainable and typically ends up resulting in severe financial distress – not to mention the possibility of being hounded by bill collectors or ending up in foreclosure. One way or another you two will end up discussing your finances. Your goal is to do so before it torpedoes your relationship.

You know it’s time to Get Financially Naked when . . .

Here are some classic signs: Your partner wants to spend more and you are borrowing money from your family to support this lifestyle. You look at how your partner’s family lives and it doesn’t seem to add up, which may be a red flag that your partner has been trained to live beyond his or her means. You start wondering about your household financial facts and you encounter resistance. For example, your partner says everything will be okay and there’s no need to worry about it. There are many more signs, but here are three that indicate it’s time to make talking money with your mate a top priority.

Marriage and Wealth

In the book The Difference: How Anyone Can Prosper in Even The Toughest Times, author Jean Chatzky lists some interesting information from a 2006 study published in the Journal of Sociology as follows:

Married individuals had nest eggs 93 percent larger than single or divorced folks. (Divorce is its own wealth negator.) Moreover, married couples saw annual increases in their wealth of 16 percent, double the increase of singles.

So why is this? Chatzky attempts to explain:

In part, that's the cost of living talking -- the impact of economies of scale. It's also because people who are married have reasons beyond themselves to produce. They are working for the betterment of their growing family, with common goals such as paying down debt, buying that first (or larger) home, paying for college education, supporting charities they believe in, retiring comfortably, and eventually passing a chunk of wealth along to their heirs. Married or coupled folks also have, in their partners, built-in sanity checks on their spending. If one partner treads too close to the line, blowing the budget on clothing or technology, the other is there to rein him or her in.

One thing she doesn't mention is income. Are married households more likely to earn more than non-marrieds because at least some of them have two-earners in the family? If so, this could explain some of the difference.

That said, there's no denying that two can often live cheaper than one. Couples share a wide variety of expenses that would cost two individuals twice as much (real estate taxes, home maintenance costs, etc.) And yes, there's that "check" that goes on in spending (assuming the couple decide at least major spending issues together). As we've discussed so many times here, if you can keep your spending under control, you go a long way towards growing your net worth. And it appears couples have a built-in method for at least controlling some of their spending, so they start off with an advantage.

I also buy the "working for a higher goal" argument. I know we keep spending low and savings high -- and part of that is so we can provide a college education for our kids. We (obviously) make decisions on what to buy and not buy based on the good of our family. How could we not? As such, that likely contributes to our net worth in a positive manner.

One last thing I would add that could be influencing these results: two people are often smarter than one. Yes, there are exceptions, but in general almost any two people (IMO) will make better decisions on what to buy, save, invest, etc. than one person alone. Two people have different perspectives and often make up for the other's lack of insight, intelligence, or "blind spots", helping them to ultimately come to better financial decisions.

That's my two cents. What's your take on the issue?

Update on Jim Nantz

Ok, this is a bit old (I have been posting ahead a bit since vacation is looming), but I wanted to follow-up on my post listing money lessons from sports announcer Jim Nantz. Here's a summary of the divorce decree:

• CBS sportscaster Jim Nantz must pay $916,000 yearly in alimony and child support to his ex-wife and give up their Connecticut home under terms of a newly issued divorce decree.
• Under the ruling, Nantz must pay $72,000 in alimony monthly until he dies or his ex-wife remarries, and another $1,000 weekly in child support for the next two years.
• Lorrie Nantz will get their home and a separate condominium in Westport, while Jim Nantz will get their home in Houston and a luxury condominium in the Deer Valley ski resort in Park City, Utah. They were awarded joint custody of Caroline, 15.
• He also must pay Caroline's college expenses until she reaches 23 years old and has to split various joint accounts with Lorrie Nantz, including the current value of his pension through the Screen Actors Guild.
• He also must keep his ex-wife listed as beneficiary of a $3 million life insurance policy while he's still paying alimony and/or child support, and pay $70,000 so she can join any country club of her choice.
• She had been seeking more than $1.5 million in yearly alimony and child support.
• Court documents cited Jim Nantz's $3.2 million salary from CBS and other assets, including millions in other income, shared investment accounts, real estate and other property.

Yep, divorce is very costly. While Jim will still have plenty left over, his net worth is taking a big hit on this one.

And it appears he's headed into more financial issues with his new girlfriend. Here's a recent quote from her:

"I have champagne taste on a beer budget . . . I love what I do, but the bottom line is that I’m not making enough to pay for myself.”

Yikes! Out of the frying pan and into the fire!

Who Earns More in Your Marriage?

Here's a piece from MSNBC that says women are increasingly earning more than their husbands. A few of the stats they share:

• In 2007, 25.9 percent of wives were earning more than their husbands in households where both spouses work, according to the most recent data available from the Bureau of Labor Statistics. That’s up from 17.8 percent two decades earlier.
• Among all married couples, including those where the husband isn’t necessarily working, 33.5 percent of women were making more than their husbands, according to the 2007 data.
• The recession has likely exacerbated the trend; nearly three-quarters of the approximately 7 million people who have lost jobs in this recession have been men. The unemployment rate for adult men stood at 10.3 percent in September, compared with 7.8 percent for women.
• 65.3 percent of women and 61.2 percent of men strongly agreed with the idea that they are comfortable with women earning more than men in a household.

I'm surprised it's that high -- one-third of women make more than their husbands. Will probably be half of women within the next couple of decades.

So, this information makes me want to ask:

Who earns more in your marriage? Do you have any problems with this arrangement? (no matter who earns more)

Currently, I earn more in our marriage since my wife is home with the kids. But early on in our marriage we were fairly close in salary -- I was $20k or so ahead of her but we both had great careers. But we always planned on her being home once we had kids, and we planned accordingly for it -- living on my salary only. It's been a great arrangement and so far has worked out perfectly.

Now, my plan is that once the kids go off to college, my wife can start her career again and I can retire early! (Just checking to see if you're reading, honey!) :-)

The end of the piece has some information about Michigan Governor Jennifer Granholm who is married to a stay-at-home husband. I couldn't resist this quote:

“He's actually better at parenting than — than I am,” she said.

My guess is that he'd be a better governor too (no, nit because she's a woman, because she's a buffoon killing our state) -- but that's for a different post. Thank God for term limits...

Marrying Your Financial Opposite

Here's a piece from MSN Money that says most people marry their financial opposite. They break the situation down as follows:

• Most people say their ideal mate would be someone whose money style is similar to their own.
• Despite this preference, people tend to marry their financial opposite. The more conflicted people were about their own spending habits, the more they tended to choose partners with the opposing tendency.
• Those who do marry their financial opposite tend to experience more conflict and "diminished marital well-being."

Fortunately for me, my wife's money style is similar to mine -- or at least in the same direction. I'm frugal. She's more frugal. We both like to save. We both like to give. We both hate debt. And on and on.

We have never had a fight about lack of money, how we're going to pay off some sort of debt, or that I bought this or she bought that. Of course it's not all candy and roses. We have had "discussions" over long-term goals (primarily how much we save -- I think she doesn't understand how much it takes to retire and she wonders if we're saving too much and should give more instead), but generally we're on the same page when it comes to money management.

I can tell you, it's been a great blessing for us to see eye-to-eye on handling money -- it takes one of the top (if not the top) reasons for trouble in marriage out of the equation for us. Which in turn leaves us time and effort to fight about the really important stuff in life like squeezing toothpaste from the bottom versus the middle or what type of snacks we buy at the grocery store. :-)

As I've said before, we both lucked out in marrying someone with similar money habits since we didn't really talk about the issue before we got married. I'm guessing that's the same for most people -- they don't talk about it before marriage -- but then they end up with a spouse who thinks totally different about how to handle money. Then soon after they're hitched, the problems start. Ugh.

How about you? Did you marry your financial opposite? If so, how do you deal with it? Or if you're not married, do you plan to talk about this issue if you do decide to tie the knot?

Money Lessons from Jim Nance

If you watch even a bit of sports on TV, it's likely that you've seen announcer Jim Nance. Well, he's in the news again, this time not for his on camera ability but because he's going through a messy divorce. It's a good reminder for us all that a divorce can have a substantial negative impact on one's net worth. So you better choose wisely when you get married.

Several financial issues stood out to me from the article linked above. Namely:

• Money is part of the reason for the split: "He maintained that the marriage ended as a result of his wife's lack of support for his career and her excessive spending."
• He makes a boatload of money: "He is attempting to protect much of his $7 million plus a year earnings."
• Is it really $7 million a year he earns? This adds up to more than that: "In addition to his $3.9 million annual salary from CBS, Nantz also makes $4 million in deferred compensation, which includes money he gets as the 'voice' of Titleist golf products."

• Did I mention that divorce is costly?: "His wife is seeking alimony for herself and child support for their 15-year-old daughter, Caroline, in excess of $1.5 million a year. She also wants to keep their six bedroom, six bathroom house on Imperial Avenue in Westport."
• Who you marry will impact your career: "In 2007, Nantz said he was offered $7 million to host the CBS Early Show, but turned it down because his wife opposed it."
• More on her spending problem: "He testified that while he was traveling around the country broadcasting sporting events, his wife was home spending vast sums of money. In nine years, she spent nearly $1 million at Ed Mitchell, a high-end clothing and jewelry store in Westport."
• She appeared to keep some financial things to herself: "And Lorrie Nantz admitted she often went shopping at Ed Mitchell, which is about a mile from their home. She has two accounts there, one in the couple's name and one under her maiden name, which she said she assumed her husband knew about."
• Is she a shopoholic?: "Just last month she purchased a $12,000 necklace at the store. But she admitted she couldn't recall what it looked like. 'I think it has some sort of stone,' she testified."

I'm not blaming her for the divorce (he had a mistress, after all!), simply highlighting the money-related issues associated with this break up. What a big mess!

Again, choose very carefully who you decide to marry since that decision will have a major impact on your ability to generate wealth. I'm not saying to select a mate based only on financial issues (heaven forbid!), just recognizing that it's one major factor to consider before you take the leap into marriage.

Handling Money and Marriage Issues

The following is a guest post from Neal Frankle, the author of Why Smart People Lose A Fortune.  He also blogs at Wealth Pilgrim.

Can you live with a spouse or partner who is super frugal if you aren’t?

It’s tough.

Of course frugality is important, but sometimes folks take it too far.  If you live with such a person, you already know what I’m talking about.  My wife knows this problem far too well.

For the first 10 years of our marriage, there were times when I lorded over our spending. I am not really proud of that era, but I must admit I needlessly created unhappiness with my miserly ways.  This was not a case of a simple disagreement.  It was a fundamental difference that was leading to a very bad outcome.  This was clearly my problem - not her’s.

She didn’t threaten me…she didn’t have to.  I knew I had to straighten up. Thankfully, we worked the problem out.

But what do you do if your spouse doesn’t get it?  Worse, what if your partner calls you a spendthrift just for turning on the lights?

Of course, one solution is to call your divorce attorney but I’m not a fan of that - too expensive.

I think there are other alternatives that can save you from making that call.

Here’s a 4 step approach you can use that may help resolve the problem:

1. Determine if the frugal behavior is really over the top.

This is actually the hardest step of all.  It’s very subjective.  Your partner might be irrationally hording or just living the life s/he wants to live. Also, s/he might be justifiably trying to get out of debt or build savings.

Here are a few questions you might ask yourself to determine where the real problem lies:

• Is your income less than your monthly expenses? 
• Is your credit card balance increasing every month?
• Are you borrowing money from friends?
• Are you unable to hit your savings goals?

If you answered “yes” to any of these questions, it might make a lot of sense to be extremely frugal.  If your family is in debt and not making ends meet, your partner’s frugal spending might not be the problem.

Having said that, just because you need to take drastic action doesn’t mean you have to shut off the electricity. 

Figure out how much you need to cut in order to reach your goals and then calculate if the measures your partner suggests are meaningful.  This is a question of balance and like I said, it’s subjective. Often, having a third-party mediator can work wonders here. If you do seek out a third-party, I’d suggest a therapist or trusted friend.  Approach this in an open-minded way.  Don’t go with the mindset of convincing your spouse how off they are.

Your partner might be super frugal even if you aren’t in debt.  If so, something is driving him and you need to find out what it is.

2. Acknowledge your mistakes.

You partner might be very frugal because that’s the lifestyle they prefer as I said.  On the other hand, it might be because they have some deep rooted fear.

If so, they probably get angry at the way you spend money.

Own up to anything you’ve done that has contributed to your partner’s discomfort.  If you skip this step, you’ll never get anywhere.

Let’s assume your wife is the super frugal one.

Did you spend money without considering her feelings?  Even if you spent money wisely, if you agreed to discuss all expenditures before making them and then didn’t live up to that, you broke your agreement. You should own up to it.  Remember, your partner might be in fear and unless you make it safe for her, you’re not going to find a solution.

At the very least, admit how your spending made your spouse feel uncomfortable.   Notice…I didn’t say you spent money recklessly or unnecessarily. I just said that you acknowledge how she felt about your spending. 

This step could really help solve the problem. 

Again, the reason some people are overly cheap is because they are afraid.

What are they afraid of?  You have to ask them to find out. 

If they are uber-frugal, it may have nothing to do with what is going on in the present and everything to do with the past.  In order to find a solution, you have to get your partner into the present.  The best way to do that is to assuage her fear.  To do that, admit your part of the problem. It lets her know that you are on her side and she doesn’t have to be on the defensive. She’ll be more willing to open up as well.

3. Understand and acknowledge the fear.

Once you admit how you’ve contributed to the problem.  You might ask how she felt when you did what she dislikes.

She will probably tell you she was afraid.  If so, ask her what she was afraid of.

This is the key.  Once your spouse tells you what they afraid of, you have a rational issue to deal with.

4. The Budget is the Solution

If in fact your partner has reasonable fears, work out a budget to deal with those issues. 

For example, when I first started my business I was very afraid of it failing.  That was a rational fear.  Since I was the only one working, if the business failed, we’d be out on the street.

We worked out a budget that allowed us to save an amount I was comfortable with. Once we achieved our savings goals, I felt safe and was very willing to loosen up on other spending.  To be honest, just knowing that my concerns were being addressed helped me loosen up.

But let’s say you aren’t in debt, you are saving and your spouse remains ultra-frugal despite the steps I suggested above.

If you can live with it, fine.  There is nothing wrong with it.

But if this is a lifestyle you can’t live with and you can’t mutually agree on a budget, go to therapy (if you want to save the relationship). You need an impartial third-party to find balance.

Again, there is nothing wrong with an ultra-frugal lifestyle.  But if your partner’s frugal behavior makes your life unbearable, you’ve got to take action.

Have you tried any of these steps?  Have you dealt with a super frugal person in some other way?  Where you able to find a solution?

When Family Members Steal

The following is a guest post by Jack Busch from MasterYourCard.

It’s a sad fact: family members and friends are some of the most common perpetrators of identity theft and fraud. Residents of your household have easy access to all your personal information - they can easily log in to the family computer or open the filing cabinet in the office. In cases where checks go missing, inexplicable bills appear on statements and seemingly unprompted late notices show up in the mailbox, someone from the household is often to blame. The emotional hurt from this type of incident can be equally as painful as the fiscal repercussions. Because of this, many are hesitant to confront the problem – and with good reason. Here are a few things to consider if you suspect one of your family members or friends is stealing from you.

It’s Time to Re-Evaluate Your Trust

When bill collectors come calling and you swear you never opened the account in question, you’d better make sure you know the score before fighting back. While lenders sometimes get things wrong, the more likely scenario is that someone has opened an account under your name without you knowing it. Before you escalate to the FTC or refuse to pay, take time to investigate when the account was opened and consider whether someone in your household has been using your identity.

This can be difficult. As a family, it’s easy to love each other unconditionally – but that doesn’t mean you should trust someone unconditionally. Wishful thinking makes us want to give our family members the benefit of the doubt. But unseen circumstances for our loved ones – such as runaway debt, drug addiction or entanglement with organized crime – may drive them to compromise their morals. Oftentimes family members intend to “pay you back” as slyly as they “borrowed” from you or justify their actions in other ways. Other times they are simply too ashamed to ask for help. In any case, you need to confront them directly and respectfully. The best approach depends on your relationship with them. Afterwards, take measures to prevent it from happening again, in spite of how profusely they apologize or promise it won’t happen again. Invest in a safe. Change your passwords. And monitor your accounts closely.

Work on Undoing the Damage

There are three fronts to this task: emotional, fiscal and credit. Repairing the first breach is completely up to you and your loved one and should begin with a frank heart-to-heart. As part of this discussion, you should put together a plan to control the damage to your credit rating and to reconcile the money that was stolen.

No matter what you decide, you should close out fraudulently opened accounts immediately as well as pay for any delinquent items. If checks were stolen, contact your bank’s check verification agency and alert them of the check numbers that were compromised and should be considered void.

As for debt that was accrued in your name, it will have to be paid. Given that your family member was driven to stealing in the first place, you’ll likely have to settle these debts out of your own pocket. After that, you can either forgive the debt owed by your family member to you or work out a repayment plan between the two of you.

If discussion with your loved one breaks down, you’ll be faced with another stark reality…

You’re Going to Have to Press Charges

Businesses and credit reporting agencies require police reports or a valid identity theft report in order to address fraudulently opened accounts and negative items on your credit history. That means that in order to save your credit rating, you are going to have to press charges against your friend or loved one. Furthermore, most lenders and credit reporting agencies require an identity theft claim in order to prevent further fraudulent activity. This, of course, is a last resort, but a necessary measure if you want to clear your name. If you are unwilling to take legal action against your loved one, then you are giving tacit approval for their activity, which, in essence, no longer makes it fraudulent.

During your discussion with your family member or friend, be sure to let them know that you will have to press charges in order to salvage your credit rating. This is by no token “selling them out” as, if they respected for and cared about you, they would willingly work with you to close the accounts and repay the debts. Things can get ugly at this stage, but without addressing the problem, it will only get worse.

Confronting a loved one who is stealing from you is a delicate situation that rarely has a satisfying outcome. While the course of action in the eyes of your lenders, the credit reporting bureaus and the law is clear, preserving your relationship and rebuilding trust is a difficult and unique undertaking for each instance. The key is to remain open, be understanding but to stay firm. To prepare yourself, you may wish to read some of the following:

• Oprah’s Guide to Confronting Your Toxic Relationships

• The FTC’s Guide to Identity Theft

• Identity Theft Resource Center (ITRC): Fact Sheet 115 When You Personally Know the Identity Thief – Includes letters to rectify accounts with lenders and to solidify personal agreements

• ITRC: Identity Theft and the Deceased

Six Money Talks to Have Before You Get Married

US News lists the six money talks to have before you get married as follows:

• Your credit histories.
• Whether you want separate or joint accounts.
• Your long-term financial goals.
• Your spending styles.
• Who will do what?
• How will you respond to needy family members?

I think I've mentioned before that my wife and I had NONE of these discussions before we got married. We both happened to get very lucky as none of us had bad credit, tons of debt, and we were agreed on most of the other items as well. I realize that most people aren't this lucky/blessed.

How about you? Did any of you discuss finances (and how much did you) prior to getting married? It seems like it's more common to do so these days (rather than a couple decades ago when we got married.) Is that correct?

Should Women Marry for Money?

Check out this interview that says smart girls marry for money. A couple quotes that give you the flavor of what they're saving:

• We’re not espousing that everyone should marry a rich guy, but we’re saying that you have to be smart when it comes to marriage and money. It’s not just love, it’s an economic partnership.

• The reality is we have a short fertility span in our lives, and as time goes on we’re less attractive to men on a physiological level. It’s kind of repugnant to say, but it’s true. Older men aren’t looking for gray and pudgy. They’re looking for a pretty wife. You have a lot of powerful assets at this time of your life–it’s not going to last forever.

And then, there's this comment left on the article:

I just saw these two beasts, I mean women, on Fox and Friends. Wow. Is it any wonder why they are divorced? Woof woof. Lay off the Krispy Kremes and have some self respect. This is exactly the reason why so many women end up alone. The don’t get an education and spend their young adult years just partying and being lazy bums not furthering their education. They magically think that they will just marry a rich guy and everything will be taken care of for them. That is not reality for 99 percent of women. The only women that marrying a rich guy applies to is the very top 1 percent who are literally supermodels and stunningly beautiful. If you aren’t, and many women delusionally think they are, they are going to end up being poor their whole lives living with their cat. Meanwhile, a new crop of young, hot girls, who don’t have crows feet and middle age spread will be ready for the rich men to have fun with. It really is just a hilarious situation how some women really do sabotage their own lives with their delusional thinking.

Ok, so much for a pick-me-up post on this one, huh? ;-)

I think we've all seen (either in person or in the news/media) the older guy who's loaded with the much younger, stunningly beautiful wife. It's clear what she sees in him and what he sees in her. I have to think that this sort of marriage exists all across the spectrum, not just the ultra wealthy. One example: the doctor who's 50 and on his second marriage might not find a super model, but he can sure find a young, attractive new wife. Again, it's clear what they both get out of the relationship (not to say that they don't love each other, but it kinda begs the question...)

So many questions. Should women who are attractive cash in on their good looks and seek to marry someone who's wealthy? It will likely mean that they either marry someone who's much older than they are or someone who has family wealth (or fame, etc.) of some sort. Is attractiveness an asset that can be monetized? Is "love" by itself over-rated? What factor should economic stability play in choosing a mate?

I know you all have some thoughts on these issues...

How I Use PowerPoint to Keep My Wife Informed on Our Finances

I've mentioned a few times on this site that every summer I put together a short PowerPoint presentation for my wife that gives details on where we stand financially. At the start of every year we agree on our basic budget (which has pretty much been the same for the past several years) and we discuss financial decisions throughout the year, but during the year I manage all of the finances. As such, I develop a PowerPoint during the summer (roughly half way through the year) to give her a brief overview of our finances. I've had a few people ask me what's in the presentation and now I'm finally getting around to detailing it.

The design of the presentation is rather plain -- white and yellow text on a blue background -- since it's the information that's really most important. Here's what's included:

• Net worth over the past five years -- both the absolute amount as well as the percent increase versus the previous year.

• Giving over the past five years. We take our giving seriously and want to be sure it's at a level we feel is appropriate. This slide includes what we've given the past year as well as the total we've given since we got married.

• Assets. A bulletpoint listing of all of our major assets by name (Vanguard, 401k, house, etc.) as well as the value of each.

• Asset details. Several slides that highlight the details of each asset listed above. For instance, we have taxable, IRA, and SEP IRA accounts with Vanguard, and there's a slide that breaks these down and lists their value (and I have one detail slide for each asset that warrants it.)

• Savings plans. A line listing of what items we'll be saving for over the next year. This slide is used to spark conversation about whether or not these are the correct goals or not.

• Spending splits. Highlights the top 10 spending categories, the amount we spent on them, and what % they were of our total spending.

• Financial issues we face. Topics we need to discuss regarding our finances. Examples: buying a house, updating our wills, saving for college, etc.

• Location of key information. A quick listing of where my wife can find all the financial info in case something happens to me.

This is what our presentation has looked like historically. Last year I deviated from this and did a similar (though more detailed) presentation like this using a set of reports I generated and printed off via Quicken. It seemed to work well and gave us a lot more visibility into the numbers, so I think I'll stick with that again this summer. But the PowerPoint worked well for us for many years too, and if you're looking for a simple way to overview your finances with a spouse, you may want to consider it.

Debt is a Marriage Killer

The Wall Street Journal says that debt is a marriage killer. A few quotes from their article:

Debt, it turns out, is a leading cause of family strife during the first few years of marriage, according to Creighton University's Center for Marriage and Family.

That doesn't mean debt will necessarily send you to divorce court, but it does mean the accumulation of debt can undermine your marriage and cause the type of discord that can dissolve a marriage.

Money trouble (much of them caused by debt) can lead to divorce and divorce is an expensive option that will kill your net worth. Then again, you could get divorced and stay together for financial reasons, but who really wants to live like that? Isn't it a better option to get out of debt (even if it takes some work) and save your marriage, life and finances in the process?

But what about marrying someone that has a ton of debt? I was pretty fortunate in that my wife had less debt than I did when we married, and I didn't have much. Together, we paid off all our debts (including our mortgage) a few years into our marriage, and never looked back. It's been great for us as it's removed one source that causes a lot of fights in a marriage. I can honestly say that we've never had a fight about any sort of money problems at all -- and a big part of the reason why is that we haven't had any debt for most of our marriage.

How about you? Have you ever had marriage problems/fights because of debt? Or for those of you not yet married, what would you do if you found out your fiancee had a huge amount of debt?

Not a Way to Start a Marriage

Here's an engaged couple that's already in a bit of financial trouble:

Even with a less expensive location, they're experiencing some serious sticker shock. The estimated cost of their big day? Between $20,000 and $25,000 for 225 guests, and that's without all the bells and whistles.

And the wedding isn't their only financial challenge as a couple: They have some debt to whittle down, they'd like to buy a condo, and they need to agree on a joint budget.

Hold on -- how about a little financial reality here?? Why do they want to go out and spend (or worse, borrow) another $20k to $25k on a wedding? Here's what I'd suggest they do:

1. Take steps to increase their income and decrease their spending.

2. Use this money to pay off their debts.

3. Downsize their wedding plans to spend as little as possible on the big event -- and pocket the difference (if they have it.)

4. Agree on a budget for all future spending.

5. Save for a downpayment on a condo and follow my formula when buying one.

6. Take the three simple steps needed to become rich.

Did I miss anything?

What are Your Plans for Valentine's Day?

Well, love is in the air this weekend as couples around the US gear up for the annual chocolate, flowers, and Hallmark card lovefest known as Valentine's Day. But this year things are a bit different, if you haven't noticed. We're in the midst of an economic slump, putting the kibosh on many a planned expensive celebration of love this February 14. And there doesn't seem to be a lack of advice out there about what to do about it.

MSN Money says we should boycott the madness. Others suggest keeping things frugal. Kiplinger offers a couple pieces of advice -- either spend wisely or, of all things, buy some stocks.

We never have really made that big of a deal about Valentine's Day -- it's always been low-key for us. We'll go out to dinner, but that's probably it. My wife's birthday is also this week, so we're spending more time focusing on that celebration.

But I wanted to ask you -- what are you planning on doing for Valentine's Day? Is the economy impacting your celebration in any way?

Help a Reader: Money and Marriage

Here's an email I received from a reader. It's a bit long, but an interesting read as it compares contrasting money styles among spouses:

I found your website by searching Google and started to read your posts every day. They are very practical and easy to understand. One of the most important messages that I get from you is having a partner who has the same saving habits as me. It hits me immediately. Then I realized that my husband is a person does not like to save money, or he likes to spend all this money if he has a chance.

We have been marrying for over 5 years and basically everything is fine except that we have different values of money. About 1.5 years ago, we moved across country because I've got a decent job. Unfortunately, he could only find a part-time teaching job here. So, he's making $1,000 a month and I'm making $60,000 a year.

We have $10,000 credit card debt, two student loans and a car payment. Renting a house for $1,045 a month. We were paying $1,200 a month to credit card last year, but now we can only afford $800 a month. However we should able to pay it off in a year. Although we have agreed to pay off the credit card as soon as possible, he still spent money at the same time. $20 here, $40 there…he could spend about $200-$250 a month for himself. Once a while, he would spend $300 for a WWII German Helmet too!!

Being over 50, have an advanced degree; he can only make $1,000 a month. It's not a good feeling and I understand it's hard for him too. I never say a word about how little money he earns because I don't want to hurt his feelings. But I don't understand why he couldn't considerate our financial situation and being discipline a little bit. Except the days he goes to school, he pretty much just stays at home. Every time I talk to him about money, he said he was bored at home and couldn't help buying stuff on the internet. Then he said he would watch money, but in a week or two, he would go buying things again.

I put all our expenses in a spreadsheet and check our accounts online every day to make sure that we will have enough money to pay bills. At the beginning I felt okay if he just spent $30. But now, after a year, I'm so tired of taking care of the money. Even a $20 spending will upset me now. I feel like a fool that I am the only one to watch money and seem I am the only one wanting to pay off the debt seriously.

A couple weeks ago, he put his stuff on eBay and he got about $1,000 from it. (However, he used our credit card to pay all the shipping charge and eBay charge.) Then, he quickly spent all this money on other toys that he wanted. He didn't think about helping to pay off the debt at all. He said I didn't ask him to sell his stuff to pay off the debt, that's why he sold his stuff for buying things that he wanted. I used the Christmas money from his parents to paying the debt and he said I just made him feel guilty to spend his Christmas money. Eventually, he did spend all his Christmas money for himself.

Since last couple of months, I have a feeling that I don't know how long I can stand for it. I realized that It's not the debt problem anymore, it's this man whether I really want to live any longer. Before I came to the US, I was a single, I had a good job that I liked, I had debt-free, I had good saving in my account. I even could lend the money to my sister paying for her down payment. I gave $500 a month to my parents and now I could give none. I missed the old time that I enjoyed the great feeling to know that I have saving in my account. On the other hand, is this a good reason to part away a marriage? Am I too sensitive and too serious? He said he would do better if he could get a full-time job, but I think that he would spend even more. I am just tired of arguing money with him and wonder why I couldn't have someone who understands the same money value as me. Or if I could be a single, I could handle the money in whatever way I wanted that I think I would be much happier. I don't want him to change for me but I don't want myself being unhappy either.

When we just got married, both he and I were going to school. We were supported by his family giving us a house for free and then we used student loan to support our living. I don't know if we could have done better if we have stayed in our old state. I know that I wouldn't get a job giving me $60,000 a year there. He could have stayed with his old job for $28,000 though. After all these years, I never complain to have debt again, but it's just difficult to know that my husband and I were actually going to two different directions. I can't do that just by myself. How can we go to the same destination together? More heart-breaking is he didn't think of us but himself, or I didn't think of myself but him?

I don't know what advice I wanted to get from you, maybe I just wanted to express my feelings to someone. I only have one good girl friend in the US -- all my family and friends are in another country. I don't want to talk about it with his family. I don't know how I should handle it. We were talking to move after we paid off the credit card where we might able to find a full-time job for both of us. If each of us can make $40,000 a year is still better than what we are having now. He might able to find some music gigs there for his own pocket money as well. I don't know if this is a good solution or if I could wait another year?

One good thing is all his credit cards will be paid off next month. He will only have his student loan under his name and I will take care of the rest. If one day I wouldn't take care of his money, at least I won't send him bankrupt like his ex-wife did. Now he even has a much better credit score than me.

I think the main question I wanted to ask is: Could different saving habits impact marriage?

Actually there are a lot of questions here. Do you have any advice for her?

Frugal Millionaires on Cars and Marriage

Here's an excerpt from the book The Frugal Millionaires: 70 millionaires anonymously share their ideas about money to help each other and you. Today we're seeing what the millionaires have to say about cars and marriage. There's lots of good advice here -- as you would expect. After all, these people are doing pretty well financially.

FYI, these are some representative tips from The Frugal Millionaires. There are over 800 tips in the book. The frugal millionaires are only referenced by their initials. The author signed a confidentiality agreement that the millionaires' identities would never be disclosed in exchange for them saying whatever they wanted. If they chose not to have their initials used they were given the initials AFM which is an acronym for Anonymous Frugal Millionaire.

BUYING/LEASING/SERVICING A CAR

JLL – Always pay cash. Always buy the car with the least options and the smallest engine. It will significantly reduce your depreciation costs which, until the recent surge in gas prices, were the highest cost component to owning an automobile. Wait until the end of the month and negotiate like hell. To save even more money buy higher deductible car insurance.

AFM – Buy a car that makes you happy and matches your goals. If you have the money – buy it for cash. Treat it well, service it, invest in it. The car I bought 8 years ago is in excellent shape. In about a year I plan to invest in getting the engine rebuilt so I can get another 100,000 miles out of it. If I hadn’t taken care of it I’d be making another $35K “investment” instead of one about 1/6th of that.

WAL – Buying a lease-return vehicle is the best purchase. If you are fortunate you can find a car with some warranty still on it. Plus, you can buy a luxury vehicle at a realistic price, which the original owner took the depreciation hit on.

AFM – Only get your car worked on at the dealer while it’s under warranty or if the car requires special tools that independent dealers can’t get. Regular service that is done elsewhere in a timely/less expensive fashion should not affect your warranty as long as it is documented.

MARRIAGE

(All the frugal millionaires were listed as AFM’s in this section to protect their marriages.)

AFM – Marry for love first, and then for a similar approach to money. And marry someone who looks at money the same way you do or you won’t have either love or money in the long run.

AFM – Protect your assets that you take into the marriage and the growth of those assets during the marriage, and until it ends. Hopefully it won’t ever end, until one of you passes on. Start the pre-nup process at least six months before you intend to get married. Have it signed three months before you get married. Make sure that your fiancé has equal or better legal representation than you do.

AFM – Strangely, marriage as it relates to money is the hardest when the goals are seemingly 100% similar; that is, the two people have some level of frugality, so there’s no argument there, and also similar goals on saving money. But then neither thinks their approach to spending money is the wasteful one. It would almost be better if one was a miser and the other spent like crazy…which might lead to a quick divorce, oh well. The hard part is trust; that is: my spouse trusts me to make the big life changing financial decisions, and arguably I’ve done well, but like all people I’ve made some big mistakes. Then I trust her to make the daily decisions and for her to spot all her wasteful ways. Arguably her pissing away a few hundred dollars too much on clothing is nothing compared to some of the bonehead financial moves I’ve made. But that’s super hard to keep in perspective when it’s spending vs. investing.

AFM – A divorce lawyer once told me that the finance person where your significant other bought their last car knows more about your significant other’s finances than you probably do! Know as much as you can about how someone saves and spends their money before you get married…and what they might do with yours.

Top Four Money Fights for Couples

Here's a list of the four most money-related issues couple fight over from Quick and Simple:

• Spenders vs. Savers -- He loves to splurge, you don't. Or vice versa.

• Separate Accounts vs. Joint Accounts -- You disagree about whether the two of you should merge all of your money, and you feel threatened by the opposite point of view.

• Kids and Financial Rewards -- Your husband thinks your child should get money for making good grades; you think that's paying your child just for doing what she's supposed to do.

• Fiscal Infidelity -- You hide purchases from each other or keep secret accounts.

I guess this is why we never fight about money -- none of these are a problem for us. Here's where we stand on each of the above:

• Spenders vs. Savers -- We're both savers (though my wife is more "frugal" than I am and we sometimes have disagreements about just how far we're going to save a few pennies.)

• Separate Accounts vs. Joint Accounts -- We're agreed -- everything's joint.

• Kids and Financial Rewards -- We're in general agreement on these issues. Every once in awhile something unique pops up, but we usually settle it without much trouble.

• Fiscal Infidelity -- No need to hide purchases since we can buy whatever we want with our own personal accounts.

Our biggest "fight" (if you call it that) is over how much we should save versus how much we should give. A good part of our income is given away, and my wife always wants to give away more. I tell her that we need to be sure we save (retirement, college, etc.), but she doesn't think we need to (she hasn't run the numbers and seems to think that we could retire easily on $500k.) Anyway, it's too her credit that she's so giving -- though we do need to keep it in check! ;-)

How about you? Any of these issues in your marriage or relationship?

How Does Your Family Divide Financial Responsibilities?

The Wall Street Journal has a discussion on how families divide up financial responsibilities, so I thought it would be fun to tell how we do things in our family.

Who handles the finances in our family starts with the bigger list of who does what when all the household chores are listed. For instance, who does the cooking (my wife), the cleaning (the kids, mostly), any outside work such as lawns, garden, snow removal, garbage (me), and so on? In addition, we have to consider who is able to do the assigned task (if any special skills/abilities are needed.)

That said, here's how we divide up our financial chores:

• I develop an annual budget, then my wife and I meet to discuss/approve it. That serves as our framework for what we will and won't do financially during the next year. Built into the budget are long-term issues like saving for retirement, college, etc. as well as normal/regular spending.

• Once we have an approved budget, it falls mostly to me to implement it -- to make sure the 401k is funded, to handle the investments, to pay the bills, and, of course, to enter it all into Quicken.

• My wife does much of the shopping -- especially for things like food, clothing, and major purchases. She has a knack for saving money and getting a good value when she buys, so she has free reign to make most of our purchases. I know that if she buys something we likely got both a good price and a product that will perform well for a long time.

• Each summer, I prepare a "state of our finances" report (really a series of reports from Quicken) that my wife and I discuss to review how we're doing.  We usually do this when our kids are with my parents, so we have the time we need to really discuss what's going on.

Those are the high points of how we manage our finances. How do you split the responsibilities?

Who Gets the Ring when an Engagement is Called Off?

Here's an interesting money and marriage question:

Who gets the ring when an engagement is called off?

FYI, here's the piece that made me ask the question.

I'm sure it will be a hot topic in the comments -- have at it! ;-)

How to Determine If You Can Move from Two Incomes to One

A reader left a comment on my post titled Help a Reader: Going to One Income that I thought was especially good and should be shared with everyone. Here it is:

My wife and I are going through this exact thing right now. Here's the approach we took:

1. Compare income vs. childcare costs. In our case, we already had one child in daycare while my wife and I both worked. Adding a second child to daycare (and remember infants cost way more in childcare than a 3 year old) was going to put our childcare bill several hundreds of dollars more than my wife earned. It was an easy decision.

2. Budget - if you don't know where your money is going, you won't be able to predict changes in budget when you eliminate an income.

3. It's easier to make the transition if you're a saver. For the past 4+ years, every raise my wife and I have gotten has gone directly to savings. We have (or had in her case) direct deposit setup such that the first set amount of money from each paycheck went to our checking account, and anything above that amount went to savings. So as we got raises, our checking account income never changed, and the savings account grew and grew.

4. Plan early. If you're basing the change to a single income on the birth of a child, you've got 8-9 months to get ready for the change. Use that time to build up a safety net above and beyond your normal emergency fund. Expect that the first few months of living on one income are going to be an adjustment phase and that you might spend more than you expected at first. Also think about expenses that are going to go up (heat & electricity for example) having people always at-home. Sure, you may not burn as much gasoline driving two cars to jobs every day, but you will need more lighting / heat / etc.

5. Capitalize on equity you already have. For example, my wife and I knew we'd need a larger car when our second child was born (we both had small cars). We looked at both the cars we owned, what condition they were in, etc., and managed to sell the newer of our two cars for enough to pay off the remaining loan on that car, pay off the car we were keeping, and put several thousand dollars down on a slightly larger replacement vehicle. In the end, our insurance went down $50 a month, and our total cash output for car payments went down $115 a month. We looked at other areas we could save too, like reducing cell phone minutes because she won't need one for work or reducing the number of cable channels we have because we're realistically not going to have time between diapers and feedings to enjoy all 800 channels.

6. Treat the stay-at-home duties as a full time job. My wife and I had several conversations about what kinds of things she'd be doing as a stay-at-home mom, so there weren't any unspoken expectations or surprises as we moved into this change. She's got vacation time, she's got planned nights out, and we've setup budget line-items for the at-home stuff she'll want to do with the kids. Clearly identifying her role in the change has been fantastic for us. The end result is that we're working better as a team than we ever have before, and with her handling all the little day-to-day stuff around the house, we're able to spend a lot more time together as a family in the evenings and on the weekends.

It's comments like this that make FMF so much better than if I was the only one giving my thoughts here. Thanks to all of the commenters for helping to make Free Money Finance better!

Is Money Agreement the Key to a Good Marriage?

Here's a NY Times piece that asks if money is the key to marriage bliss. Some highlights:

If you ask married people why their marriage works, they are probably not going to say it’s because they found their financial soul mate.

But if they are lucky, they have. Marrying a person who shares your attitudes about money might just be the smartest financial decision you will ever make. In fact, when it comes to finances, your marriage is likely to be your most valuable asset — or your largest liability.

Making [money] choices as a team is one of the most important ways to preserve your marital assets, and your union, experts say. But it’s that much easier when you already share similar outlooks on money matters — or when you can, at the very least, find some middle ground.

The economies achieved by pairing up are fairly obvious. However, the costs of divorce can be financially devastating, especially when children are involved. And, not surprisingly, money manages to force a wide wedge between many couples.

“Most people think people break up over sex issues and children issues — and those are issues — but money is a huge factor in breaking up marriages,” said Susan Reach Winters, a divorce lawyer in Short Hills, N.J.

The piece goes on to say that not everyone is married to someone who sees finances they way they see them (in fact, my guess is that most people are married to financial opposites). But there are things you can do to become more compatible financially. Here are their suggestions along with FMF articles that go along with the thoughts:

Before walking down the aisle, couples should have a talk about their financial health and goals.

FMF resource: 10 Tips to Set Your Money Future Before You Get Married

Make a budget and keep track of earnings, expenses and debts. And structure your business as a partnership; when it comes to making big financial decisions and setting goals, do it together.

FMF resource: How We Budget

Having a supportive partner helps you professionally, which should trickle down to your mutual bottom line.

FMF resource: Maximizing Your Greatest Asset: Why Your Career is So Important

Create a cash cushion, and live a lifestyle you can sustain.

FMF resource: My Best Financial Advice: Spend Less than You Earn

An independent third party, whether a financial planner or a therapist, can help you find a middle ground.

FMF resource: Thoughts on Financial Planners

Carve out some money for both partners to spend on things that make them happy.

FMF resource: Solve Marriage Spending Differences by Having a Personal Account

Spend it — time and money — together.

FMF resource: How to Be Happy

And if these aren't enough, here are some additional posts on money and marriage that may help you/be of interest:

• Interesting Facts on Marriage and Money

• When Does "My" Money Become "Our" Money?

• How to Divorce the Right Way Financially

• MND: Both Spouses Must be Frugal

Some Cheap Date Ideas

After our discussion on how $100 per date is ok for some people, I thought I'd share this list of cheap date ideas. It includes:

• Go For a Long Country Walk
• Pack a Picnic
• Watch a DVD
• Bake Cakes Together

A few others from me:

• Visit a park (great if you have kids)
• Go bike riding
• Walk the mall and "people watch"
• Church event (free!)

Any other cheap date ideas out there?

A Couple More Date Questions

After posting on the costs of dating yesterday, I had a couple questions come up that I was wondering about and thought you all might enlighten me since the last time I was out on a non-married date was when John McCain was in diapers.

As a note, these questions are for singles dating -- not meant for married couples going out on dates. Anyway, here's what I was wondering about:

• Who pays/should pay for a date? The man? The woman? Split it? Whoever asks? Or something else?

• If a woman has kids, does a man offer to pick up baby-sitting costs for the kids if he takes her out? (I ask this because this can be a huge part of a date's expense.)

Any wisdom out there on these questions?

How Much Does a Date Cost Anyway?

Here's a guy that's out of touch with his personal finances to me -- either that or he lives in a hugely expensive city. Why? Because his "average" date costs $104.29 and even his cheap date costs almost $30. And this includes no provision for childcare. Yikes!

Here's how I'd reduce his expenses on his "average" date:

• Dinner at a medium price restaurant - including meals, appetizer, no dessert, iced tea and tip - $30 (this is what a medium-priced restaurant meal costs in a decent cost-of-living city). And if you want to go to a Chinese buffet or something similar, it's closer to $20.
• Movie tickets - $14.00 (not much you can do about these)
• Movie Snacks - $0.00 (eat dinner right before the movie)
• 2 Coffee-Like Drinks and one big cookie - $4 (buy a half gallon of ice cream and go home)
• Total - $48

Then again, I could get it even cheaper. To me, the most important part is being together and having fun, so I'm up for something like ice cream on the beach. Pretty cheap, but very good for getting to know someone.

But the above implies that no one has kids. If they do, then the costs can really go up. The babysitter adds BIGTIME to the costs of a date out. In fact, our sitter almost doubles our non-sitter costs for a night out -- not to mention the fact that it's hard to find a good sitter. But that's a different post.

So here's my question -- what do you spend on a date?

Interesting Facts on Marriage and Money

MSN Money lists some interesting facts on marriage and money as follows:

• The median net worth of married-couple households in the latest Census Bureau wealth study, conducted in 2002, was $101,975. For single men, median wealth was $23,700. For single women, $20,217.

• A 15-year study of 9,000 people found that during that time, people who married and stayed married built up nearly twice the net worth of people who stayed single. Even when all other factors are held constant -- stuff like income and education -- just the fact that they were married contributed to a 4% annual rise in these couples' wealth.

• Wealth declines typically started four years before a divorce was final, and the breakup ultimately reduced the typical person's net worth by 77% of that of the average single person.

The piece also suggests how you should handle the "business" side of marriage, but that wasn't nearly as interesting to me as the facts above.

Here are a few thoughts I had on the numbers they presented:

1. I wonder if they factored in age when the compared marrieds versus singles. A good portion of single people are young and thus likely to earn less than (married) people more established in their careers. I know we've said that income doesn't equal net worth, but it sure does give a person a good head start.

2. The second set of facts seems the most powerful to me. Seems pretty clear that marriage does lead to a rise in net worth. Maybe it's because major expenses like housing are split among two people versus being totally paid by one person. Think this could be the cause for at least part of the 4% increase?

3. Ouch! Divorce can lead to a huge financial hit. My thought is that the declining finances for four years probably contributed to the divorce. Then, once the divorce occurs, each person takes another financial hit. Make sense?

Money Versus Sex

Here are some interesting stats I found in the July issue of Money magazine:

Percentage who think couples should talk more about money:

• Men -- 21%
• Women -- 33%

Percentage who think couples should talk more about sex:

• Men -- 29%
• Women -- 15%

Ha! What a shocker, huh? ;-)

A few thoughts from me:

1. One-third of women want to talk more about money. This seems like a fairly high number to me. Many must be in the dark about their finances.

2. Though I expected men to score higher on the sex question, I'm surprised so many wanted to "talk" more about it. What is there to talk about?

3. Would the questions be better if they were "percentage who think couples should spend more time managing their money" and "percentage who think couples should spend more time having sex"? Now THOSE would be interesting responses!

How to Make a Fortune at Your Wedding

I never knew this, but it appears there are several ways to turn your wedding into a money making event. I've never heard of any of these ideas, but I'm a guy and what do I know about weddings? Anyway, Smart Money gives us the details:

The "dollar dance" or "money dance": The concept behind this Polish tradition is that male guests pay for the privilege of dancing with the bride. Guests deposit (usually monetary) gifts in a purse attached to the bride's dress or pin it directly to her gown. Nowadays, the groom participates too, and collects donations from female guests for a dance.

I hate to dance, so why would I want to pay to do it? Maybe I could pay NOT to have to dance. I'd be up for that.

Money tree: This is an actual tree with clips or bows attached so that guests can clip or tie on money for the newlyweds. The tradition started in the northern states, but has spread across the country as people moved around, says Woodham. "If this is a tradition that has not been in the bride or groom's family, I would advise against [the couple having one]," she says.

Why, because it sounds tacky? Actually, I'm thinking of putting one of these "money trees" up in our foyer so guests can contribute when they visit us. Good way to earn some extra bucks! ;-)

Birdcage: The birdcage is a more common option when it comes to handing over monetary gifts. This accessory — often ornately decorated with ribbon or flowers — is usually stationed in the reception area for guests to deposit their cards or checks.

If this means guests would simply bring in cash gifts they'd already planned to give as wedding presents, I'm ok with this since it's not trying to bilk anyone for MORE money. But if it's a "give now even though you already gave a present" sort of thing, I'd be tempted to try and sneak in a bird and really liven up that cage!

Money art: Cold hard cash doesn't have to be boring. As a creative gift option, guests can hire an origami artist to fashion dollar bills into a dozen roses or a tuxedo shirt and tie. You're giving the couple money — but in this case it's all in the presentation. "You give the impression of spending more when you put effort into your gift," says Sharon Naylor, wedding expert and author of "The Essential Guide to Wedding Etiquette."

Expect to pay a premium, though: One origami artist we found charges $10 to create a single rose out of five greenbacks. Assuming they're one dollar bills, a dozen roses will cost $180 to make, but leaves the couple with just $60.

I wasn't a math major, but that doesn't actually seem like a good return to me. If I was getting married, I'd tell people to give me the $180 and I'd fold it myself! ;-)

Anyone out there heard of any of these before? Or maybe other ways people squeeze extra cash out of guests at weddings?

Why You Shouldn't Invite Me to Your Wedding

Smart Money has a post that's billed as the Wedding Gift Etiquette Guide where they answer basic questions people have about weddings. Here are some of them along with my thoughts:

1. How much should I spend on a gift?

A typical amount, says Betsy Goldberg, features editor at Modern Bride magazine, is $75. If you bring a date, expect to give a present worth double that.

Summer Krecke, deputy editor of WeddingChannel.com, offers a few guidelines based on the guest's relationship to the bride or groom: If it's your co-worker's wedding, you should spend $75 to $100; a relative or friend, $100-$125; and if it's your close friend or close relative, anywhere from $100 to $150 or more is acceptable.

Yikes! Maybe this is why I don't get invited to many weddings. ;-)

Seriously, most of our friends/family are already married, so we don't go to many weddings (good thing too, I don't really like them.) But the last one we went to was my wife's sister's wedding last summer. I think we gave them $250 in cash, though it could have been more.

Anyway, we like to give close family members a good gift and for all others we usually skip the show, send a card and may or may not include a check in it (depending on if we know them well or if they're just sending invitations out to everyone on their list (or their parent's list) to maximize the gifts.)

BTW, anyone out there feel ok in giving a lower gift for a second, third, etc. wedding of a family member when you've shelled out a good amount for their previous wedding gifts?

2. What if I can't afford the $120 five-speed blender because I have four other weddings this month?

They don't have a real answer for this question. I do.

3. Should the amount I give depend on the price per dinner plate or how posh the venue is?

Quite simply, no. A gift is separate from the party itself and should not be considered "the admission price to the wedding," says Woodham.

Ok, there goes that guideline out the window. Seriously, don't people think about this and make sure their gift is over the value of their meal?

4. If I can't make it to the wedding, do I still give a gift?

Yes. "If you care about the couple, you send a gift — not just because you were invited to the wedding," she says.

For us, it depends on how well we know the people (see comments on #1 above.) We don't give a gift to the sister of a friend's cousin just because she sent us an invitation.

5. Is it always best to get a gift from the registry?

They don't really answer the question, but the do offer this piece of advice:

One bit of advice when buying from the registry: Shop early to make sure you have various price points to choose from.

Isn't that what I just said?

Anyway, I prefer the registry if we're attending and don't know the couple well. If we do know them well, it's usually cash.

6. Is it in poor taste to hand an envelope containing a check to the bride or groom during the reception?

Generally, a gift of cash or a check is acceptable — and, for the most part, welcomed. "I don't know of any bride or groom turning down a check," says Krecke. Most couples will put either the best man or a parent in charge of receiving and holding onto checks at the wedding.

Personally for me, I'm fine WHENEVER someone wants to hand me cash. ;-)

7. I can send them a gift later, right?

While it's fine to celebrate the special day with the couple and send a gift later — don't wait until well after the bride's written all her thank-you notes.

How about taking five minutes and pick out a gift in advance, huh?

What's your take on all these wedding "rules"?

When Does "My" Money Become "Our" Money?

The Street takes a shot at answering the question of when couples should establish joint ownership of their money, investments, property, etc. They approach it from the perspective of people living together (not married) and come to the conclusion that it depends on the couple and what they want in their relationship (duh!). But basically they're saying that each couple should do what works for them.

I thought I'd add my two cents to this issue just to get things stirred up a bit. ;-)

My thoughts:

• If I was living with someone, I'd opt for separate accounts. Disaster can happen if you put accounts together earlier than that -- and there's no reason to take the risk. That said, I might open up a joint account to pay joint expenses (food, utilities, etc.), but I'd keep most of my funds separate.

• If I then got married, I would make everything into joint accounts (this is what my wife and I do now.) For me, marriage is two people coming together in all ways, and that means financially too.

• The above said, the one thing I'm not sure of is how I would handle a remarriage later in life. The two points above work for a couple married young, but what happens if it's a second marriage for one or both of them and there are kids and/or a significant amount of money involved? Then it gets pretty dicey. I think that if it was just the money issue (no kids) that I'd still have joint accounts (after all, I'd trust this person enough to marry her, so why not trust her with "my" money?) But if I had kids to care for (which I would), I'm not so sure how I'd handle the finances. I'd certainly want the kids to be provided for (education plus some to get started), but after that, I'd probably open up my finances for joint ownership/access.

How about you? What are your thoughts on the issue?

Do You Know What's in Your Spouse's Wallet?

Here's an interesting question:

Do you know what's in your spouse's wallet?

CNNMoney says that most people have no clue about the contents of their partner's wallet/purse -- much less the complete financial picture for their family. But the piece argues that each person should. The highlights:

You can't come to smart decisions - or even joint decisions - if you don't know what assets and liabilities you're working with and what your partner's goals and priorities are. "You also lose out on the benefit of collective thinking," says family lawyer and financial planner Violet Woodhouse, author of Divorce and Money.

In other words, two heads really are better than one for solving financial problems. The blinders-on approach also makes a crisis more difficult to handle. Should your spouse pass away, you'll be left scrambling to find bank accounts and insurance policies. And if you divorce, you'll be at a real disadvantage in getting your fair share.

Fortunately, the solution is simple: Mostly, what you have to do is talk to each other.

Here's what we do:

• One person handles the finances (me.) I see EVERYTHING since I track all our spending, investments, etc. on Quicken and have done so for 15 years or so now.

• Once a year, I do a report for my wife detailing where our finances stand. We review it together and discuss the situation, plans for the next year, etc. In the past, I've actually prepared a PowerPoint presentation for her, but I'm thinking of simply printing out some Quicken reports this year.

• She has a general sense of where everything is if something was to happen to me, but I need to write down all the details of where to find insurance specifics, investment details, etc. I've put this on my list to develop for her.

How about you? Do you know your family's complete financial picture or just a part of it?

The Value of a Stay-at-Home Mom

Here we go again -- our annual debate on the value of a stay-at-home mom. This year, Salary.com places the value at $117,000. The details:

If a stay-at-home mom could be compensated in dollars rather than personal satisfaction and unconditional love, she'd rake in a nifty sum of nearly $117,000 a year. That's according to a pre-Mother's Day study released in May by Salary.com, a Waltham, Massachusetts-based firm that studies workplace compensation.

The eighth annual survey calculated a mom's market value by studying pay levels for 10 job titles with duties that a typical mom performs, ranging from housekeeper and day care center teacher to van driver, psychologist and chief executive officer.

This year, the annual salary for a stay-at-home mom would be $116,805, while a working mom who also juggles an outside job would get $68,405 for her motherly duties.

The biggest driver of a mom's theoretical salary is the amount of overtime pay she'd receive for working more than 40 hours a week. The 18,000 moms surveyed about their typical week reported working 94.4 hours -- meaning they'd be spending more than half their working hours on overtime.

I originally suggested my own method for calculating the value of a stay-at-home parent but later had second thoughts. But what is the "right" number? Is there even one? Can you place a value on the intangible benefits the family receives from one parent staying home?

I'd love to hear your thoughts on the subject.

Myth of the Marriage Penalty

In tax discussions you may often hear of the "marriage penalty" -- the "fact" that married couples pay more in taxes than they would if they were single. MSN Money says this simply isn't accurate:

51% of married couples paid less tax jointly than if they had not been married, according to a 1996 Congressional Budget Office analysis. The average amount these couples saved: $1,300.

42% of married taxpayers paid more by filing jointly than they would have if they'd remained single, the office said. The average penalty: $1,380.

And a bit more detail for perspective:

The people who got tax breaks by marrying were those with disparate incomes, where one spouse earned more than the other. The wider the gap between the paychecks of the husband and wife, the bigger the bonus. The people who tended to face a marriage penalty were those with similar incomes. Typically, the more they made, the bigger the penalty they paid.

I think it's the latter group that people refer to when they talk about a "marriage penalty." But isn't part of the issue that these people are probably making more money too (with both spouses working)? And in this country, the more you make, the more you pay.

The piece also lists advantages of being married including:

• Workplace health and pension benefits coverage.
• Social Security retirement and survivor benefits.
• Lower insurance rates.
• Automatic inheritance rights.
• Preferential estate-tax treatment.

All these benefits PLUS married people are wealthier and live longer.

How to Make It Rich: Marry a Go-Getter

When I saw this piece on the Girl Scout that sold over 17,000 boxes of cookies, my immediate thought was that whoever married her was probably going to be set financially. After all, with a go-getter like that for a wife, it seems like the couple would be destined to do well (as long as they could control their spending, of course -- you have to play both great offense and defense to do well financially.)

So why did I think this? Because if you can sell, you can make a great deal of money. And someone that has the drive and ability to sell that many boxes of Girl Scout cookies certainly has the drive and skill to make it big in her career.

Ok, this post is obviously a bit tongue-in-cheek. Before I get blasted in the comments let me say that I know there are many more important reasons to marry than for money. But I did (and still do) think she'd make a great catch -- assuming all the other factors were met, of course.

Hey, I just noticed, she's from Michigan. I wonder if she'd wait a few years until my son is ready to be married. ;-)