Gather Little by Little

Some of us are going to be seeing a lot of traffic lights over the next week or so . . . Here are some articles that I like:

A great article from Kevin at Moolanomy where he challenges us to help ourselves, not the economy. He is right. Our government needs us to spend money. They want us to spend money, even if it is not in our best interests. I say that they need to balance their own books.

Being Frugal recommends using Smarty Pig to save for Christmas next year. That particular type of account has some interesting applications.

Peter at Bible Money Matters suggests 50 frugal gifts that you can give this Christmas. Outstanding.

Some of you are living in houses that are worth more than the Pontiac Silverdome! Unbelievable. Flexo at Consumerism Commentary has done the homework.

Ron at the Wisdom Journal suggests some ways to fight a health insurance claim denial. Good things to know. My money says that trying to get coverage from a private health insurer might be easier than dealing with a government bureaucrat . . . but we’ll see . . .

Have a great week and don’t just spend money, spend time with family.

Article by Stew

Photo by Mr. Freshtags

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As I had written a few weeks ago, a good friend of mine is getting married in early 2010. Being a financial planner, I always find it interesting to see how couples deal with money. It is often overlooked but it shouldn’t be. Studies have shown that financial corners and disputes rank at the top of the reasons for separation/divorce. It’s a lot more complex than most people think and it’s so easy to overlook when you are in love and visualizing the wedding, your honeymoon and all the other good stuff that is to come.

There are an infinite number of ways that family finances can be managed but the two keys are like every other aspect of a marriage; communication and being willing to compromise. This subject will be discussed over time but I consider it even more important to discuss before getting married.

Here are the main questions I think should be discussed. Let me know if you think of any others?

-Should we combine our financial assets/debts?

This is not an easy question. I think it’s a question that should be asked and reflected on. Obviously, as we grow in a relationship, finances tend to merge because future expenses are often for the family. As well, it becomes very time consuming to split every expense and of course you can be much more efficient by combining finances together. I think that as long as both agree on how money should be spent and saved, this is the easiest way to deal with personal finances. Mathematically, you will always be better off on the same financial team as your spouse.

-What kind of lifestyle do you aspire to?

This is a major question. If a husband is hoping to have a boat, a second house and lots of travelling, chances are that the lifestyle he is looking for could be different from that of his wife, especially if her desires are for family, leisure and fitness activities. Chances are that if they simply avoid discussing this, the discussion will come up over and over. My example is perhaps a bit extreme but the reality is that no one expects or hopes for the same life. Ok, perhaps everyone wishes they did not have to work much without having any financial worries. But the reality for almost everyone is different. What kind of house, retirement, etc. There is usually a compromise to be reached that will make it a lot easier to deal with everyday budget and spending decisions.

-Who will be responsible for financial “chores” (paying bills, checking statements, etc?

I don’t think it’s ever a good idea for one person to do everything and be the sole person looking after these matters. However, this is what happens in my case since I am a financial planner and my wife just hates finance as much as I enjoy it!

Personal finance is a subject where both parties need to get involved. That being said, there is usually one person who has more interest in taking care of everything and a compromise can generally be reached for that person to follow a budget, investments, reports, etc. But at the same time, I think it’s important for both parties to get information so this information be discussed. One of the reasons of course is that if one of the members gets very sick or has an accident, the other should be able to still function.

Even though I take care of all financial aspects at home, we still discuss how we manage our money in terms of expenses (I give full disclosure on debt management and investment ).
-What are your thoughts on charity?

As you are now a couple and have partially or fully merged assets, charity becomes something that you should agree on since it is no longer one member giving but rather both. There are many ways to do this and one of them is to have each person decide to which charity they want to donate (splitting the money in two), or deciding on causes that are important to both parties. But when such subjects are discussed, it makes it a lot easier for both parties to know where they stand.
-What is your opinion about debt?

The reality is that almost everyone must use debt at some point, either to buy a house, a car, household repairs, help a parent, etc. It is important to clarify how debt should be used, to what extent and for what reasons. Using debt in itself is not a bad thing but there is obviously some level of risk involved and for that reason, it is critical for the couple to both be comfortable with their level of debt.

These are some of the questions and I’m certain there are many more that you have discussed with your spouse. I think the main point is that family finances need to be discussed in order to avoid frustration, conflict and misunderstanding.

How do you deal with finances with your spouse?

Author: Mike

Image source: pedrosimoes 7

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Hey! Another Carnival at GLBL! Don’t worry; this is the last one until the Carnival of Personal Finance at the end of the year

Along with the Carnival, I’ve decided to share a few of my money successes. After sharing my money flaws last week, I also wanted to share some financial achievements from the past year. Handling personal finance is not always easy and it is important to acknowledge our failures yet it is even more important to acknowledge success!

But before we start, here are a few good readings from GLBL:

- 15 Uses for Coffee Filters

- Dave Ramsey’s Gazelle Budget

- Homemade car cleaning products

- Switch to zero percent balance transfer credit cards

#1 Editor’s Picks: My Biggest Money Achievement (creating an alternative source of income)

During these rough economic times, we are all seeking job security. Unfortunately, we have little to no control (besides doing your job right) over our employer’s decision. Therefore, the best way to improve your financial stability is by having an alternative source of income. Through my web company, I have been able to create an additional source of income; my plan B. While it doesn’t generate enough money to allow me to quit my day job, it would provide me sufficient cash flow if anything goes sour at work. This piece of mind is priceless. So here are the best articles of this carnival:

d. ninja presents Bring it on haterz posted at Punch Debt In The Face.

MoneyNing presents Take Some Time to Make More Money posted at Money Ning.

debt kid presents How To Stop Money From Ruling Your Life posted at Debt Kid.

J. Money presents My Wallet Gets Beer Goggles Too. posted at Budgets are Sexy.

#2 Money Management: Living in a Single Income Household

Back in May 2009, my wife quit her job to take care of our 2 children. While it is the best situation in terms of family lifestyle, it is far from being good news on the financial side. We have learned to manage our money differently in order to make sure that we have enough to pay all the bills. Here are the money management related articles:

Emily Simmons presents How to Make a Budget That Works posted at Be In Health Now.

Peak Personal Finance presents 5 Financial Rules for Women posted at Peak Personal Finance.

Madison presents Understanding Health Savings Accounts posted at My Dollar Plan.

Studenomist presents Finding The Perfect Debt Elimination Plan For YOU posted at Studenomics.

Chris Holdheide presents How The John Cummuta Transforming Debt Into Wealth System Works posted at StumbleForward.com.

Hank presents Five Steps To Get Out of Credit Card Debt Now posted at Own The Dollar.

Tyler presents Stop Feeling Guilty and Go Do Something Awesome posted at Frugally Green.

#3 Investing: Buying my First House Through Leverage

As I have mentioned before, I am a big fan of leveraging. While borrowing to invest is not for everyone and should not be advertised abroad, this is how I managed to buy my first house. I borrowed $20,000 from my line of credit back in 2003 and I bought my first house with my investment profit in 2006. Technically, I didn’t take a penny from my own pocket into my property. Here are the investing articles:

The Financial Blogger presents 10 Trading Lessons for Free! posted at The Financial Blogger.

Intelligent Speculator presents Will commodity ETF’s exist a year from now? posted at Intelligent Speculator.

Hank presents Use Insider Information The Legal Way To Pick Winning Stocks To Invest In posted at Own The Dollar.

Manshu presents S&P 500 ETF List posted at OneMint.

Jeff Rose presents Good to Know Rules and Limits for the Traditional IRA posted at Jeff Rose.

D4L presents 4 Stocks With Higher Dividends posted at Dividends Value.

Matt_SF presents Charles Schwab Might be the Best Choice for Passive Investors posted at Steadfast Finances.

#4 Frugality and Debt Management: Consolidating all my debts in a HELOC (Home Equity Line of Credit)

Frugality refers to saving money and spending diligently. One of the best ways to achieve both side of frugality is to manage your debt correctly. You can save money on interest and spend less in order to avoid maxing out your credit cards. A few years ago, I decided to put all my debts together using my home equity line of credit. While debt management has become much easier with only one account, I also pay less interest. Here are other ways to save money or to manage your debt:

Craig Ford presents 10 Tips For Saving Money While Raising Kids posted at Money Help For Christians.

Darwin presents Why Do People Pay More Money for the Top of the Line Model? Incremental Value Analysis posted at Darwin’s Finance.

Barry presents 7 Tips To Save Money On A Vacation posted at Associate Money.

J.D. Roth presents Creative Cleaning with Everyday Products posted at Get Rich Slowly.

freefrombroke presents Extended Home Buyer Tax Credit May Not Be Good For Existing Buyers posted at Free From Broke.

David presents How Much Can You Save with a 0% Balance Transfer for 12 Months posted at Credit Card Offers IQ.

MatthewPaulson presents Best Coupon Sources Online posted at Fine Tuned Finances.

Billeater presents Mortgage Options You Can Afford to Pay posted at Billeater.

Mr Credit Card presents Chase Sapphire Card Review posted at Ask Mr Credit Card.

Tom @ Canadian Finance Blog presents Top 15 Ways to Save Money on Heating Your House posted at Canadian Finance Blog.

Ray @ Financial Highway presents Frugal Thanksgiving Dinner Tips posted at Financial Highway.

PT presents Upromise Review: A Little Extra Savings for College posted at PT Money.

#5 Other: Making a Career Move

2 years ago, I decided to get my financial planner title and switch jobs to become a full time financial planner. The first year was rough and I didn’t manage to increase my pay check. In fact, I would have received a bigger bonus if I didn’t leave my previous job. However, this year has been fantastic and I am not only increasing my income but my bonus will compensate for what I had lost last year. You never know if your career moves are good or bad until you do them. I guess this time I made the right choice. Here are the other articles from the carnival:

Jeremy J. Ulmer presents Need Sales Coaching? Top 10 Questions You Should Ask Before Hiring a Sales Coach posted at Sales Coaching.

Miss M presents Financial Literacy Finally Gaining Attention posted at M is for Money.

Bucksome presents Three Electronics That Make Me Drool posted at Buck$ome Boomer’s Journey to Retirement.

Paul Williams presents Beneficiary Designations – Mistakes to Avoid posted at Provident Planning.

FMF presents How to Make Money as a Soccer Referee posted at Free Money Finance.

Author: Mike.

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There were so many questions from yesterday’s post on Homeschool Finance, that I decided to do a follow-up post today and explain a few things:

Mike asked: Have you calculated the option cost of having your spouse at home teaching your children instead of working full time or part time?

Good question. My wife stays home with the kids and actually makes money by watching other children in our home. Some of you will remember that Mrs. Stew almost worked outside the home this year, but we were going to get free tuition/preschool for our children as a benefit to her job. At the last minute we decided that she would stay home. I doubt whether Mrs. Stew could get a job that would justify the up front expense of work clothes, a second car, child care, etc. and still bring in money. Providing child care in our home has been great for our finances.

Given the ages of our children, I think that a stay at home wife is overall a cost savings. That might change as they move into junior high and high school.

Greg stated: The one thing you left out was the cost of home school curriculum. This can be very pricey. The savings on clothing (you still have to buy clothes), transportation (field trips, library visits), and food (you don’t need to buy lunch at school and you can use reusable containers) is negligible to the cost of the curriculum.

The truth is that our curriculum is free! Our state provides a free online curriculum and so far, my wife and I have been pleased with it . . . well, it is not free . . . might be more accurate to say that it is paid for by the good tax payers of our state. The online curriculum provides a schedule and accountability. Yes, we do have to buy clothes, but they definitely do not get the wear and tear that school brings. There are some transportation costs to field trips – but only once or twice a month – and the library is within walking distance. My intent was not to list all of the expenses due to homeschooling, but rather just a list of the ways that we save money.

Gina’s question was interesting: If you have “other” students, would you charge a nominal fee to cover the curriculum costs? Would other students require more licensing (such as w/a daycare)? What sort of creditentials are involved w/being a “homeschool” teacher?

I think they are called “homeschool co-ops”. I know that the homeschoolers in our old church used to use the church facility once a week to meet and bring in a teacher to handle specialized subjects that some parents found difficult. We are not currently involved in anything like that, however, Mrs. Stew often gets the kids together with other homeschool friends of ours for playdates. This might eventually turn into some sort of co-op. The definition of what constitutes homeschooling is defined by state law and is different in almost every state.

Evan asked: What about the lost socialization with other students around their age? Beyond siblings?

I think this concern is valid, but often over-stated. Our kids play with other children on a regular basis and we are faithful to church, so there is socialization there. As they get older, we hope to involve them in community and club sports as well. Furthermore, there are some peer influences from which we would like to shelter them – at least for a little while longer.

The bottom line is that while there was a financial component to our decision to homeschool, this was not the only factor. Many pros and cons were weighed. One factor that is not financial is the fact that my job allows me to participate in homeschooling. I teach thirty to forty percent of the material in order to give Mrs. Stew a break. If my job ever changes so that I can no longer bear part of the burden, our kids will probably go back to school.

Any more questions?

Article by Stew

Photo by lepiaf.geo

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When my wife and I started to have children, we never thought that we would end up as homeschoolers. This year we are just that. We have a first grader and a kindergartener and we are educating them at home. I do not want to get into a long discussion about the pros and cons of homeschool v private school v government school. The bottom line is that we believe this is best for our children at this point in time and in the future, circumstances might change that will cause us to reconcider and possibly even choose one of the other options. Today, I just want to talk about the financial aspect of this decision.

Here are the ways that we save money by homeschooling:

• Clothes. We have been able to avoid the cost of clothes brought on by a dress code (some private schools) and by peer pressure. Our kids go to school in their play clothes and we save some money this way. I think the greatest area of savings is in shoes.
• Transportation. We do not have to drive our children to and from school. Getting to school is as easy as walking downstairs.
• Food. We do not have to buy the school lunch and we even save money on packing a lunch since lunch at home does not require a lunch box, sandwich bags, beverage container or even the proverbial “brown bag”.
• Tuition. This is the obvious cost savings over private school. Public school would not require us to pay tuition, obviously.
• Fundraising. All schools, public and private, require students to raise money for one thing or another. We do not have to deal with selling candy bars, magazine subscriptions or participating in any other ways to bring in money to the school.
• School supplies. Our kids share school supplies and many of the things that they use are items that we already have around the house.
• Vacations and travel. Because we are not bound by the school year, we are able to travel at “off-peak” times of the year. We save a lot of money by booking flights on week days or staying in hotels on school nights.

We did not chose to homeschool because it was the cheapest option. We chose it because in light of all of the circumstances, it is the best educational choice for our children. I am thankful to live in a country where we have the freedom to educate our children at home. While there is a financial component to the decision to homeschool, I certainly believe that it is important to invest in education and hope to have the money  in the future to spend on the best education possible for my kids.

Article by Stew

Photo by tiffanywashko

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