She’s Frugal and He Isn’t—How to Handle It

 

Another Money Fight!

Handling money wisely can be hard enough when there is only one person involved. Frugality, though very rewarding, takes work. But, as a single person your own needs and desires are the only concern. This becomes much more complicated when another person with their own viewpoints and needs comes into the mix. It is complicated even if the two of you are as alike as can be. So we can just imagine has difficult it becomes when the two of you have radically different ideas about spending and saving.

Fights about money are very high on the list of things that cause trouble in relationships and marriages. Money fights can even lead to divorce.  And even if there is no fighting, having a real spendthrift as a partner can lower your quality of life, or even leave you in a very difficult financial predicament if they should die before you. So getting this right is serious business.

If you are just starting out in a relationship with someone that you suspect has a wildly different idea about spending you have plenty of options, and no real obligations. Just keep the money separate until you are sure that any problems have been worked out-which may be forever. And don’t let your self be forced to spend more than you are comfortable with for any joint activities.

If you are living with your spendy partner already but are not married, now is the time to separate the money. They might get mad, but this is better than you getting broke. One thing that works is the three-account plan. One account for you, one for your sweetie, and one for the house. You are then able to control your money while still contributing to the household. There are differing views on figuring the household contribution. Some say it should be equal, but the Frugal Goddess prefers to have each contribute a share commensurate with their income.

To figure this out, add both incomes together. Then divide the by smaller of the two incomes by the combined total. This will be the percentage of household expenses paid by the person with the smaller income.

For example: If she makes $2500 a month, and he makes $1500 a month, the total income is $4000. So, divide $1500 by $4000. The result is .375. Now let us imagine that the total household expenses are $2000. He would pay $750 a month, and she would pay $1350. Each would retain control of the rest of their own money.

The household account should cover housing, food, home insurance, and anything else that is shared. Personal phone bills, and individual car expenses if each has their own car would not be included. Each couple has to decide for themselves what should be shared.

If you are thinking of marrying a spendy person when you are frugal, I would recommend a pre-nup that details the extent of your financial involvement before the fact, and, if you are in a community property state will serve as a protection on your future earnings. It may not be romantic, but neither is being poor when you didn’t have to be and it wasn’t your fault.

If you are already married you are in a bit of a predicament. Have you had a heart to heart with your spouse? If so, and no agreement was reached, or agreements have been broken, you may have to take stronger action. It may be good to consult a lawyer and find out if you can protect yourself and remain married. If this is your situation I wish you the best of luck. For the rest of us—romance is much more satisfying when our financial boundaries are not being violated. So take action now to make sure that being in love is not the same as being subject to the whims of another.

Retire in Style Even if You are Broke!

 

The other day I saw a startling and scary statistic. Over 60% of Americans, when asked how much money it would take for them to feel absolutely comfortable at retirement, quote a figure of 4 million dollars. Yet the average amount of actual retirement savings is a mere sixty thousand. This is a huge disconnect. If what you actually have at retirement age is 60K, either you are going to be living on a tiny social security check, or you will not be retiring at all, but rather continuing to work.

This situation is complicated by those that were “forcibly retired” in the crash of 2008. If you are over sixty and lost your job in the crash, and you have not been able to get another job, it would not be stretching the truth to say you are “retired”. This is a frightening and unfair thing, but there it is. So what do you do?

First of all, if your unemployment has run out and you are approaching 62, go get that social security check. It may not be much but it beats the alternative.

Then, whether you retired by choice or by force, try these tips:

  1. If you are going to take up a hobby, consider one that has side benefits, such as vegetable gardening, sewing, computer repair, or carpentry. These are all useful skills that can save you money, but they can also enrich you in other ways
  2. Cook your own meals. Nothing else has such an immediate beneficial effect on your wallet, your health, and your quality of life.
  3. Cut your housing expense by getting a housemate. Studies show that living with another person will help you live longer and healthier than living alone. Even if you are married having a housemate can be helpful in other ways than just cutting your living expenses. And if your home is in danger of being lost, using it to create income could save it.
  4. Having deep friendships is more important to quality of life than money. Stay in close touch and find free or inexpensive activities to enjoy together. Things like picnics and movie night.
  5. If you have a little capital, start a small business. Just make sure it is rock solid. Buying an already successful business and changing nothing may be just the ticket. Things like coffee carts and vending machines are possible choices. The idea is not to take a risk but rather to carry on with a sure thing.
  6. If you are a good salesperson and very social, try a network marketing business. Many of them are require a very minimal starting investment. Just make sure you really love the product. These businesses are all based on word of mouth, and your integrity is important. Also, really succeeding is hard work, but if you have the right personality and the right product you can supplement your fixed income nicely.

Then there are a few techniques that involve the underground economy, so I am not recommending them but merely reporting what others have done to create a better quality of life in retirement. These techniques are barter and creating an all cash business. Remember those useful hobbies mentioned above? Can you trade your skills in these things for things you want and need? Can you sell your skills for cash? If so, that is how you get those small luxuries that are necessary for a rich and happy life. You could advertise with flyers on bulletin boards or by word of mouth through your circle of acquaintances, and get paid cash.  There are retirees that enjoy a much higher standard of living than they would otherwise by using their talents and skills to advantage. Some of them are even having fun.

If you are getting near to retirement and are worried about having enough, look into some or all of these ideas, and above all, enjoy this phase of your life. You worked hard and you deserve an abundant life!

Don’t Get Scammed –Block “Third Party Billing” on your Cell Phone!

The other day I was getting ready to pay my cell phone bill online, and noticed that it seemed high. I took a closer look and noticed a $19.95 “usage fee”. Now, because I am a frugal person I purposely set up my service so that there would be no overages of any kind. So, I braved the potential one hour wait time to talk to a real person and learned that this charge was for a third party billing service for “premium texting”. Sometime ago I had begun receiving texts for some blingy contests. I had taken them as text spam, bad enough in and of itself. But this was much worse. They were charging me for these spam messages and I never signed up for anything like that! Why would I?

Well, they reversed the charges, and blocked any further third party billing requests. And I learned a valuable lesson. First—check every item on your phone bill every month. Don’t be afraid to raise a bit of a fuss over any suspicious items. If you completely understand what you are signing up for, you will spot phony charges right away.

Second—call your cell service right away and get them to block all third party billing. If you are getting a new phone or changing providers don’t forget to renew your blocking request. If they don’t understand the request ask to speak to someone who does understand and can help you.

Third—be careful how you use your texting service. These scam artists harvest numbers from many different sources, some of them very legitimate looking. If you are EVER asked to provide your mobile number online, find out first what the asker intends to do with your number.

Protect yourself. Don’t let rats steal from you a little at a time. If you follow these simple steps you will be sure you are not paying for things you didn’t ask for and don’t want.

Getting the Most from Your Bank

Keep Close Track of Your Banking

Dealing with Banks can be Difficult

Dealing with banks can be a necessary evil for the forcibly frugal. Especially since the financial crisis of 2008 and the consolidations that happened in the finacial sector, more and more banks are charging for services that used to be free. Finding truly free checking is getting harder and harder. But it can still be done if you are willing to do a little work.

One Improvement

There has been one improvement, such as the opt-out on an debit card overage fees. This means that they can’t set a very small “grace” credit and charge you a large fee for using something you don’t want. Now, the default is to turn down the card if you go over what you have actually available. Just ask about the opt out at your financial institution.

What Can You Do

The best option is a local credit union. According to Wikipedia “A credit union is a cooperative financial institution that is owned and controlled by its members and operated for the purpose of promoting thrift, providing credit at reasonable rates, and providing other financial services to its members. Many credit unions exist to further community development or sustainable international development on a local level.” This means that the money in your credit union account will stay in your community. And many credit unions have free checking with your savings “shares”. Many also offer other services such as car loans and even “share to share” loans where one member can put up collateral for another member (who would not qualify on their own,) to get a loan. For more information on the credit union difference check out http://www.cuna.org/gov_affairs/legislative/cu_difference.html If you want to find a credit union go to http://www.findacreditunion.com/Home_Page_2.html

But No Matter What Bank You Choose

You absolutley must keep track of every penny in your account to avoid overdraft fees. The fact that many banks engage in predatory behavior makes it even more important to keep close watch on your balance. It might be a good idea to not use checks at all, but rather to use the opt-out noted above on your debit card, and use just the card and cash. Cash doesn’t bouce, and your debit card can’t overdraw if your opt-out. The only thing to be careful of is using the card as a credit card when the creditor doesn’t input the charge right away. That is why you must always balance your checking account as you go. If you have access to a computer and a Quickbooks program you can set up your personal finances like a business and track your checking that way.

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