Couplehood

Couple Finances: A Post From ZenHabits

Originally uploaded by Joshua Davis (new website at jdavis.info)

I saw this at ZenHabits, and wanted to share this with you guys. It's important material for the lady and me, as we make important decisions in the next few months. (If you absolutely don't want to read the whole chunk, read the red text)

A quote we heard from a seminar on money: "You're crazy if you own a car and not earning anything above $6000."

Come September, I hope I won't be crazy.

From ZenHabits.Net:

That’s the crux of this post, in two simple steps: learn how to talk about money, and learn to align your financial goals. If you can do those two things, you’ve done more than most couples, and you’ve done a lot to keep your relationship on solid ground.

1. Sit down and talk about financial goals and values. Many couples often neglect this step, even if it seems obvious and common-sensical. But because talking about finances can be uncomfortable, they leave these important things unsaid, and often don’t even think about it individually. They have goals and values when it comes to money, but they’re not examined. That’s a mistake, as one person might want to be frugal in order to save for future goals, while the other might like to spend and enjoy things now, while the getting is good. The differences often come from different upbringings, and they can be emotionally charged (see next step for more on this). It doesn’t have to be difficult, though. Just tell your partner you’d like to sit down and have a talk about the future — what your goals are and how you can work together, as a team, to achieve them. In the beginning, just start spitting out different things each of you wants — a house, kids, college education for the kids, a healthy emergency fund, nice cars, travel each year, nice clothes, gadgets and computers, etc. Then start to prioritize, and see if you can come up with things in common. If you want different things, it is important that you talk about why, and consider the other person’s desires. If that’s what makes the other person happy, you should want to make them happy — that’s the basis of a good relationship. But relationships aren’t one-sided, either, so you should be able to be happy too. The point is that both sides should be considered, and you should look for a win-win solution or compromise so that you can both be happy. It might take a few meetings to get to actual written goals, with a timeframe for each, but that’s where you want to be eventually.
2. Remove emotions from financial talk. From your first meetings about financial goals to your subsequent weekly talks (see Step 5), it’s important that the two of you stay calm, don’t get hurt or angry over any of the issues, and try to look at these issues objectively. Often financial issues are tied up in all kinds of emotional issues, stemming from childhood, from issues of security to feeling like your way is better to feeling hurt if your way of spending is criticized in any way, and much more. These emotional issues are all tangled together with financial issues, and it’s important that you untangle them and just deal with financial goals and habits. First, don’t use emotional, accusatory, or inflammatory language. Don’t blame the other person or even be negatively critical. Simply talk about your financial goals, developing a plan for getting to those goals, developing a system for dealing with finances, and so forth. Also try not to feel like you’re under attack if the other person talks about your goals or habits — let this be an open discussion, and if you feel under attack, stop and take a breath and remember that this isn’t a discussion about you personally but about how the two of you are going to meet your goals. Again, think of this as a team effort, not as a you-vs-me effort.
3. Come up with a plan to meet your goals. Once you’re able to come up with common financial goals (a huge step — celebrate!), you need a plan to get you there. This will take into account your joint income, your debt, your savings, how much you can put towards debt and/or saving each month, whether you want to cut back on certain things in order to meet your savings goals, how long you want to give yourself to meet financial goals, and so forth. Start by having a definite timeframe for each goal, and then figure out how much you need to save (or pay towards debt) each month to get to your goals. Create a spending plan (if you haven’t yet) for each month, and see if you can adjust it to meet that monthly goal. You might need to cut back on some things, or earn extra income, or both. Or you might discover that your goals aren’t realistic and you need to cut back on them, reprioritize, or push them back a bit in order to meet them. This plan to meet your goals is how you will align your daily and monthly spending with your long-term goals. It’s also a great way to resolve minor short-term disputes — you should definitely buy fewer shoes, and I should buy fewer video games, so we can buy that house in three years and travel to Europe in two years.
4. Develop a system for finances that works for both of you. In order to put your financial plan into action, you’ll need to figure out how you’re going to pay your bills, pay debt, deposit into savings, have money for various spending needs (like gas and groceries and eating out), and so forth. Someone will have to take responsibility for each part of the system (it’s better if you’re both involved, but you should find what works best for you as a couple). One person might go to the bank while the other updates your financial program (like Quicken or Money) or your checking register to make sure you’re in balance, for example.
5. Have weekly financial meetings. This is very important, and it’s a step that many couples overlook. Just because you have common financial goals and a plan and a system doesn’t mean that everything is fine. If one person takes responsibility for the finances, for example, and the other is out of the loop, then there will likely be problems down the road. I’ve known several couples like this — one partner took care of the finances and the other was blissfully ignorant … until it was revealed that they were way behind on payments and would soon have to file for bankruptcy. That wasn’t a good time in their relationship. To prevent problems like this, have a weekly meeting where you sit down and talk about finances. You can review your accounts, your spending plan, what is coming up in the next few weeks that you’ll need to budget for, any problem areas, what to do with your annual bonus, where you are with your goals, and so forth. Make sure you’re both caught up on everything, and that you’re working well as a team.
6. Above all, stay positive and be honest. Remember: you’re a team. You have the same goals and you want each other to be happy. Team members can help each other out and encourage each other, or they can rip the team apart by being negative, by blaming, by working against common goals. If you always stay positive, you’ll succeed as a team. Be encouraging, stay focused on solutions not blame, and make sure love is the foundation of everything you do.

“We can tell our values by looking at our checkbook stubs.” -Gloria Steinem

Climate Control

Drill Bang Bang Drill

The old air-conditioning system gave up the ghost a few months back after 14 years of service. We've been making do without climate control pretty well (and have been for the past year or so), and honestly, we didn't miss it.

Over the past two weeks however, the nights got really warm. The missus would wake up (apart from the usual leg cramps and hunger pangs) in face-fulls of sweat. It was the same case with me. I woke up often with my back slick with sweat. Mum didn't say much, but I knew she had been having uncomfortable nights as well.

So, we thought about it for a while, and decided to pop in a new machine. We saw it this way: on one hand, while the adults didn't mind the heat that much; we were more concerned about the little tikes that were on the way. We're on the second floor, see, and the awkward block design blocked cool wind from all sides except the one facing the road (air from main road = bad air).

We all chipped in, and got a new system. Not a necessity by any means, but if it meant everyone getting more comfortable at the end of it, it's worth it.

Hopefully we'll get a good night's rest tonight, once we're all cleaned up. A pram, a cot, and a few napkins, and we're all set to go.

You're Free If You Choose To Be

Freedom
Originally uploaded by ΛβΠEL

I love the fact that we've set priorities and decided on what's important in our lives.

The Missus and I had an interesting chat over the finances yesterday. I was tired and could barely handle a conversation. Stupidly, I started with "we should sell the car" - but she was sharp enough to understand that I had meant, "you should stay home to look after our boy".

We bounced ideas to an fro, and after a while, it was clear both of us were waiting for this conversation. Both of us were trying to solve the budget/finance puzzle, and we weren't sure where the other stood on it.

It was clear now. We were both ready to put first things first, and trim off excesses to make sure things were done right. So, if it meant the car must go, then the car must go.

There's freedom if you choose to have it.

 

The Universe Has Got Your Back; The Time Is Now.

Originally uploaded by Mulad

I caught this post from Scott Berkun's blog, about his foray into independence. I've always been insanely envious of those who decide to leave the rat race and do their own thing. Suffice to say, I'm working on it, though I'll admit that plans have been delayed somewhat, and I'd had to take some short term measures.

I love this point he made:

"No one will tell you what you’re capable of. No one told me to quit. No one told me to write books. None of the interesting things I’ve done started by someone telling me “you should do X.” or even “you are capable of doing X”. I’d been thinking about this for years but was waiting for some message from above to show up like the billboard in L.A. Story, saying “Scott. Now is the time. The universe has your back. Go do it”. But I’m still waiting for that. I’ve learned that not having support from others is not a reason not to do try something. I have to do the work, so my belief is enough."

Nice.

The missus is supportive - as far as my career goes, she's very much in support of whatever I choose, so long as we've spent enough time sorting out the details and talking it through. She's a tough interrogator, she is.

I'm still working on some details in the planning room, and I'll talk more about it once it's ready.

Wedding Advice: By The Gohs

We've been very blessed to have many couples drop me tips on how to make our wedding work. I don't think preparations would be as smooth as they are now if not for their advice.

Today, I'd like to share something Liang Song discussed with me over email. He's got some great tips to share on Church weddings and family finances.

1. Wedding dates + Church events = Fatigue(?)

Do weddings have to be planned around church events? We grappled with this situation too. On the one hand, our personal event should not overshadow or cripple church events and functions, especially when we also depend on church brethren for help. On the other, if church events get their way over personal events, are we not then elevating the importance of church over personal life? It can be a difficult balance, especially so when the other ministry leaders were not able to help put down dates, it becomes quite difficult on one's end to put down some dates, especially since all other relevant planning revolves around the planned date.

We were finally able to get a date of 3rd June. Thank God for the planning, as it happened to be when Fuhui was fairly free of school activities. Similarly, it was the holiday period for me in RP, so there was less work then. VBS would start on the week of 4th June, so the brethren were able to help. We also reduced the number of brethren helping out, by specifically requesting for no choral specials nor orchestral accompaniment.
Don't worry about fatigue. There is a joy in helping out brethren, especially on their big day.

[Adrian's Note: I agree that it's a tough balance. To make matters worse, Angela's job at the school doesn't leave much of a choice for the wedding date, hence the December date (peak period). We're glad for the Singapore Swimming Club, not only because it's near both our homes, but setting up and cleaning after will be taken care of. Good foresight methinks, because I understand that there's a teens camp just before our wedding.]

2. Credit cards - Journey to an insurmountable debt?

I have come across arguments which say credit cards are good, and also those which say credit cards are bad. Of course, working through the arguments back down to the premises and assumptions, you find that they come from different camps. My view is that, as a financial product, it is somewhat neutral, but capable of doing good (of course, this is questionable) and definitely plenty of bad (no questions on this, though). That is to say, there is nothing wrong with subscribing to a credit card, but the wanton use of it will lead to debt, especially if you splurge on gadgets and such.

Personally, I use my credit card to pay my utilities bill, with the advantage that it offers me cash rebates. My brother also expounds the fact that by using credit cards, you don't have to actually pay until sometime later, unlike other payment methods; of course, it is this very facility that leads many astray and end up spending much more than they can afford.

Using credit cards for big-ticket purchases via instalment payments is also a useful feature. Of course, miss out on one payment and watch the accumulated amount climb skyhigh with those interest rates! Also, it is very easy to sign off on many big-ticket purchases, one after another. For us, we don't buy what we cannot already afford, i.e. we already have the cash to pay for the purchase.

Having said all these, it amounts to one thing: financial discipline. One must have the discipline to commit to a budget, and one must have the discipline to draw up a budget that makes sense. I consistently budget for much, much less than what I bring home, to ensure that I have surpluses that can be drawn upon in an emergency situation, or just to save up.

[Adrian's Note: Credits cards are evil about 90% of the time, except when they give good discounts - but that would usually require you to purchase really expensive things. The last time that happened was when I was shopping for the proposal ring, where I enjoyed an eye-watering discount. I'm not closed to the idea of employing the credit card limits as a budgeting tool, but that only works if you set your credit limit to $500 and endeavor to pay everything by card.]

Technorati Tags: family, how-to, home building, husband and wife, marriage, wedding planning

Tips for Saving Money on Your Wedding

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Start Small if You Must, But Be Ruthless About It.

I was chatting with a recently wedded lady at work, and we traded some tips on Wedding Frugality. We eventually agreed that surely no one wants to come off having a cheapskate-ish wedding - it just doesn't give the occasion due honor, and everyone invited will be wondering if Daddy fired the proverbial shotgun.

Right. I'll hurry to the list now.

1. Ask for Advice.   They say "hindsight is wisdom too late" - it's true for the married couple, but great news for you. So, if you have many recently-wedded couples around you, you're blessed. Ask them for as much advice on which corners can be cut, and what needed more spending on. Surely, this is subjective, so you'll want to ensure that you get as many opinions on the matter, so you can make you own decisions. (Saving Potential: ZOUNDS!)


2. Be a Disciple.   A neat idea is to volunteer to help a soon-to-be-married couple to see what their plans and considerations along the way. Get experience and lessons live on the scene. Also take note of the pitfalls of things that were taken for granted, and the success of some ideas that were never intended. (Saving Potential: THOUSANDS!)


3. Start Early.   We started planning the wedding two years ago, and then we were delayed. It was a blessing in disguise, because we were able to store up some cash, and do a lot of research before the wedding. And, if you're early, you won't need to pay premiums to rush stuff at the last minute. (Savings Potential: Couple o' Thousands)


4. Work on That Budget and Theme, and STICK TO IT.   It's easy to get distracted by the many things that make a wedding pretty, but trust me, just like clothes,  they may all look nice, but they won't all match. It'll be good to have some guiding principles while you go shopping or researching. Some good guidelines are: i) a strict budget, and, ii) a design theme. Better yet, if you've got spending commitments in motion (house, car, etc) make sure that budget's well planned. (Saving Potential: Couple o' Thousands)


5. Spot Market Trends and Peaks in the Wedding Market... And Avoid Them.   Great frugal tip. If you're living in a superstitious culture like mine, there are very "unlucky" periods that ward off the faithful like the plague. Right now, for example, is the "Hungry Ghost Month", where dealings in anything that needs good fortune (i.e. new job, lottery, wedding - you get the idea) are generally postponed to the end of the month. Thankfully for us, this also includes wedding photo packages. We just got a humongous 80% discount for one of the items on our list, and we imagine that it could have been larger savings have we done thought of this tip last year at this time. Too bad for us, we got much of our stuff during the peak period in December. (Saving Potential: Many Hunderds!)


6. Save on Things You Can Do Yourself, or Ask Your Friends for Favors.   This supposes that you have some talent you can use in preparation for your wedding, or have friends who do. For example, Chai Heng decided to design his own card, then printed and custom cut the cards himself. That act alone might have saved him hundreds of dollars. My colleague printed her own cards and bulletins too.For us, we've asked Mrs Sng from our Church to design our Church decorations, and she's only charging us for the cost of the materials. Friends love to participate in your wedding, and they'd love to share your joy by chipping in. So let them - and if they don't, ask them. (Saving Potential: Couple o' Thousands)


7. Let Your Buddies Know You're Saving For Your Wedding.   I can't stress enough how less "going out and having fun" with your buddies will save you loads of money. When I got low on expendable cash, I had to tell many people that I won't be able to go out as much (and I don't go out much at all). I wish I did that way before! Your friends may not respond by paying for your meals, but they'll be considerate on the venues they go with you and even remind you occasionally about saving. (Saving Potential: Hundreds!)

Technorati Tags: wedding, adrian and angela, family, finances, life, logistics

Finances: Short Term Investing

Keep it in the Bank

Ramit's post mostly talks about students' questions on investing extra cash from their loans, but this is very much applicable to couples who have stored up mounds of cash in their bank accounts in preparation for the wedding.

It's tempting, I can imagine, to want to take advantage of cheap stocks and make quick cash - but if lessons are learned best when they are hard, many of my friends recently have  learned very well not to put valuable eggs in a rocky basket.

A summary of the key ideas from Ramit's post, and good advice overall:

1. Short-term investing is generally a bad idea
2. Setting a rapid timetable to get quick returns is a bad idea
3. "Safe" investments may not work out to be worth your time

In short, learn and build a system for your personal finances that will take care of you for a lifetime.

Technorati Tags: family, life, preparation, finances, wedding