Finances

Couples And Money: Pillow Talk With Big Daddy

Couples and money. See what this couple had to say about money management.

In honor of Valentine’s Day, my husband agreed to let me share some of our private money conversations, as long as I don’t go too far. Big Daddy is the nickname I have for my husband, but for those of you who don’t know, his name is Willliam. Now because of our busy schedules, most of our talking is done late at night. Get your mind out of the gutter, hence the title Pillow Talk. When we decided to write this blog post, it took many different directions. I wanted to vlog but he didn’t, so my blogging coach Javacia, suggested an interview style post. With his approval that is what we went with. So here are the musing of late night chatter between me and Big Daddy. I call it interview with a Vampire lol just kidding.

TBT: Do you remember when we were broke and could barely keep a roof over our heads?

BD: How could I forget? You won’t let me. Every time I get ready to spend money you always remind me of those lean years.

TBT. I remind you cause one of us has to have sense when it comes to the money.

BD: I do have sense girl quit playing. I am not going to do anything to drive us back to the poor house.

TBT: You better not, cause you will be on that drive by yourself, think it’s a game.

BD: Remember you said for richer or for poorer till death do us part.

TBT: Yeah I remember, so what color would you like to be buried in. You can always ride to the poor house in a hearse.

TBT: What would you advise couples who find themselves in the same situation?

BD: Well, I would tell them what I heard you say while we climbed out of our situation and that was, ” This won’t last forever, we have just got to stick with the plan.” (Y’all, I can’t believe he remembers that he doesn’t remember what I want from the store most of the time)

BD: A couple has to have a plan, but before they can begin to plan they must have a goal. Goal setting is important in finance. Our goal was to get out of debt, start saving money, stick to a budget and plan for legacy. I can remember sitting down with you trying to figure out where all the money was going. I won’t point fingers but what I will say is that both parties have to acknowledge their part in getting into the situation they are in.

TBT:  Yes, all of that is true. We both came from backgrounds that caused us to spend for different reasons. Mine was because I was used to having the best of everything and you well you weren’t. Both need to sit down and figure out what is important and what they want their financial life to look like.

TBT: If you had to advise a young couple on how to achieve what we have achieved what would you tell them.

BD: Girl you not sleepy yet? Ok I know you just want to see if I was paying attention all these years. Here are my tips

  1. Be open about your spending habits before you say I do. I think if we both had really known how the other one viewed and spent money we would have avoided some of our problems. Also, couples need to make each other aware of any debts they are bringing to the marriage. Don’t be afraid to tell the other person if you do or don’t know how to manage money.
  2. Be clear on who will pay what. If one earns significantly more than the other divide the bills accordingly. I remember we were in so deep that you wouldn’t let me touch any money until all of our living expenses were paid. Then we had to work on my debts and then if there was anything left we divided it. We did this until all of my debts were paid because you took the easy way out and filed bankruptcy.
  3. Set financial goals together. Know what you value that way you can spend or not spend accordingly. You and I value the same thing, family and leaving a legacy so it was a no-brainer on how to set our finances to do just that.
  4. Set a budget. I swear if I go one cent over budget I know you will be angry. It may take some time to figure out a budget that works for you but you have to keep at it until it works. Don’t give up!
  5. Make financial decisions together. If there is a purchase to be made, discuss it. I remember when we used to decide how much we were going to spend at the grocery store. You would have that darn list, all those sale papers, and coupons. I would hate going to the store with you, but it was fun watching you save on the grocery bill. I used to think it was dumb that we talked about every purchase, but when I look back it was one of the best things ever.

TBT: I think those are great tips Big Daddy. We both learned some very important lessons back then that have served us well over the years.

BD: Yeah we have girl now can I go to sleep?

TBT: Yeah boy go to sleep.

BD: Give me some lip and turn off that light so I can get some shut-eye old crazy girl.

Well there you have it, I always give my tips but on this Valentine’s Day, I let Big Daddy give his. I hope you couples out there enjoyed his rare appearance on the blog. Happy Valentine’s day from The Threadfords!

*Part of Financially Savvy Saturdays on brokeGIRLrich.*

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Personal Finance Love

Loving personal finance is probably the last thing on your mind, especially if your finances are in a shamble. I'm here to tell you there was a time when I didn't love my financial situation. When I worked through my obstacles, I developed a love of saving, budgeting, and investing. In this article, I tell you just how you can develop a love of personal finance too.

We have made it to the big “Love” month. The most notable holiday this month is, of course, Valentine’s Day. This is also Black History Month, where we celebrate and observe the most notable African Americans and moments in history. Finally, the last week of this month is America Saves Week.

I know you are probably wondering why I am talking about Black History Month in a personal finance blog. Well, just flow with me, because all of this ties together. From Black History Month all the way to America Saves Week. As an African American, I am troubled by the financial state of my people. That is part of why I blog. There are not a lot of people who look like me, that don’t have the financial knowledge I do. I want to do my part to close the wealth gap in my community. This month, I will feature other African Americans who are doing their part to close this gap as well. We are part of what will one day be history, and it is important to me that I share these resources not only with my African American readers but to all of my readers.

Later on this month, I will write a post dedicated to the wealth gap and giving my ideas on how we can close that gap. See, I told you Black History Month has to do with personal finance.

In all communities, talking about personal finance is taboo. No one wants to have those conversations, but they are much needed. This month, I want us all to begin to love personal finance. I love everything about personal finance and I want my readers to begin to have a love for it too. Let’s create that dialogue.

With Valentine’s Day being this month, why not develop a love of saving, budgeting, and investing. See how I tied all that into this one month? A while back, my husband told me that I never include him in my “lil” blog (his words not mine). This month, he agreed to sit down with me and write a post about couples and money. We are still working on it and I don’t want to give any of it away but know that it will be great.

Finally, America Saves Week is February 26 – March 3. By now, you should know that I love to save in every area that I can. From groceries to utility bills, I always find ways to save.

America Saves, seeks to motivate, encourage, and support low- to moderate-income households to save money, reduce debt, and build wealth. The research-based campaign uses the principles of behavioral economics and social marketing to change behavior. America Saves Week is coordinated by America Saves and the American Savings Education Council. Started in 2007, the Week is an annual opportunity for organizations to promote good savings behavior and a chance for individuals to assess their own saving status.

So, as you can see everything involved with this month has to do with personal finance. Let the love flow and begin loving your personal finance.

*Part of Financially Savvy Saturdays on brokeGIRLrich.*

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Financial Wellness Checklist

Wellness not only pertains to your body and your health. Wellness pertains to your finances as well. Ae we close out this January, take a moment and do a financial wellness checkup

 

The first of a new year is a great time to think about how to manage your personal finances. Developing a straightforward money management system (or breathing new life into an old one) can help you make smart decisions about budgeting, saving, borrowing, and investing.

Here are six tips to help you organize your financial strategy this year.

1. Track your spending.

The most basic money management strategy is to track your spending and use that to help you develop a budget. To get started, use a simple spreadsheet or a personal finance app to calculate what you spend in basic categories, such as groceries, shopping, eating out, and entertainment. Keep your receipts so you can track cash purchases, and be sure to include your online spending as well.

Reviewing your spending not only tells you where most of your money is going, it can also help you catch mistakes in your bills. Dedicated budgeters say they catch hundreds of dollars’ worth of mistakes every year. Take a minute to review your spending first thing in the morning, right before you go to bed, or every Saturday morning—just make sure you do it regularly.

2. Set financial goals.

Establishing financial goals will help you stick to your budget because you will know what you are saving for and why. You are likely to have a mix of short-term goals, such as buying a new laptop; mid-term goals, such as taking a vacation; and long-term goals, such as saving for retirement.

Set a plan for your goals, but be sure that your plan is realistic and flexible. It’s better to progress slowly than to get frustrated and stop saving. You may want to set a monthly dollar amount and put that money aside before you start spending. For some people, it also helps to put that money in a different bank account—one not connected to online banking, for example—so that it’s not easily accessible.

3. Talk about your budget.

Talking about your budget and goals with a spouse, partner, friend, or financial advisor is essential to get organized, stay motivated, and keep your spending under control.

Budget discussions will differ depending on your financial situation and the number of people involved. For example, a single person may only need to meet with his or her financial advisor once a month, whereas a couple with two children may need to discuss expenses and bills every week.

Whenever it is, make sure you are consistent and thorough. You should come prepared with your transactions accounted for and your bills ready to be paid. You should also review your money goals, your progress, and how long it will be before you’ll meet your goal.

4. Make a money calendar.

An important part of money management is paying your bills on time every month. Late payments can lead to extra fines and can also impact your credit score. A money calendar is a tool that is both simple and effective, and it can help you keep track of your bills. Create a calendar with every due date, and then set an alarm to notify you to pay on that date. If you use automatic deductions, make sure to note those items on the calendar as well.

5. Check your credit score.

Your credit score is an important aspect of money management because it helps determine if you can qualify for new credit and at what interest rate. Your interest rate directly impacts the affordability of your loan, with higher interest rates making a loan less affordable.

You are entitled to one free credit report annually from each of the three credit reporting agencies (CRAs) through AnnualCreditReport.com, and you can also purchase your credit report and credit score directly from Equifax or another CRA. Order your credit report and review it. If you see any negative information, such as late payments or overdue accounts, make a plan to settle those debts as soon as possible.

As you pay down those debts, try working with your creditors. For example, if you have a credit card with a high-interest rate, consider calling your credit card company and negotiating a lower rate. You should also tell your lender if you need help paying your debt because the lender may offer you better repayment terms if you communicate about financial hardships.

6. Identify your spending triggers.

Discretionary spending should be built into your budget so that you feel free to spend occasionally. In order to stay within your limit,  consider what causes you to spend more. The reasons may be social, environmental, or emotional. Anticipate your spending triggers, and identify something enjoyable that you can do when the triggers arise. For example, if you always stop at the local coffee shop at 9:30 AM, consider bringing a thermos of coffee with you from home instead. It may take some time and preparation, but knowing your habits will help you avoid impulse buys.

While successful money management won’t boost your income, it may enable you to stretch your dollars further and keep your financial wellness plan right on track. Now that you’ve gotten started, what are some other ways you’re keeping yourself financially on track throughout 2018?

Disease Called Debt
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6 Effective ways you can simplify your financial life

Today’s post is contributed by Amy Nickson, a passionate writer on finance. Amy is a professional blogger who has started her own blog and also works as a contributor for the Oak View Law Group. Please share your opinions by commenting below.

Everybody says, declutter your finance to ensure a secure financial future, but nobody says how to do that.

Well, it is true that the simpler your financial life is, the more secure financial future will be.

But, the problem is, finance is one of the most complicated subjects in our life. It is not easy to make it simple. You need to be determined first before simplifying your financial life. Because you may need to follow some ways that can be difficult at the beginning.

Here are 6 ways you can simplify your financial life easily:

1. Consider a frugal lifestyle

Frugal living is the process that helps you to learn live on less. It doesn’t mean that you will have to give up all the luxuries of your life. Frugal living is about getting the maximum value for your money. Being frugal doesn’t mean that you’re depriving yourself, or you have to sacrifice all stuff you like. It is just giving up the impulse buys and trying to lower the expenditures wherever possible. You will also be able to learn how to differentiate between the needs and wants. Often people get into the mindset of impulse buying for pleasure or minimize the stress level. Being a frugal person, you can become a wise spender and will no longer find happiness in impulse buying. This way, you can become a financially responsible person.

2. Cut down multiple credit cards

Credit cards are the convenient tools that can be used to buy things easily. These days, reward credit cards are becoming popular among people. To get bonus points, cash back and rebates, people are now a huge fan of reward credit cards. But, do you know that these reward cards are nothing but marketing gimmicks created by the credit card companies to force people to become impulse buyers?

Thus, it is advisable to cut down multiple credit cards. Use your credit card only when you are sure that you can make the payment within the stipulated time. By doing so, you will be able to avoid accumulating painful credit card debts. Thus, you can move ahead to a peaceful financial life.

3. Use cash as much as possible

Today’s technology makes our life cashless, which is not a bad thing. We are using e-wallet, online banking services, online shopping etc. to make our life more convenient. But going cashless doesn’t mean you can spend money meaninglessly. Sometimes, virtual banking or shopping makes people forget about their affordability. As I said in previous points, people use credit cards randomly without knowing how they can repay the bill on time. Thus, most of the financial experts now recommend people to use cash whenever possible.

Cash plays a vital role to simplify your finances. If you are an impulse buyer, who always fails to stick to the shopping list, then next time carry cash that you would need; doing so, you will not overdo with shopping. Because, when you have a certain amount in your wallet, you know how much to spend. If you can’t resist buying a thing and you see you don’t have enough money in your pocket, you will not be able to buy that. This way, you can stick to the shopping list that you are supposed to do without going spendthrift.

However, it is true that carrying cash is risky to some extent. But, you can use checking account where you can deposit the cash and use whenever you need.

4. Build an emergency fund

Why will your financial life get messed up every time? If I am not wrong, every time when an unexpected emergency came in the past like your son broke his leg, car died, thermostat needed a replacement, you were like “where to get money”. To overcome the situation, either you used your credit cards or took out the costly payday loan.

Thus, you may meet the financial need but you dug the debt hole.

I am not saying that using a credit card for a definite purpose is wrong, but if you don’t make the payments on time, you will be in debt soon, as I said earlier.

Payday loans are more dangerous; they come with high-interest rate and you have to pay back the money after you get your next paycheck. If you don’t, you will be in debt cycle. In addition to this, most of the online payday lenders are tribal or illegal; they can grab your personal information to pull out all the money from your bank account.

Thus, it is advisable to nurture an emergency fund to combat with all the emergencies that come your way. If you lose your job or want to switch a job, the money in your emergency fund will give you a sense of confidence. You don’t need to take out a loan or accrue debt to meet your needs.

However, you should have at least 3-6 months salary in your emergency fund to strengthen your financial backup.

5. Pay off all your debts

Debts are messy and clutter your financial life. Thus, you should pay them off to simplify your financial life. Well, accumulating debt is easier than paying them off. To do so, you have to follow some debt relief strategiesDebt payoff strategies are not simple, you may feel overwhelmed. Thus, it is important to analyze your debt status and income before choosing a debt relief method.

If your life is too stressed out for multiple debts and you need to get rid of them soon, then go for debt consolidation or settlement. However, to do so, you need to have a good income flow.

If you have debts that you can manage yourself without taking help from professional debt relief companies, then you can go for debt avalanche method.

In this method, you need to target the highest interest rate debt first. Make more than the minimum payments toward the highest interest rate debt while making the minimum payments on rest. Continue the process until all the debts are paid off.

By doing so, you don’t need to pay the fees to a third party company to get rid of debts.

6. Save money rigorously

The more money you save, the less financial worry you will have in your life. And the less financial worry, the easier to simplify your financial life.

Thus, financial experts say that you have to save money, since it is important to secure your financial future (like retirement), fund your child’s education, and pay your medical bills.

So, try to lower unnecessary expenditures to save your hard-earned money.

Contribute to a 401(k) account for retirement, open a 529 college savings plan for your child education, and nourish an HSA (Health Savings Account) for medical cost.

Also:

  • Save money by using coupons.
  • Set aside a certain amount from your monthly budget.
  • Try to save money on food by using the leftovers to make a new dish and eating at home.
  • Save money on gifts by making DIY goodies.

These are all small initiatives that create an effective impact to simplify your financial life. Try them out and let me know how they work.

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Month 6 Review What You’ve Done

You have made it to month 6, now it is time to review what you have done in the past 5 months. Write out all of your accomplishments. Redo net worth and cash flow worksheets using your current information. Compare the results with those from when you began six months ago. You will feel better knowing you are in control of your money and financial life. That provides the motivation to make your money diet an automatic part of your life. Now you won’t mind getting on those money scales we talked about in month one.

Join me tomorrow for a guest post from another personal finance blogger and after that, we will move to home buying tips for the rest of #bloglikecrazy

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Month 5 Insure The Future

Make sure you and your assets are protected. Insure your future

 

The best financial plan can be ruined if catastrophe strikes. I’m sure you don’t want that after all this hard work you have put in getting on track. You have to protect your income and assets with insurance. You must insure the future at all costs. Here are a few types of insurance you may want to invest in.

Disability

Buy as much disability insurance as you can afford. Be sure the policy provides benefits until you reach the age of 65 or for life. Make sure that it covers you if you can’t work.

Life Insurance

Nothing disturbs me more than to see a go fund me account for burial expenses. I don’t care how old you are, you need life insurance. If you have children, they need it too. The rule of thumb is to have coverage that equals five to seven times your annual income.

A term policy is often best for people in their 30’s who have young children and need a lot of coverage but don’t have a lot of money for premiums. Term insurance will cover you for a set number of years but gets more expensive each time you renew the policy.

Cash-value insurance is ideal for those who can afford coverage for 20 years or longer. Part of cash-value premiums grows tax-deferred.

Homeowners Insurance

This policy should cover what it would cost to replace your home and personal property now. Don’t own your home? No worries, get renters insurance. This will at least cover the contents (your belongings) of the house or apartment you rent.

Automobile Insurance

Liability coverage is key, so make sure you have enough. This is the mandatory coverage set forth by your state. For both comprehensive and collision coverage, take the highest deductible with which you feel comfortable.

Consider dropping comprehensive and collision if your car is more than 5 years old and has lost most of its value.

Estate Planning

If you don’t have a will, a power of attorney and a living trust, see an estate attorney. Preparation costs range from $500 to $2000 or more, depending on the complexity of your estate. If you already have these documents, review them and make any changes needed to bring them up to date.

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Month 4 Taxes And Investments

Save on taxes and invest conservatively in month 4. Learn how to make your money work for you

 

Continuing with our seriesSix Months to Financial Fitness, we’ve moved to month 4 where we will take a look at taxes and investments. This is a simple task for month 4 but is very necessary. This month, I want you to review every item on last year’s return to see how you can cut your taxes.

Taxes

Keep track of deductions, especially those for cash expenditures, such as mileage, faxes, photocopies and charity. It all adds up and every little bit is a big help.

Contribute the maximum to tax-deferred retirement plans.

Investments

Consider your investment strategy. If you’re intimidated by the market, start with an index mutual fund. One that conservatively invests in stocks in the S&P 500. You can move on to other kinds of mutual funds later.

Be sure to come back tomorrow for month 5 where we will talk about insuring your future.

 

 

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Month 3 Reduce Expenses And Debt

You have to reduce your expenses and debt in order to gain lasting financial controlMonth 3 is crucial. This is the first month you’re going to make changes. The main thing to remember when you reduce expenses and debt is to not make any unrealistic spending cuts at first. Pick four or five problem areas, such as restaurants, clothes, and hobbies. Work on reducing a couple of expenses each month.

Get in the habit of smart spending, making decisions before you spend. Ask yourself, “Is what I want to purchase worth the money I lose for my family’s and my future goals?”

Start Reducing Debt

Avoid making only small minimum payments on credit cards. It can take up to ten years to pay off your current balance. If you charge $30 for dinner, deduct that amount from your checkbook when you get home. Pay the full amount on your credit card bill when you receive it. This strategy will make you think twice about casually dining out. Also, ask credit card companies to reduce your interest rates and forgo fees.

Begin paying regular expenses automatically. Have expenses, such as insurance premiums deducted automatically from your paycheck or bank account.

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Month 1 Get On The Financial Scales

If money were pounds, how would you fare? Ok if you are in England money is pounds. No Matter where you are or what you call money, get on the financial scales and see your money weight.

I know some of us may need more than 7 days to get our finances in order. Some of us may want to take a more calculated approach. If you want something more calculated then this series, Six Months to Financial Fitness is for you. Over the next six day’s, you can see how in the next six months you can be on the road to financial freedom. The first month, you need to get on the financial scales. I know if you are like me, the scales are not your friend. Good thing we are not tracking pounds because that scale is not for me.

It’s no wonder that we’re all so worried about money, We’re living longer, retiring earlier and expecting more out of our retirement. At our high rate of spending and low rate of saving, 75% of us will retire with less than half of what we need. The key is to do something about it now.

Month 1 Get on The Financial Scales

Create an overview of where you stand financially by creating net worth and cash flow statements

Net Worth

Set up separate folders for your bank, investment accounts, credit cards and any real estate and cars that you own. Make up a worksheet. On the left side, list the fair market value of your assets.

Example: Estimate conservatively what you could sell your how for today (not what you would like to get for it). Add up the numbers. The result is your total assets. On the right side, list your liabilities, including mortgages, credit card balances, car loans and other debts. The result is your total liabilities.

Your net worth: Subtract your total liabilities from your total assets. This is your net worth

Cash Flow

Once you have calculated your net worth, determine how you are spending your money on a regular basis.

How To: Set up another worksheet. On the left side, write the 12 months on separate lines, starting with the current month and going in reverse chronological order.

Make two headings at the top of the page: Total Monthly Deposits (credits) on the left side and Total Monthly Withdrawals (debits) on the right side

Step 1: Gather your bank statements for the last 12 months. Under each column on the worksheet, fill in the deposits and withdrawals month by month. Add the columns to get your yearly credits and debits.

Step 2: Subtract from both columns, the annual amount withheld for Social Security and any income taxes paid by check in the last 12 months, This process provides you with a more accurate indication of your spendable income and those expenses over which you control. Add to both columns all other nontax expenses withheld from your paycheck, such as company insurance premiums.

Step 3: On the credit side, add savings and retirement-plan contributions withheld. On the debit side, either add or subtract the increase or decrease in the amount of your consumer debt during the past 12 months.

Step 4: Examine the results: your after-tax annual income and total annual expenses. Income must exceed expenses, or you are heading for financial trouble.

Here is a strategy for you, track your weekly expenses in detail for the next five months to find out where your money goes. I know five months in a long time, but I promise you will be better off financially for doing it. Write down every cent you spend in a small notebook. Don’t try to do anything about the pattern at first.  For those following the six-month plan, it’s best to take at least two months to begin to change your spending habits

 

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Develop A Debt Reduction Strategy

Don't forget to develop a debt reduction strategy while you are getting your finances in orderWe are rocking and rolling our November in order to set ourselves up for our best financial year in 2018! Today I want us to take our 20 minutes to develop a debt reduction strategy.

Now that you have figured out how to spend less than you earn, you may be wondering what to do with that extra money you are saving. I would suggest paying off any lingering debt. There are a couple of ways you can do this.  You can start with the debt’s that charge the highest interest rates. This is normally your credit card bills.

Set target dates for when you want each debt to be paid. Don’t be too ambitious or you will set yourself up for failure.

Below, I have attached a live stream masterclass that I held earlier this year. It has some great strategies for you to reduce your debt and start saving. Be sure to take a look at it and let me know what you think in the comments.

This is day 5 so we have two more days in this series. Come back tomorrow when we will establish a savings plan.

 

Death To Debt Masterclass

Simple debt reduction strategies for do-it-yourself debt reduction

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