Dave Ramsey video about buying cars (Carole)

So, after a long winter's nap, here I am with a great video from Dave Ramsey on buying cars.  Hope you enjoy it and get a little bit of inspiration!

Money and Marriage, Part 3 (Guest Post by Alisha)

Welcome back! This is my last post about how my husband, Neill, and I handle finances. I've already dished on the money situation when we dated and then when we moved in together and in this post I want to share with you how we are handling things now that we are married.

For Neill and I, being open and honest with each other about our finances and our financial goals is very important. So, we've been having lots of frank conversations about spending, saving, and goal setting. We try to be 100% transparent with one another and we've decided to take a big step that will help us with
this.

In my last post, I mentioned that we opened up a joint saving account a while ago that we've used in addition to each of our personal saving accounts. Now, however, having our individual accounts just doesn't seem to feel right anymore. Even though both of us have said that whatever we save individually is really for us, we want to make that thought a reality. So, we decided to totally revamp our organization.

With this new set-up neither one of us will keep a personal savings account. We'll only put money into our joint savings. This certainly wasn't something I would have wanted to do originally, but right now it makes the most sense for us.

We decided to keep a total of two joint savings accounts so that we can save money for different purposes. One is a Save for a Rainy Day Account. This is our six-month emergency fund that is not to be touched unless we have . . . an emergency. The second is a Save to Spend Account. This is where we can save for vacations or a new piece of furniture (like maybe that couch I mentioned in my last post!). The only catch? Our numbers aren't quite where we would like them to be. So, we've started a friendly-competition to get into savings gear. We each have a savings goal (different, to accommodate our salary difference) and the first person to reach their goal wins $500 dollars out of the Save to Spend account.

A bonus of merging our savings is that it motivated us to finally set up an emergency fund. Since Neill is still the primary wage earner in the family it is really important to me that we have an emergency fund set aside. We've always known where we might pull money from if we found ourselves in a dire situation, but this is the first time actually pulling the money, setting it aside all in one place, and taking a hard look at whether or not we have enough. I'm really excited about our new plan because I feel like we are a bajiliion steps closer to following through on our new years resolution to be financially secure.

As you’ve probably already gathered, I don't have any secrets to successfully negotiating finances in a relationship. But for us, communicating and being flexible seem to really help. Since we both keep an eye on our finances and discuss them pretty regularly we are able to realize when something isn't working. And, we aren't afraid to switch things up a bit. Who knows? Maybe in another year we'll decide to merge Finances can be a touchy subject to talk about and I think the uneasiness surrounding money-talk makes it extra difficult for couples. So, I thought I'd quiet that little voice in my head that says discussing money isn't appropriate and lay it all out there for everyone. I’d be lying if I said that it was easy! But, I had a good time writing these posts and I hope you've enjoyed reading them! Please do come over to Married in Chicago and say hello from time to time. I’d love to hear from you!

What are your thoughts on merging finances completely? Do you keep a private saving account? What
motivates you to save money?

Alisha is a 20-something newlywed pursuing a doctoral degree in psychology and blogs at Married in Chicago.

Money and Marriage, Part 2 (Guest Post by Alisha)

Hi everyone! I’m back with the second part of my story. In my first post, I shared how my husband, Neill, and I handled money throughout the first two years of our relationship. Once I finally found a job, we realized that we seriously needed to get real about how much money we made versus how much money we spent. So, we made our very first budget in good ol' Excel!

To do this, we made a list of all of our monthly expenses. We had 24 in all--from groceries, restaurant, phone bills, household bills (e.g., electric), car insurance, medical bills, money we put in savings, public transportation costs, etc. Then, we looked through our bank statements and wrote down the amount we
spent on each category for the preceding three months. Finally, we averaged these three numbers to determine how much money we typically spent in each category. For example, on groceries we spent $613 one month, $498 the next month, and then $402 the month after that. This averages out to spending $504.33 every month on groceries.

Then, we looked at how much we were spending each month on average for personal expenses (e.g., buying a new shirt), bills, and joint expenses (e.g., going out for dinner together). All of this gave us a good snap-shot of what we were spending. For example, we discovered out we spent an average of $970 dollars a month on joint expenses (groceries, restaurants, gas, and miscellaneous items) and we had an average of $3,566.17 hundred dollars of household bills per month (mortgage plus all the monthly bills).The next step was to look at the money going in and compare it to the money going out. Obviously, we hoped to find that the money coming in far outweighed the money going out so that the extra money could be spent on frivolous shopping sprees put in savings.

But, no such luck. Taking a cold hard look at our bank statements and comparing our in-put versus our out-put helped us realize that if we wanted to save the sort of money we wanted to save, we had to readjust our monthly spending habits. Since most of the monthly bills were fixed, one area that we targeted was how much money we spent at restaurants. For example, we reasoned that if we were spending an average of $500 on groceries every month, we probably didn't need to be spending an average of $300 dollars on going out to eat. So, we developed a budget to help us curb our spending on non-essential items so that we could put more money in savings.

Awesome, right?

Eh.

I must admit that I don't think we ever truly stuck to our goal spending in each category. Keeping up with a budget every month is time-consuming and hard work! But, our first foray into money management together was still really helpful. It raised our awareness and forced us to talk about our financial details more than we ever had. It set a precedent in our relationship that each of us would be open and honest about finances. Plus, it gave us a chance to really discuss what our financial goals were. Looking through our past spending also showed us that a lot of what we spent money on was joint expenses. So, we decided to open up a joint checking account.

With the addition of the joint checking account, we had five bank accounts between us! We each had a personal checking account, a personal savings account, and then one joint checking account. Our respective paychecks got automatically deposited in our personal checking accounts and then each time we got paid we would transfer a certain amount of money to the joint account, a percentage of money to our personal savings, and keep a percentage of money in our personal checking accounts to pay our credit cards and use as we pleased. We would use the joint account to pay for groceries and anything we did together. But, the boundaries were (and still are) pretty fluid. If I needed something but had no cash left, I was free to use the joint account. Similarly, if our joint account was empty and we wanted to order food one of us would cover it. While this is basically the opposite of sticking to a budget, it has worked for us. After opening up a joint checking account a joint credit card was the next logical step. This way, we could make big purchases together without worrying about how to split the cost. Even though I knew it made logical sense, I was definitely aware that opening a credit card together was a big step to take. I remember being pretty nervous about what might happen and I refused to be the primary name on the account! I guess I was worried about being in charge of a credit card that I didn't have complete control over.

Making a budget also helped us realized that if one of us spent a big chunk of change it would inevitably effect the other. So, it became less acceptable for one of us to make a big purchase without consulting the other. Do we always consult one another on things we buy impulsively? No. For example, I didn't need to get Neill's permission before I went on my recent shoe buying binge and Neill doesn't need my
permission before he buys accessories for his guitar.

So how do we know what we need to talk about? Since we don't usually keep a lot of extra cash in our checking accounts, a good rule of thumb is that we need to talk it over if we would have to take money out of our savings account or put it on a credit card to buy it. We try to frame the conversation like "I want this. How can we make this happen?" rather than seeking permission, but sometimes we just can’t
make it happen. For example, I’d love to get rid of our hand me down couch in the living room, but have you seen how much couches cost?!? We just aren’t willing to spend that kind of money on a new couch when our current one is still usable. Honestly, we tend to talk over most things we are planning to buy. Not because we necessarily have to, but because we talk and it comes up in conversation. But, I think if either one of us was constantly buying small things impulsively we would have to have a conversation and figure out some sort of system to manage it.

We've basically stuck to this system, with a few added tweaks, for the last three years. Our attention to finances as waxed and wane--some months making a big effort to keep our spending down and other months allowing our selves to put things on the credit card and worry about it later. However, after about 9 months of marriage we decided to make some big changes!

Have you ever made a budget? Where you able to stick to it? If so, what are your secrets? How much do you and your partner talk to one another about things that you buy? Do you keep a stash of money that you're allowed to spend however you want? How do you manage having a joint account or joint credit cards?

Alisha is a 20-something newlywed pursuing a doctoral degree in psychology and blogs at Married in Chicago.

Money and Marriage, Part 1 (Guest Post by Alisha)

Hi! I’m Alisha. I’m a 20-something newlywed pursuing a doctoral degree in psychology. When I'm not toiling away at schoolwork, I love going out to restaurants, taking on home design projects, practicing yoga, cuddling with my husband, and catching up on my favorite television shows. I'm a city girl at heart and my husband is a transplant from the mountains of West Virginia. Right now we live in a small condo in the heart of Chicago and love being in the middle of it all, but one day we'll move to our forever home with two floors, a yard, room for a dog, and . . . a girl can dream. I blog at Married in Chicago.

I’m a long time reader of Frugal Wife = Wealthy Life and so I’m absolutely thrilled to guest post here this week! I’m not very good at keeping an organized pantry or getting a month’s worth of cooking done in one day (although I really wish I was), but I can share with you the financial story of my marriage.

Sometimes, one of the hardest things to negotiate in a marriage is money. This can be a struggle in any relationship, but marriage adds the complex layer of fully joining finances (or not). And as it so happens, money is also one of those things that polite society just doesn't talk about. It can be tricky to talk finances
with family and friends and I've noticed that, at least in my own life, when it is discussed people tend to paint broad strokes and avoid sharing the nitty gritty details. Think about it, when was the last time you told your friends exactly how much money was in your retirement account?

This hesitancy to divulge makes total sense. The number in your checking account or on your credit card bill are personal. But for me, I think it also has to do with the nagging fear that my numbers don’t match up with what everyone else has. I get anxious just thinking that maybe everyone else on the planet is saving gajillions more dollars than me or that my credit card balance is exponentially larger than the
person’s next to me. Yikes!

With all of these feelings about what each number means and with the hush-hush money shroud of secrecy, it can be HARD to talk money with your significant other. Really hard.

No wonder people fight about it, right?

So, I thought I'd share with you the money history of my relationship with my husband, Neill. Am I little nervous to share so much information with you? Sure. But, if sharing my story helps just one person feel less alone, anxious, or concerned it is worth it. Plus, I think our society needs more open discussions
about the different ways people handle finances in a relationship.

My husband and I have been together now almost six years. But, I’m going to start at the beginning of our relationship so that you can see how our finances have changed over time. When Neill and I first started dating we were in very different points in our lives. He had already started his career, while I was a college student who worked during school breaks. He lived in his own apartment and was completely financially independent, while I lived in a dorm and was on a meal plan that my parents paid for. Many of these differences were because of our age difference. When we first met, he was 26 years old and I was only 19.

The first two years of our relationship we dated long distance. While only seeing each other every other weekend was difficult, I think living in different cities protected us from dealing with difficult money issues too early on in the relationship. For example, I don't think we talked about how much money we
had in our savings accounts, if we had credit card debt, or Neill's income. I knew Neill had a “good” job and Neill knew I basically had no job, but that was that. We each had a personal checking out and a personal savings account. I had some small mutual funds that were set up for me by my family and Neill had a retirement account started. Our finances were completely separate. When we saw each other, Neill usually paid for dinner or whatever we were doing. But, once in a while I would use the cash I had to pick up the tab.

A few weeks before I graduated college Neill officially became a homeowner and when I was finished with school I moved to Chicago, officially ending our long-distance status. We had some general discussions about what he was expecting financially from me, but the expectations were pretty low. We knew we wanted to live together and so we figured we would make it work somehow. At this point, Neill paid the mortgage and all of the bills. I, on the other hand, was an unemployed college student with my eye on graduate school. I wanted to find a paid position working on a research study, but I couldn't find anything. So in order to get the experience necessary to be accepted into a competitive clinical psychology doctoral program, I started working on a volunteer basis in two different research labs. Yup. You read that right. Volunteer. As in for free ninety-nine. As in Neill was pretty much completely supporting me, with a few hundred dollars from my mom every once in a while.

I am so thankful for Neill’s support because this arrangement let me build my CV and helped me get accepted to a clinical psychology program. But, living completely on Neill's dime brought up all sorts of uncomfortable feelings for me. For example, I remember when we would go grocery shopping I felt like I had to ask Neill's permission before I put anything in the cart. Plus, with taking on a mortgage Neill's monthly expenses went up. Even though Neill has always been extremely generous and never once made me feel like he differentiated between what was his versus what was ours, money was tight. I hated feeling like I didn't have any money of my own to spend however I want.

Thankfully, after six long months I finally found a job. I wasn't making much, but it was a full-time salaried job with benefits! Even though Neill still made about five times my salary, bringing home a paycheck made me feel good about being able to contribute to our household. It was during the first few months of my new job that we made our first household budget -- an excel document that I still have
saved to my desktop.

In my next post, I'll share how we made our budget and how we decided to open our first joint checking account. Until then, I'd love to continue this discussion in the comments. How did you and your partner handle finances in the early stage of the relationship? Have you ever been in the position of not earning an income or being the breadwinner? Is it easy for you to talk about money with family and friends?

Dave Ramsey Books, CDs, DVDs and Software on Sale for $10

This is a yearly $10 special Dave Ramsey runs.  I purchased a whole bunch of these as gifts last year.

Thought some of you might be interested!

Living On One Income (Merrick)

Since Janssen and I both recently became stay at home moms, and consequently went from a two income family to a one income family, we both decided to respond this week to Aleta's email about preparing to live on one income.

Janssen covered a lot of the important and basic things to think about before the switch to a one income family, so I want to talk about a few specific things that I have done to contribute to the finances now that I'm a stay at home mom.

In January of this year, I was laid off from my job, so we unexpectedly became a one-income family a few months before we planned to (I was already planning to quit when the baby was born). However, it wasn't too much of a concern because one of the years of our marriage I was in school and Philip was able to cover all our expenses with just his income, and now two years later he was making significant more money. However, our "extra" money (my income) that was all going straight to savings, was suddenly gone. So although I didn't need to financially contribute, I still wanted to. And as a stay at home mom, so can you.

Here are a few things that I do to contribute to the family finances:

1. Babysit my neighbor's little girl four days a week
2. Make homemade shirts, headbands, and other crafts to sell
3. Sell commissioned drawings and paintings
4. Teach children's art lessons out of my home once a week

Now, each of these are pretty small things that don't really bring in a ton of money. But all of them combined add up and contribute a significant amount to our finances each month. So although I don't need to do these, it gives me something to do, gives us more of a financial cushion, and adds a tiny bit to our savings account each month.

And all the while I can stay home with my baby and feel good about that.