Do people have any kind of control over whom they fall in love with? Perhaps Cupid’s arrow strikes randomly, and there is no choice but to obey the heart — or chemicals in the brain — or sexual urges. But once that initial response has subsided, if you and your partner are headed for a life-long or major long-term relationship, there should be some discussion about money.

What role does that discussion have in determining the path of your relationship?

A recent study explains that opposites don’t attract in relationships. If you’ve ever looked at relationships where each member of the couple is on a different side of a money-related philosophy, you’ve probably suspected this to be the case. A habitual spender in debt and a frugal saver could have a relationship full of conflict; or, if to avoid conflict money is never part of a conversation, the financial damage could be worse in the future.

Avoidance of tough discussions about money, deliberately hiding financial problems, and outright lying about a financial situation could be more damaging than the financial problems alone. When everything is out in the open, and the couple is fully aware of their individual finances, would a difference in philosophy be enough to curtain the relationship before it progressed to a more serious state?

Ginger, who wrote a guest article for Consumerism Commentary, argued that smart women should marry for money. Although the article was misunderstood by many readers, she was not saying that women should marry for quantity of money, but for their approach to money. A smart, independent woman shouldn’t need to take care of a husband as if she were his mother. The same may be true for men, though traditional sex roles tend to make the man-supporting-woman paradigm more acceptable.

There is more that goes into a successful relationship that being financially compatible. Differences in religion, social issues, values, and goals are important to address. This is a financial website, though, and readers are generally focused on their thoughts surrounding money. In planning to move a relationship forward, how important is a compatible philosophy of money when compared to other matters that define compatibility? Would you be willing to accept a difference in opinion about a divisive political issue before you accept someone who doesn’t share the same financial values? Or do you feel that you might be able to sway your partner’s approach to money more easily than changing other philosophical differences?

I’m interested in hearing opinions from every reader. What was or should be the role of money in choosing a relationship? Leave your comments below.

Photo: Dragunsk
Wired

The original version of this article, The Role of Money in Choosing a Relationship, is copyrighted by Consumerism Commentary.

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For almost as long as I’ve been living without a human roommate, I’ve enjoyed the company of my cat, Rupert. I adopted Rupert from my friend who determined his newborn daughter was allergic to cats. He had already owned Rupert for a long time, and I knew I’d be the cat’s new owner for the second half of his life.

Rupert was fifteen or sixteen years old when I brought him to the veterinarian to have him put to sleep this weekend. His quality of life had been worsening over the last year, though trips to the vet didn’t indicate why he was unhappy or having health problems, nor could the vet offer any suggestions to help. His suffering seemed to increase in the past weeks, and I had to make the difficult decision.

For most of my years with Rupert, I commuted to my place of work every weekday, and I knew that he would be waiting for me when I returned home. In recent months, as I’ve been working from home, Rupert kept me company when he wasn’t sleeping during the day. There were times he was a pest, but overall, he was a very sweet cat who was always happy to provide companionship. I may find a new cat sometime in the future, but not until I can settle other aspects of my life.

Here are some articles from around the web that piqued my interest lately.

Are discount grocery stores worth the savings? The overall question is whether it’s always better to buy the least expensive option. Unless you need to budget down to the penny to avoid going into debt in the short-term, a long-term view of paying the best price for the most acceptable level of quality makes more sense.

How to find unlisted jobs and win every salary negotiation. Ramit Sethi offers advice on these issues millions of unemployed people are facing in today’s job market. The tips boil down to effective networking with potential colleagues and going above and beyond what’s required to show that you’re not just another candidate in a large sea of potential employees.

JT McGee offers 12 personality types of passive investors, modeled after Carl Jung’s work on personality types, as well as after David Keirsey’s combination of Jung’s work with theories of temperament dating back to classical Greece. The types suggested by JT aren’t necessarily related to the psychology of the investor, but they do help to categorize the various ways an investor can take a hands-off approach to investing.

Always be the underdog to get ahead. Financial Samurai offers advice: don’t make too big a deal over yourself, and you can take your goals — or, I suppose, your enemies — by surprise.

Suze Orman’s Prepaid Debit Card: A Lesser of the Evil Prepaid Options. In this article for GoBankingRates, I look at the Approved Card, marketed by financial guru Suze Orman, as a product on its own. It’s not the best option for its intended audience, but it certainly isn’t the worst, either. Suze received backlash because as a personal finance expert she should “know better.” Here’s my original evaluation.

The original version of this article, The Lonesome, Pet-Free Life, is copyrighted by Consumerism Commentary.

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This is a guest article by Aloysa, a creator of My Broken Coin. In this article, Aloysa offers five conversation starters for couples considering moving in together.

Based on my own personal experience I can tell you that expectations of your significant other change as soon as you move in together. All of a sudden, you expect him to make the bed, walk your dog, wash the dishes, and put the toilet seat down. He wants you to cook him breakfast and dinner, pack his lunch, buy a six-pack on the way home from work, and listen to his rants about his favorite football team.

But what about your financial expectations of each other? How often do you discuss them?

I strongly believe that when people decide to move in together, they should know as much as possible about each other finances: bank account balances, when the car will be paid off, how much money you both earn, what monthly bills you have to pay including alimony and/or child support.

If you don’t know that much, you really don’t know anything about each other and should stop reading here.

Conversation #5: What are you waiting for? Pay it already!

What is your bill paying style? This is something that can be very important in your life together. Let’s say you pay bills in advance, but your significant other waits till the last minute. Potentially it can create a problem for both of you. One gets nervous that a bill is not paid yet, while the other is stress-free till the “payment due” date.

Resolution: sit down together, go over your bills and figure out what needs to be paid. Make a spreadsheet or a schedule with the due dates for payments, decide when the bills are expected to be paid, and, most importantly, don’t forget to stick to that schedule!

Conversation #4: Who is paying for that dinner?

The complaint that I often hear from my cohabitating friends is related to a very trivial but tricky question: who should pay for nights out, especially if expenses are split 50/50?

Most of the time my romantic girlfriends expect that dates will be covered 100% by their partners. Some of my pragmatic guy friends assume that if they are splitting everything else 50/50, date nights should also be split the same way. Unfulfilled expectations could cause tension in the relationship, and feelings can get hurt.

Resolution: Nothing can kill romance in the relationship faster than resentment caused by money issues. You have to decide together what is expected of each other when you go out. If you expect a romantic dinner that he covers, tell him about it. If you want her to pick up her portion of a tab, talk about it.

Conversation #3: You owe how much?!

Your relationship should be open and honest. There should not be any hidden surprises such as your credit card debt, taxes you owe to the IRS, or student loan balances.

One of my friends was shocked when she found out by pure accident that her boyfriend, with whom she was living for about a year, owed $70,000 in credit card debt. When she confronted him about it, his response was, “It is my debt. Don’t worry about it.” His debt became hers when they started looking for a house together and could not qualify for a house they wanted because of his credit card debt.

Resolution: Pull a free credit report for each other, and be open about your debts. I know that not everyone would agree with this idea, but if one day you decide to get married, have kids, and buy a house, you will be glad you did it.

Editor’s note: There’s a related discussion that’s worth mentioning, as well. Before you begin cohabitation, it may be a good idea to discuss whether you and your significant other should be considering combining financial accounts now, later, or never. Depending on the state where you live, there may be statutes that define how individual property may become common property regardless of whether you combine your accounts, but it’s a discussion that should also come sooner or later.

Conversation #2: I need some cash! Please?

Both of you are individuals with different interests, life views, expectations, different bank accounts and different bills. Bills change over time. Your bank account can get overdraft fees. Or you simply spent more than you expected.

One of my friends came back from work to find out that the water was turned off in the house because her live-in boyfriend did not have the money to pay the water bill. He did not dare to ask her for help, and they ended up with no water for a few days.

Resolution: It can be difficult at first but it gets easier every time you do it. Ask for help if you need it. The worst that can happen is you will have to explain why you are short on cash. The best thing that can happen, you will have an uninterrupted supply of water!

Conversation #1: What are we looking for?

I have a few friends who have lived with their boyfriends and girlfriends for three, four, five years and they now feel the drive to make their relationship legal has flown the coop. Before you decide to share your lives and your bills, it is always a good idea to discuss how both of you see the future.

Do you know what his or her timeline is for marriage? Do you even want and plan to get married? If you don’t discuss it early on, she might start thinking that he is with her because it is convenient and cheap. He might think that she is using him as a stepping stone until someone better comes along.

Resolution: Just because you are moving in together, don’t assume that you both have the same intentions and share the same goals. Relationships tend to stall and drift. Natural progression stops, and you are left guessing what the future life holds for the both of you.

Talk long and hard before you make your final decision to move-in, ask questions and please, never assume anything.

What discussions do you expect to have or have had prior to moving into the same living space as your significant other?

Photo: gareth1953

The original version of this article, Five Conversations Before Moving In Together, is copyrighted by Consumerism Commentary.

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Money and things have never been important to me. Do you agree or disagree with this statement? (That is, assuming the statement is about you, the reader, not me, Flexo.)

If you do agree with this statement, according to a new study released by Brigham Young University and William Paterson University, you would be more likely to score highly in measurements of emotional maturity and responsiveness to partners. In other words, less materialistic people are happier in their marriages.

According to the study, researchers tend to believe that stress in relationships is a result of each partner having a different attitude toward money. Perhaps one side of the relationship is more materialistic than the other side, and this divergence of attitudes would create tension in the relationship. This study, which surveyed 1,734 married couples, shows that even when everyone within the relationship has the same attitude towards money — an attitude that emphasizes the importance of money and things — there is a correlation to a lower level of marital happiness or satisfaction.

These results can be applied to couples. For a better chance of happiness in a relationship, let go of the focus on money, particularly the idea that the purpose of money is to accumulate objects that reflect a status of some sort.

The study further concluded that even if one member of the couple lived by a philosophy not based on the accumulation of material objects, the relationship is better off from a satisfaction standpoint. Even if the philosophies differ and the couple would be expected to live in conflict over the philosophical divergence, having just one member willing to look beyond materialism correlates to more marital bliss.

Regardless of level of income, the correlation continues. Couples struggling to make ends meet and couples with financial security are both affected similarly by the state of materialistic attitudes in the relationship. The study also shows that materialistic couples tend to be better off financially. The philosophy may pay off from a strictly financial standpoint; then again, divorces can be costly and could negate any financial advantage gained by approaching life with a focus on buying more stuff.

Materialism, as measured by this survey, is linked to ineffective communication with the significant other, increased negative conflict, and decreased satisfaction and stability in the relationship. This isn’t necessarily a cause-and-effect relationship. The study doesn’t show that materialism causes problems in a relationship, but there is a correlation. There could be an outside variable that induces one to be more materialistic and induces one to tend towards negative conflict.

Is the financial advantage of being overly concerned about money and things worth the risk of being less satisfied in a marriage?

Photo: seanmcgrath
Journal of Couple & Relationship Therapy via TIME

The original version of this article, Materialistic People Less Happy in Marriages But Have More Money, is copyrighted by Consumerism Commentary.

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About the author: Margaret is a recent college graduate who, with her boyfriend, plans to save up money to get married, pay off student loan debt and head to seminary.

Money is one of those things you’re not supposed to mention in polite conversation. But if you’re married or in a serious relationship, you have to talk about it.

My boyfriend is the spender; I’m the saver. He’s never had any guidance on how to manage money; my dad had me putting money in a savings account while I was still in the cradle. Coming from such different angles meant that starting the conversation about money wasn’t easy.

But it doesn’t have to be something you dread if you follow a few simple principles. Most importantly, pay attention to how your significant other views money, because that will help you learn how to best communicate what you’re thinking and feeling.

Start out slowly.

It would have done little to no good if I had immediately emphasized IRAs and CDs and how much money he can make in twenty years if he starts saving now. I started simply and slowly, not because he’s dumb, but because changing your views on money eventually transforms your entire life, and that kind of thing doesn’t happen overnight. I began the conversation by suggesting that he get on a budget. He was very positive toward this, so we sat down together and wrote up a plan. I also helped him set up an online high-interest savings account so that he could start building an emergency fund.

That said, it wasn’t all flowers and butterflies at the beginning. I helped him come up with a budget and gave him tools to track it, only to find out several months later that he hadn’t been tracking his spending at all, and often he had no idea how much money he had left in his checking account. At this point, I had to go back to square one. We revisited the budget and talked about why he hadn’t been able to keep track of his spending. I offered to keep track for him, if he would just give me his receipts.

It turned out that he really wanted to keep to the budget, but he got tired of keeping his receipts. I suggested he use his debit card for all his purchases so that he wouldn’t have to keep his receipts. That didn’t solve the problem completely — he still has trouble sticking to his budget sometimes — but by talking about it and being creative with solutions, we made the transition just a little bit easier.

One of the things I learned as a psychology minor is that it is more effective for you to come to a realization on your own rather than having someone try to persuade you. If your partner has outrageous spending habits, saying, “You should stop buying so many clothes” will not be welcomed. Choose instead to say, “Have you ever thought about keeping a budget? I’ve found it really helps me stay in control of my money.”

Even if they don’t stick to the budget the first few months, just tracking their spending will open their eyes to where their money is going. And that may lead them to address on their own their tendency to buy more clothes than they can afford.

Be patient and realistic in your expectations.

If you’re anything like me, it took you more than a few days to come to your current understanding of how to make wise decisions with money. Don’t expect your significant other to come to that point any more quickly. In fact, don’t expect them to ever feel exactly the same way you do about money. I’ve accepted the fact that my boyfriend will never, ever enjoy tracking every penny he spends, but that he can learn how the choices he makes today with money will impact his future. And so I focus on sharing personal stories I’ve read on blogs about how other people manage their money. This has actually made him more interested in personal finance, such that we listen to a podcast on personal finance together every week!

Don’t talk about money all the time.

If your finances are in trouble, then the last thing you need is for your talking about it to make it seem like money is the third member of your relationship. When my boyfriend told me that it sounded like I was getting a little obsessed with money, I knew it was time to step back. Now we pick a night each month to go out to eat and talk about his budget. Because I’m doing my best to avoid talking about money when we’re just hanging out, he actually looks forward talking about his budget once a month.

Only talk about money when you’re calm and composed.

If you just found out that your girlfriend maxed out her credit card, don’t start dialing her number. Wait. Money is a stressful enough topic on its own; add your own anxiety to the mix, and you won’t get very far. Of course, it’s most effective to talk about money before the stressful situations occur, but if you’re already in the thick of it, make sure you’re able to discuss any problems without being defensive or making broad generalizations. It’s amazing how quickly you can diffuse money-related tension by maintaining a calm presence of mind.

Stay in control of your own finances.

You are the best model for your significant other. If you’re telling him to save, save, save, but you consistently spend hundreds of dollars on clothes, then it will be hard for him to take you seriously. Even if you’re married and have joint finances, you can still manage your money in way that will keep you from being a hypocrite and also provide a very personal example of wise habits for your spouse.

By maintaining control of your finances, you say more about your philosophy with your actions that with your words.

See money as a means to an end.

You may be perfectly happy never going out to eat or buying new clothes, but that might not be the case for your significant other. Instead of letting it come between you, use money as a way to bring you closer together. Set a savings goal for a fun trip. When I helped my boyfriend make his budget, I made sure there was at least a small amount of what he calls his “fun money,” which he can spend anyway he wants. We also really enjoy cooking meals together, so we make sure we have a little extra money in the food budget for more exotic ingredients.

Earning and saving money is not a goal by itself. The power of money is not a big bank account, it’s what options you have with a big bank account. Money exists to be used rather than collected.

Choose your battles.

My boyfriend was fairly receptive to my suggestions, but you might be faced with a partner who isn’t so keen on making any changes with their finances. A few days ago, my boyfriend had about $40 left for food and eating out in his budget. He needed to buy groceries for the next week and have some money for food when traveling for Thanksgiving. I told him I wasn’t sure if he should go out to eat for lunch at work one day, but he went anyway and spent about $9. I was so tempted to get angry, but instead, I let it go. It wasn’t worth $9 for me to nag him and him to feel like I was completely oppressing him financially. That way, when a situation comes up where his choice about money really is important, he’ll know that I’m not just a Scrooge trying to take away all of his fun.

If all else fails, bring in a third party.

You can’t wait until your husband has hit rock bottom to address your finances. If your significant other feels like you’re nagging or doesn’t think that any of your ideas are appropriate or helpful, then bring another person into the equation who can speak into the situation. My boyfriend started talking to an older friend of his about money, and his talks with that man have done much more than many of my attempts. Seek out someone who your partner respects and ask them if they’d be willing to sit down and talk with you.

And encouragement is just around the corner. Just last week, my boyfriend was faced with car trouble. In the past, his parents had to loan him money to help him fix things like that. The cost for the repairs was almost $800, but he had been faithfully putting money in an emergency fund, and he had just enough money to pay for the expenses. He was so excited to tell his parents he wouldn’t need to use their money, and for the first time, I saw him taking pride in his control over his finances. All the pestering and obsessing I could have done would never have made him feel that way.

Above all, realize that change takes time. Celebrate staying within the budget, paying off credit card debt and finding more frugal ways to do things. Money has the power both to build up and to tear down, but by talking about money together in a positive way, you and your partner can stay in control of your relationship instead of letting money control you.

Photos: reebs*, crschmidt, gustavobando, Sabrina Campagna

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I don’t have children; perhaps I will at some point, but I don’t see kids in my immediate future. It’s not due to the cost of raising children, though for many years, I believed I wasn’t in a financial position to provide all that I would want to provide to a child growing up.

A few weeks ago, this comic from xkcd was making the rounds among my friends on social media websites. The comic increased the level of smugness among single men, single women, and dual-income-no-kids couples, while tacitly angering those who have chosen to bring miniature humans into the world, particularly those who have realized the implied truth of the comic — the smaller bank accounts and lighter wallets.

I never understood the appeal of those family window decals in the first place. They deserve the same derision as those “My kid is an honor student” bumper stickers. It’s great to have pride in accomplishments, but there is no need to announce successes to strangers who haven’t asked about the academic performance of your family. I don’t think there’s a need to share reproductive accomplishments, either, as those family decals seem to do. Perhaps this is my bias as a non-parent; would my opinions change after I have kids?

The above comic illustrates that the typical couple trades in significant wealth for the blessing of children. To generalize, happy and well-adjusted parents might say you can’t put a price on the positive experience of nurturing a family, while a couple sans enfants par choix might laugh all the way to the bank, directing the hundreds of thousands of dollars saved per each non-existent young adult towards retirement, fun, business opportunities, and charity.

According to a cost calculator from BabyCenter, a family earning over $100,000 in an urban area in the northeast United States could expect to pay $500,000 for rearing a child through college, including tuition for a public college. Choose a private college and the cost increases to $530,000. Alternatively, a family could reduce this cost by requiring children to pay their own way through college.

In an article I wrote last year for U.S. News and Yahoo Finance, I suggested people could save money by, among other things, choosing not having children. This engendered a a vitriolic response from parents offended by the implication children — their children, specifically — were nothing more than a waste of money. For those who have not had children, though, continuing to not have children is a legitimate choice. Most decisions in life are temporary, but once you have children, you cannot un-have them. This permanence, while a beautiful life-affirming experience, is expensive, and if having children by choice, families should consider the financial consequences.

The idea of having children is one of those special conversations where the decision isn’t always about the bottom line. Finances must always play a role, but the choice isn’t always logical in nature. How strong a role should finances play in the decision to have children? And if finances pay a strong role, does it follow that low-income or poor families shouldn’t procreate?

The original version of this article, Save Money By Not Having Children, is copyrighted by Consumerism Commentary.

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At the right age, involving children in the household financial planning process can be a good way to teach responsible money management. Children internalize best practices when they not only receive meaningful instruction, but have visible, positive role models as parents. If parents want to impart a lesson of “buy only what you can afford,” but the intended audience sees the parents struggling with debt, buying items obviously in excess of needs, the lesson won’t get through.

Involvement and modeling are the keys to passing on good financial lessons to the next generation (not financial management classes in school, which have been shown to do more harm than good). In a discussion about allowance for kids, Consumerism Commentary reader Kilae offered the following suggestion:

Another system I read about was a couple that gave their child 10% of their household income. While it sounds ludicrous, with that 10% the child had to pay an itemized bill that was 10% of the household bills: a 10% share of the mortgage, a 10% share of the utilities, a 10% share of the grocery bill, a 10% of the long-term savings and college savings, and so on. When all was said and done, the kid had around $15 left per month as play money — not a ludicrous amount, and it showed the child exactly what the parents’ money was being used on and why budgets were important.

While there is something to be said for shielding children from the stresses of household financial management so they can concentrate on their educational priorities, this system could be very effective. With an active role in the family’s finances, a preteen or teenager can build valuable experiences that will translate directly to how he will manage finances when his responsibilities include a household of his own.

There’s a possible social drawback. Parents should try to ensure that children do not take these lessons as admonition of a family that does not, at least outwardly, appear to manage finances with the same skill and dedication. A judgmental attitude or a feeling of financial superiority are potential effects of an intense focus on effective money management. While financial lessons are important, I prioritize teaching children not to be judgmental, particularly based on appearances.

Is requiring involvement and shared responsibility a good way to teach financial lessons to children?

Photo: stevendepolo

The original version of this article, Involving Children in Household Money Management, is copyrighted by Consumerism Commentary.

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Do you lie to your spouse or significant other about money?

Money may be one of the most popular issues causing strife in a relationship, but deeper issues are usually communication and values. Lying about money is one way to ensure that a relationship will fail over time, but for most people, small, occasional lies do little harm and help to ensure a smooth coexistence. According to a 2010 survey, 80% of married people keep some secrets from their partners about money.

When it comes to frivolous spending, many people don’t want to tell their partner out of embarrassment or because they know that it might start an argument due to a clash of values. 24% of husbands and 43% of wives lie about spending on clothing and accessories, 19% of men and 8% of women lie about spending on alcohol, and 12% of men and 21% of women lie about spending on gifts.

If a couple doesn’t agree on some ground rules, selfish spending can become an issue when it is inevitably discovered. Different couples have different approaches to managing household income and expenses.
When relationships decide to combine finances — or to keep finances separate — setting some ground rules can help.

In some states, marriage automatically combines finances from a legal standpoint. While a couple could decide to keep their finances separate, according to the law, all involved money, assets, and debt is owned and owed equally by each partner. The decision has been made for you in terms of the law, but you could still choose to operate finances separately for practical reasons.

If a couple decides to keep finances separate, implicit in this decision is for each partner to allow the other to make decisions with their own money, even if it affects the other partner. Perhaps one ground rule is necessary: keep your partner informed of anything that might affect the other. For couples who agree to keep finances separate, trust inherent must be strong.

For couples who decide to combine finances, the ground rules will be more involved.

1. In two-income households, each partner should contribute to shared expenses fairly. To contribute “fairly” can have different interpretations, so couples should decide what that means. For couples with roughly equal income, it could be fair for each partner to contribute exactly half of the rent or mortgage payment to this particular bill. It could be fair for each to dedicate half of the cable bill and other utility bills.

For a couple with widely divergent incomes, it might make more sense for each partner to contribute a percentage of his or her income to each expense, so the bills are paid according to the ratio of one person’s income to the other. If one partner earns $150,000 per year and the other earns $30,000 per year, should they both need to contribute $1,000 a month to the mortgage payment? It might make more sense if the partner earning more contributes $1,667 and the lower-income partner contributes $333 per month.

2. Each partner should contribute to shared savings. According to his or her ability, some remaining income should be saved in a high-yield online savings account. Whether each partner contributes the same amount or the same percentage of his or her income, both partners should agree on the importance of saving money for future flexibility and financial independence as well as saving for emergencies.

3. Have a debt repayment policy. More often than not, one person enters a relationship with more debt than the other. Decide whether paying off pre-relationship debt is a responsibility of the entire couple or just the individual who brought it in, and debt repayment should be a prioritized goal. Any debt accrued since the combination of finances should be considered joined debt, in line with the ownership of all finances. Debt payment, like all expenses, could be divided equally or by the best of his or her ability to pay back based on income.

4. Do you need a prenuptial agreement? This is something a couple should decide before getting married. There is a stigma with these agreements, and they shouldn’t be used for one partner to establish financial control over the other. Many people would simply be offended if their partner asked them to sign such an agreement, but for a business owner, prenuptial agreements can protect the business and shareholders would expect the owner to take all precautions to do so. If one person wants to sign an agreement and the other does not, there could be a barrier of trust on both sides of the relationship.

5. Set up a Fun Fund and don’t ask questions. If income and cash flow allow for it, even a couple who combines finances could benefit from each partner keeping small, private savings accounts. These can be used for spending on some items that the other partner might judge as frivolous, like hobbies or clothing. It’s also a great opportunity for spending on gifts for the other, as spending from a private account is the only way to surprise your partner. The Fun Fund should be a place where you can have the freedom to spend as you see fit without affecting the finances of the relationship.

Of course, the ability to keep a private fund relies on the strength of the relationship. Each partner must be able to trust the other. If you feel your partner may be cheating on you, it may be difficult to allow even a portion of spending to be undisclosed.

6. Stick to a budget. For a single person, a budget can be simple to follow. Expenses are relatively well-defined, and income can be, too, in most jobs and career paths. Adding a new person to the mix, as is the case when a couple combines finances, is adding another variable. A flexible budget can help a couple feel free to spend on what they want after the needs are covered, and in tight situations, can allow couples to borrow from themselves to cover the necessities. A couple who combines finances should agree to stick to the plan.

7. No lying about finances that affect the relationship. The Fun Fund allows for expenses that don’t fit into the couple’s financial plan. That should alleviate the necessity for the small lies that happen when one partner doesn’t want to admit to a financial decision for fear of disappointing the other partner or starting an argument. Keeping the Fun Fund relatively small means that spending in this fund shouldn’t affect the overall relationship and should prevent one partner from single-handedly making a decision that causes trouble. Still, with both partners having access to the couple’s money, there’s an opportunity for lying. By setting a ground rule to avoid this practice, couples would discuss the important spending decisions in advance and learn how to agree on the important financial values, like saving for retirement, paying for a child’s education, or supporting an elder relative.

What other ground rules do you or would you set with your partner?

Money Magazine

The original version of this article, Setting Money Ground Rules With Your Partner, is copyrighted by Consumerism Commentary.

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Sallie Mae and Ipsos Public Affairs, a research company, shared some good news for college students and their families. In the latest research results, gleaned from a representative sample of 1,600 undergraduates and their families, the total amount paid for a year in college has decreased. With tuition costs increasing every year faster than the official rate of inflation, this is good news. Despite cost increases, more students are taking advantage of grants and scholarships to help pay for higher education.

From the 2009-2010 to the 2010-2011 academic year, families who received grants and scholarships increased from 55 percent to 67 percent. Overall, the cost decrease can be attributed to students and families choosing lower-cost schools to save money amid the recession, living at home rather than on campus, and reducing the academic schedule to part time.

The study also showed that families are looking more at the practical reasons for attending college rather than idealistic reasons. A larger percentage of students and families believe that earning a bachelor’s degree and receiving a college education is necessary for their intended occupation and for increasing income potential throughout their lives.

Digging deeper into the data, it’s interesting that most of the positive changes from one year to the next occurred for middle-income and higher-income earners. While the cost of college for families earning over $35,000 decreased, and this decrease was even more substantial for families with household incomes over $100,000, low-income earners saw the overall price paid for a year at school increase.

On the other hand, a glance at a chart shows that academic year 2009-2010 may have been the surprise rather than the most recent year. The cost of college was higher in that previous year than would be expected following the trend through from 2007-2008 to 2010-2011.

While access to grants and scholarships increased for families above the $35,000 annual income mark, these opportunities for low-income families stayed flat in terms of funding source. Low-income families have also increased as a percentage of the overall population of college students, and that is reflected in the most recent sample.

Here are some additional data points I found interesting from the study.

• Overall, more college-bound families are using the FAFSA to qualify for federal student aid, up to 80 percent in 2011 from 72 percent in 2010.
• Cost is still a significant factor when students and their families choose a college, with 64 percent of families eliminating colleges by the time in the application and acceptance process that the financial aid details are revealed. Fewer families eliminated a college based on cost earlier in the process, before researching schools, which seems to mean more families held out hope that financial aid would be bountiful.
• More than any time in the last four years of the study, students are willing to stretch financially for a good education (60 percent). Only 51 percent of parents were willing to stretch, though, own significantly from 64 percent.
• Ninety percent of students see college as an investment in their future, the highest percentage in the last four years.
• Down one point from last year, thirty percent of students want the experience of a college of education regardless of the potential of future earnings. Parents’ attitudes about the experience dropped nine points to twenty-four percent.

Whether a college degree is worthwhile will always be a hotly contested issue, particularly for career paths where the differential in income between high school graduates and college graduates is not stark. When families suffer economic hardships, or even when the general economic milieu is tending towards financial concern or volatility, family finances come into focus. Financial return on investment, at least for middle-income and high-income families, becomes a priority. While a college education is not the best idea for every high school graduate, I still would not discourage a student from enrolling in college and giving higher education a concerted effort.

Photo: NazarethCollege
Sallie Mae/Ipsos

The original version of this article, Low Income Families Paid More for College While Everyone Else Paid Less, is copyrighted by Consumerism Commentary.

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While growing up, my brother and I both benefited from experiences at summer camp, both day camps and sleep-away camps, at various points in our childhood. My memories from summer camp have stayed with me, and the experiences have shaped who I am. I first heard Pink Floyd at summer camp, from a counselor playing Wish You Were Here on guitar for the campers around a campfire. I received my first lessons with darkroom photography at camp. I learned how to be a radio DJ at the same camp radio station, as I later discovered, that Bruce Warren, the program director of Philadelphia’s WXPN radio station, got his start in the business. At camp, I (barely) learned how to swim. My first real kiss was at summer camp.

Most importantly, my time at summer camp provided me experience living away from my parents, moving my outside of my comfort zone at an early age. This probably developed into my sense of independence, my comfort with making my own schedule — while there was structure within the camp, I chose my own schedule and appreciated the flexibility — and my wide variety of interests.

These experiences all came at a cost — to my parents. I am not sure what my parents paid to send me and my brother away for eight weeks during the summer, but I know it was not cheap. The camp experience is even more expensive now, more than two decades later. According to a recent article in the New York Times, it’s not uncommon for these summer sessions to exceed $9,000. Participation is dwindling, as parents have more options for their children. Costs for running camps are increasing, and so is the fear of legal action in a society that grows more litigious.

The trend seems to be moving away from the long, all-encompassing camps. Rather than doing everything, new camps are focused on one activity and provide an intensive experience over a shorter time frame, like a week or a long weekend. These camps are challenging the traditional method of attending a camp where several activities are part of the experience over a four or eight week period. More and more, parents want to see results when they spend money — and the results they like to see involve skills that would be impressive on a résumé.

Kids who remain mentally active over the summer perform better at school, so there’s definitely an incentive for keeping students involved in activities during the off-season rather than leaving them in front of the television. Summer camp is worthwhile, but the question is how much to spend. Some camps have reduced rates based on financial need, but even non-profit camps with financial assistance have rates that can turn away many interested families.

Do you or would you send your children to summer camp, either day cam or sleep-away? Do you have any similar experiences?

New York Times

The original version of this article, The Cost of Summer Camp, is copyrighted by Consumerism Commentary.

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Prenuptial agreements are on the rise, as more individuals are concerned about losing their assets in the wake of the recession. Prenups, when handled correctly, can protect an individual’s assets in the increasingly likely event of divorce. Without a prenup explicitly defining how assets should be divvied up, if a divorce occurs, any income earned during the marriage, including any money added to retirement accounts, could be split between the two individuals. Depending on the state, this split could be 50% to each or it could be some other method considered fair by the courts.

Regular earned income isn’t the only type of wealth that could be affected. Any increase of the value of an asset, whether stock investments or a business, that occurred during the marriage could be considered marital property and divided by a court. For example, even if one spouse purchased a house before marriage, the increase in the value of the house during the marriage will likely be distributed partially to the spouse who doesn’t own the house. A business that’s started years before the marriage but thrives during the marriage, even if the non-owner spouse is not involved with the business, could be split in the event of a divorce.

For someone who has worked hard his or her entire life to build a solid financial future, a divorce is one of the most financially devastating events one can endure. We buy insurance to protect ourselves against loss of health, we diversify investments and choose an appropriate asset allocation to help shield us from financial downturns. A prenup is just another way of protecting assets.

Although we don’t feel edgy about discussing insurance with someone we plan to spend the rest of our lives with, prenups are one of the most taboo topics within the broader taboo topic of money. No one wants to seem greedy. The point of marriage is to make two lives one, not to continue living two independent lives within the same household. A prenup would indicate that divorce is an option down the road, and many couples would not be interested in facing that possibility at a time, before marriage, when the only thought should be living a happy life together.

Classically, couples who opt for prenups usually have one or two individuals who fall into these descriptions:

• Wealthy, either by inheritance or by effort. When one individual has a much higher level of wealth than the other, the wealthier spouse often wants to protect his or her money in the event of a divorce.
• Unequal income. Like an unequal net worth, unequal income or income potential can tilt the balance of power within a marriage. A prenup can either protect the balance or protect the tilt.
• A business owner. For someone who owns a business, a divorce could mean the end of that business. Selling the business is an option for liquidating enough cash to pay for the expenses of breaking up a marriage. If the business is location-based and the owner prefers to move, this, too, could have a devastating affect on the business.

State laws govern prenuptial agreements, and each state falls into one of two categories. In 41 states, divorce without a prenuptial agreement falls under equitable distribution, where the court considers the individual case, circumstances, and finances to determine the most fair division of assets. In the remaining nine states, courts divide all marital property. Prenups can override these state defaults.

Prenuptial agreements are often in the news when celebrity couples move towards marriage. Most recently, Kim Kardashian, who earns about $12 million a year according to Forbes and has a home in Beverly Hills, has signed a prenup with fiancé Kris Humphries, who earns only $3.2 million a year. Kim will be protected through the prenup; in the event of a divorce, she will keep everything she owns now in addition to any income she earns during the marriage.

For engaged couples whose wealth and income are already evenly split, there is still a case for a prenuptial agreement. The court system can be complicated and expensive. A couple that doesn’t discuss financial issues could have a harder time during a divorce. A prenup can smooth some of these difficulties and help both partners leave the marriage with most of their own wealth intact. While prenups have traditionally been instruments of the wealthy, the recession has affected many people’s approach to protecting their assets. More middle-class couples are considering prenups now.

Would you or did you consider a prenuptial agreement before getting married?

Photo: david_shankbone

The original version of this article, Should Couples Get a Prenup?, is copyrighted by Consumerism Commentary.

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I always encourage parents to find interesting ways to teach their children about responsible money management. When I do, I always lean toward behavior modeling. Children who, even at an early age, see their parents engaging in a positive relationship with money will subconsciously take what they observe to heart more than any explicit lessons they attempt to impart. Teaching financial literacy in schools is mostly a lost cause, as teachers aren’t trained for it, there isn’t enough room in the curriculum, and as Ramit pointed out, most students just won’t care enough about the subject for the lessons to have an effect. The responsibilities for teaching these lessons remains with the parents, and with many parents failing with their own money management, a good solution is almost impossible to design.

Using money as a motivational tool for children is dangerous, yet it’s common for parents to reward their children for bringing home good grades on the report card. Policies range anywhere from incentives only for As to a staggered system of rewards for any passing grade, with As receiving the highest monetary prize. These types of reward system broadcasts a few messages:

• Results are what matter, regardless of effort or method of achieving those results.
• Good results are rewarded with money.
• In the case of the tiered system, mediocre results are rewarded, as well.
• Money is the best type of reward, and success and effort are only worthwhile if a monetary reward is available.

I don’t see how any of these messages reinforce a positive relationship with money.

Results are what matter, regardless of effort or method of achieving those results. Children will link good grades with money. While most students achieve good grades by studying, working hard, paying attention in class, perfecting homework, and performing well on tests, a select frustrated few might take some shortcuts. Cheating is one way to get good grades, at least until the cheater gets caught. On the other hand, for a child who excels “naturally” in a class, they might achieve an A without any effort. In this case, the student could believe they will be ale to sail through life without developing the skills that will be necessary for their success in other tasks. Results matter, but so do attitudes and values.

Good results are rewarded with money. I often hear parents say that they wish to pay students for the work they do because this is how the real world works. I have two issues with this as it pertains to grades. First of all, students will come to expect to receive money when they perform well. Anyone who has worked in an office where people receive a pay increase just for being there or where people receive promotions based on their coziness with the boss rather than performance can attest to financial rewards are not necessarily linked to good results in the “real world.” THe distribution of money is often unfair.

Mediocre results are rewarded. Any monetary reward is enough to associate money with grades, and if there isn’t much perceived difference between the rewards for receiving grades of C, B, and A, then the children subject to this system will aim for the lowest rewarded score.

Money is the best type of reward, and success and effort are only worthwhile if a monetary reward is available. The world needs people who are solely motivated by money. I don’t think this is a complete loss unless every child decides to seek a path that they believe will lead them to the most money throughout their lifetime. This is the result of an increased focus on giving only money to children as rewards. Education and performance should be its own reward. If children see parents who value the lessons taught by schools and if parents reinforce the teachers’ goals and side with the teachers when it comes to completing work on time and accurately, they might have a better chance of getting the impression that what they are learning is important and knowledge is valued in society.

Bribing children with money if they bring home good grades is often a last resort to motivate a student when nothing else seems to work. I can’t fault any parents who have tried everything possible to help their students perform well in school, including finding tutors and seeing behavioral psychologists who specialize with children. Motivating with money doesn’t always have to be bad. If it is balanced with other messages, there is a better chance of children growing up to have a healthy relationship with money.

Disclaimer: I do not have any children, so I haven’t had any practical experience with this. I’m interested in hearing readers’ thoughts, especially from those of you who have children and have considered paying or do pay rewards for report card performance.

Update: A few days after writing this article, I came across this review and summary of Drive: The Surprising Truth About What Motivates Us by Daniel H. Pink. The research outlined in this book confirms some of my thoughts about motivation that can be applied to this situation, and goes much further.

The original version of this article, Paying Children for Good Grades, is copyrighted by Consumerism Commentary.

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Today is the first day of Giveaway May at Consumerism Commentary. Every weekday this month, I will be giving away a prize to a Consumerism Commentary reader. Keep reading this article to find out how you can win a $50 gift card from Amazon.com.

Yesterday, Kate Levinson appeared as a guest on the Consumerism Commentary Podcast, speaking about the role of emotions when dealing with personal finances. The author of Emotional Currency: A Woman’s Guide to Building a Healthy Relationship with Money spoke of the importance of our earliest interactions with money. The first memory one has about money, perhaps a memory pertaining to one’s family’s interaction with finances, plays an important role in shaping the attitude towards and relationship one has with finances later in life.

I stretched my brain and I could not think of any specific formative memories that pertained directly to money. This is probably one of those aspects of my life that would only surface after multiple sessions with a psychologist. I do, however, remember that my father used to drive an old Datsun car. Having the latest and greatest car was not an option for us. As an adult, I know now that my parents did struggle with finances early on, but I never remember feeling that money caused stress at that time.

Today’s giveaway is simple. Here’s what you need to do to enter your name for a chance to win the $50 gift card:

1. Leave a comment below before 10:00 pm Eastern Time today, May 2, 2011, with your earliest memory pertaining to money and how it might have affected your attitude towards money.

That’s it! Keep in mind that you must be eligible to win. Did you miss the deadline? If so, don’t worry; there will be more to win every weekday this month.

Update: It’s now past the deadline to enter this giveaway. Look for the next giveaway here.

The original version of this article, Your Earliest Money Memory ($50 Giveaway), is copyrighted by Consumerism Commentary.

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This is a guest article by Elle, the author of the blog Couple Money.

Handling personal finances can be an intriguing, challenging, and rewarding process. Being married and handling finances can double those effects. My husband and I have learned through the years that working together can be powerfully effective and motivating. While every couple is different, I thought it might be helpful to share some tips and tricks that have helped us through the years. I hope you’ll share your own stories and advice in the comments after the article.

Merging two spending styles

My husband is a conservative saver. He can live on a shoestring budget and hardly deviate from it. My husband dislikes debt and paid off his small student loan a few months after he graduated.

While I enjoy saving, I know that if I’m going to succeed with my goals, I have to automate the process. I started investing while at one of my first office jobs while in college. I also grew to enjoy earning income from different jobs during my college years.

We could either try to change one another or we could try to use our specific strengths to our advantage. To do that, though, we need to have some goals to share between us to keep us on track.

Defining goals together

For us, being on the same page as far as goals has been a huge help with keeping communication open. When we got engaged we sat down and shared our assets and debts with one another. Once we were married, we decided to set up some general goals, such as establishing a small emergency fund together. As the years passed we’ve created more goals, including:

• Paying off the car loan and staying away from car payments afterwards.
• Buying a home that is well within our budget and paying off the mortgage within 15 years.
• Going on debt-free vacations.

To do this we used own complementary skills to set up our system. My husband created the foundation for our family’s budget as he’s naturally frugal. I made sure our bill payments and savings transfers were all automated. We started small, but we set aside automatic deductions for our retirement savings and we created a plan to reduce our debt.

Creating a financial system that works for us

With our goals in mind and duties divvied up, we had to find a banking system that worked for us. We originally banked with a national bank, but we found their customer service lacking and their interest rates disappointing. We then switched to ING Direct to handle our family’s finances.

Most of our money goes into our joint checking and joint saving accounts. We do have separate accounts for minor personal spending, but for the most part, we find that combining our finances makes things much easier for us.

We currently have a few savings sub-accounts at ING Direct for general and specific goals:

• Joint Savings
• Car Replacement Fund
• Vacation Fund

Since we’ve been married we’ve focused on having a system where we try to keep our necessary expenses under one income and use the second income to reach our financial and personal goals. With the majority of our spending and savings automated, we’ve managed to cut back on the time used for keeping tabs on the accounts. However, we knew we need something to help us stay on top of our money.

Using Mint to track spending

To keep us on track we use Mint to send ourselves email alerts if we go off budget in certain spending categories. Mint is wonderful because you can automatically sync all of your financial accounts, such as checking, savings, credit card, and investment accounts. However, if you only want to track your joint checking account, you can do that as well.

We don’t have to keep every single receipt and enter it into Mint. Instead, Mint pulls our spending data and organizes it. It’s fairly accurate as well — about 80-85% of the time it categorizes the expenses correctly. The only problem I noticed with this system is that certain bill payments have to be sent out as paper checks from our joint checking account.

We’ve had some discussions based on our spending notifications due to some bills that pop up time to time. In the past we’ve talked about moving expenses and then home improvement tweaks that we wanted to make. If we started spending more than we planned to spend, we talked it over and tried to reach a compromise.

I’d like to say that once a system is in place, you’ll just set it and forget it, but that’s not the case with family and finances. It’s constantly changing as our circumstances change. Right now, we’re expecting our first child in July, so as the due draws closer, more spending has been occurring for the baby. We’ve had to talk about what a realistic timetable would be for the both of us and our budget.

Using Google Docs for our family budget

My husband and I are both fans of spreadsheets. When we were working on our budget, my husband decided to set up a spreadsheet in Google Docs to help us manage the information easier than emailing one another back and forth. He’s done a wonderful job on creating something realistic that we can use.

A big advantage of using Google Docs is how easy it is to share changes. It’s a wonderful feature to have one of us update the budget and the other spouse get a notification of the change. We usually don’t make drastic changes to the document, but even being kept up-to-date on minor adjustments is helpful.

Blogging offers us a financial snapshot

When I blog over at Couple Money, I share our financial situation to help others build their net worth together, but also as a way for us to be accountable to one another. I had blogged before at another site when I was a college student and found that writing about what I was learning (from books and life) helped me to easily keep to my goals.

Every month I review the previous month’s income and expenses on the site and share if we’ve increased or decreased our family’s net worth. Some readers believe that focusing on the numbers isn’t too helpful, as things come up and can lower our progress, but that’s not the main benefit of the net worth updates.

To prepare for the post, my husband and I will look at the big picture once each month and see if we could’ve improved our spending or savings. It’s a chance for us to chat with one another about our finances without pressure. We look at the numbers and we celebrate the good that we did and try to fine tune anything that we don’t like.

Thoughts on couples and money

I’ve shared how we handle our spending as a couple, but I know it’s not the only way. I’d love to hear how you do it. How do you handle your finances in your family? What has been the easiest part? What has been the worst? Are there any tools that you use to keep your finances in shape?

The original version of this article, How to Financially Succeed as a Couple, is copyrighted by Consumerism Commentary.

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Parents who offer their young children an allowance or pocket money are helping to introduce the concept of money at an age when they are susceptible to ideas they will hold for the remainder of their lives. It’s a good idea to allow kids to gain exposure to to concept and application of income and the decisions that need to be made surrounding that money. Introducing money-related concepts at an early age helps to reinforce the idea of financial literacy, a quality that many people believe is missing in the general public.

There are generally two ways to look at offering an allowance, particularly as children are gaining the ability to handle larger responsibilities. Allowances can either be tied to chores and used as a motivational tool to inspire help around the house, or they can be given free of any condition. There are dangers to both approaches.

Approach #1: Allowance in return for chores and help around the house. This is the favored approach for many parents because it emulates the experience their kids are likely to have later in life: they will be rewarded in money for the quality and quantity of the work they provide for someone else. I’m not a fan of this approach for several reasons.

• Helping around the house is not a job. A housewife doesn’t get paid for cleaning; a father who stays home to babysit does not get paid per hour. Helping around the house is something that everyone who can do should do simply because they are a member of the household. There will be more than enough time in someone’s life to earn money in return for work.
• This type of allowance glorifies money as a reward. Money is your “reward” for working for someone else as an adult, but without proper control in formative years, children could grow up thinking that money is the only reward for working. This type of attitude could lead the children as they mature to choose only those careers that pay high salaries or consider marrying only a spouse who comes from money. These things aren’t bad per se, and they are legitimate choices, but to focus on money at the exclusion of all other things that make life meaningful could lower their quality of being. With the correlation between money and work ingrained, money becomes a primary motivator. This can make it difficult for someone to succeed or excel at their job, because they might wonder why they would put in any extra effort if not compensated immediately.
• You become an employer, not a parent. The relationship between a parent and a child is unique, but introducing the idea that being a member of a household warrants a payment is a dangerous mangling of what should be a non-financial relationship. The power that a parent has over a child is now linked to the financial relationship rather than the familial relationship.

Approach #2: Money should be available, but not in return for working around the house. This invites childhood misconceptions. They may believe that money is available whenever they need or want, or that their parents will always provide money. Regardless, I believe this is the better choice as long as it is controlled and accompanied by guidance in terms of saving, spending, and giving responsibly.

All the guidance you could provide as a parent is good in helping children grow up financially literate. Even through teenage years, when children might be interested in getting a job outside of the house, children’s attitudes about money are still in formative stages. Any lessons you may impart will not be effective without good modeling. The best thing you can do for children is to manage your own money responsibly and let them see what’s happening behind the curtain. Take them with you when you go to the bank. Let them see the work you do for charity or encourage them to learn about the organization you’re involved with. Have positive financial discussions with your spouse without being secretive. If your experience with money isn’t positive, let your children see that as well.

I don’t have any children yet, so my opinions could change when my time comes. What are your thoughts about motivating children through an allowance? What approach works for you?

Photo: woodleywonderworks

The original version of this article, The Dangers of Motivating Kids Through an Allowance, is copyrighted by Consumerism Commentary.

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If there is a college graduate in your life, he or she is about to receive a number of gifts. The first gift will be the realization that it can be difficult to find a job in this economy right now if the goal is to get a job in the same field of study as the degree. Without a job, our graduate might have little choice but to move back in with mom and/or dad and weather through the recession with curfews as if life were to replay high school.

The next gift will be the shock of the real world in the form of a job. Suddenly the graduate will have to report to work, perhaps at 8:00 am. It might have been easy to blow off early morning classes, but consequences in college were limited compared to the thread of being fired in the first month on the job.

Soon after that, perhaps six months after graduation, the first student loan payment will be due, shackling the graduate into earning enough money to pay off college debt in ten or more years.

If there is a college graduate in your life this year, consider these graduation gift suggestions.

1. Free room and board. There is a time and place for the “sink or swim” mentality, which comes from the idea that throwing a baby into a pool will force it to instantly learn to swim in order to survive. I’ve never known anyone to take this literal approach, but in the current state of the economy you could do your graduate a favor by allowing her to start her career without having to worry about the first several rent checks.

Rent-free living should not last forever.

2. Clothing. Every job has expected attire, even if the environment is very casual. Professionals need professional clothing, whether for interviews or in the office. The graduate is going to need to project an image in the workplace, and clothing is important to making that happen. A gift certificate would work well for clothing, allowing the graduate to choose her attire, but some guidance may be necessary because not every graduate has experience in dressing appropriately for professional situations.

3. A computer. Powerful and reliable notebook computers are relatively inexpensive now. Remember to pre-load important software for someone who will be starting their first post-college job: financial management software. I use Quicken 2011, which is available on sale here, and I still prefer the robustness and flexibility of desktop software like Quicken over web-based financial management like Mint.

4. A gas gift card or monthly commuter pass. Transportation is one of the many expenses new workers have to pay up front before receiving their first pay check. If your graduate has a job lined up and a place to live, she should have determined her transportation needs.

5. A car. If you have the means, a used car would make a good gift for the graduate as well. It doesn’t have to be the latest model, but employers expect employees to have reliable transportation; a clunker that breaks down once a week and causes the new employee to be late arriving to the office will not make a good impression and will not do any favors for career advancement.

6. Cash. Money is helpful when wielded for the forces of good. If you trust the graduate to use the money responsibly, to pay down debt for example, cash can be a good way to go. But don’t give cash if you will be offended if the recipient chooses to use the money for vacation or entertainment. If you cannot give cash with no strings attached, don’t give cash — try a gift card.

7. The gift of mistakes. The last thing a graduate wants is to be told what choices to make. Some guidance is helpful, particularly in choosing the first job out of college, as many graduates do not know the effect this choice can have on earning potential for the rest of the graduate’s life. But let them make mistakes, and when they do, help them interpret them as learning opportunities.

If you are a parent of a graduate this year, what gifts, if any, will you be bestowing upon your graduates?

Students and former students, what gifts have you received or would you have liked to receive?

The original version of this article, Seven Great Gifts for College Graduates, is copyrighted by Consumerism Commentary.

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This post is by staff writer Smithee, who may just be the financial opposite of Flexo.

You’re going to think I’m crazy. At the very least, you’re going to think I haven’t learned how to live a financially responsible life. I’ve written here many times about my struggles with just making ends meet, and for a while, I thought I was in the clear. Last Spring, after thirteen years, I forced myself to pay off my credit card debt, and by the time August arrived, I was finally saving money in earnest. Then I got laid off the very next month, and since then, things have been unpredictable at best.

So, I’m 35 years old with less than one month’s worth of emergency savings. My wife and I are living off of her salary and my Unemployment income. What better time to move from Dallas to San Diego, right?

The short version of the long story

In 2002, I was living in Seattle and loving it, even though I was broke and living in a clean version of squalor. I moved to Dallas to be with a woman I loved, who dumped me within 72 hours of my arrival. I was stubborn and even more broke, so I stayed. I eventually met a different woman and we have a happy marriage, but we don’t like Texas. I’ve been here for about 8 1/2 years. Dallas has been very good for my career, and I like all of my friends here, but this part of the country doesn’t suit us. We visited a friend in San Diego a couple of years ago and fell in love with it.

My wife does some very specialized work with accounting software, and there are only a few people in the U.S. who have comparable skills and knowledge, so she gets a lot of attention from recruiters. She’s been unappreciated at her current employer since the beginning, but because of her contract, she can’t easily go to work for one of their clients, or most other places in Dallas / Fort Worth. Another state like California, however, is wide open. She followed a San Diego lead from a recruiter on a lark, and against expectations found the job offer tempting. Last Friday, she accepted the offer to start work there at the end of February.

Wisdom versus happiness

As I wrote for Consumerism Commentary and read more about personal finance, I came to the conclusion that my family isn’t going to follow a standard plan toward retirement. Given our ages and non-existent savings, we’ll never catch up by having normal careers and saving modest amounts. It’s simply impossible. The only advantage we have is that we don’t have children, and unless something radical happens in our brains and we decide to adopt, we won’t have children.

If we ever want to retire, the only available option is to “make it big” somehow. We both want to be successful in some corner of the entertainment industry. In her heart (and on her hard drive), she’s really a writer. As for me, I’ve been trying a little of everything, trying to figure out what I’m good at and trying to build an audience.

Then again, maybe we won’t ever want to formally retire. Maybe we’re the sort of people to work especially hard for eight months then take four months off every year. At this point, anything is possible… except for the normal plan of starting work out of college and saving every year until you’re in your 60s and coasting until death.

The new plan

All of the above is a rationalization of our decision to incur some significant credit card debt again, before finding a way to crawl back out. I don’t see a way around it. My wife has a set date she needs to be in San Diego working, and I need to follow her there as quickly as I can in order not to have two sets of monthly payments. I want to do this with the minimum of impact on our credit scores, but I am sure they’ll take a downward turn. I just hope it’s more of a stroll than a free-fall.

Photo: kimrose

The original version of this article, Change of Plans, is copyrighted by Consumerism Commentary.

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The National Endowment for Financial Education (NEFE) has concluded through conducting an online poll that 31 percent of people who combine finances with their spouse or partner have been deceptive about money with the individuals who trust them. Some lies are more hurtful than other lies, so the study looks at the type of financial infidelity.

More than half of the respondents, 58%, hide money from their spouse. 54% hide minor purchases. Almost one third, 30%, hide bills or statements from their partner. 16% lie about a major purchase. 15% have a hidden bank account. 11% of those surveyed lie about their debt, and another 11% lie about how much they earn.

Although my finances are an open book, I understand why lying about money comes easily, particularly in new relationships. If you’re meeting a potential husband or wife for the first time, you want to put your best foot forward, and that often involves making yourself sounds like the ideal person, someone you want to be, other than sticking to the more boring truth. That embellishment could easily turn into a lie, and at the beginning of the relationship, some might be afraid of the other individual losing interest. At some point after that, you can’t go back and tell the truth because he or she doesn’t want to be branded a liar.

Unfortunately, long-term relationships can be founded on a misunderstanding of finances, and there may be no turning back.

If the temptation to exaggerate is so great, finances should probably be kept out of discussions until the couple is more intimate. When money doesn’t play a role in the initial attraction, there will be less of a need to embellish the situation in order to attract someone else.

The survey revealed that men and women were just as likely to lie about their finances, but women more often said they caught their partner in a lie. Men were significantly more likely to say that their partner was lying about a purchase, while women were significantly more likely to say their partner was lying about income or debt.

If a couple has decided not to combine their finances, there may be no reason to lie to your partner; what’s yours is yours. For those with combined finances, there is a trust that should not be broken. A therapist from Boston who has been working with couples who have experienced financial infidelity, offered his opinion to Forbes Magainze. Carlton Kendrick lists four primary reasons an individual might lie about money to his or her spouse, pragmatism, control, guilt, and fear:

The pragmatic lie may result from planning an eventual split and not wanting the other to know how much money is available. Financial infidelity for control may include revenge spending, as one partner overspends to prove their independence or to get back at the other for something lacking in the relationship. Knowingly irresponsible behavior may cause guilt and embarrassment, so the person attempts to cover it up. Deceit may also occur because they fear their partner’s reaction to the truth.

If it doesn’t affect your ability to pay for the expenses you need to cover, and if it doesn’t change your ability to meet other goals, you may have the opportunity to save money on the side for a surprise gift for your partner. This is a lie with good intentions. I’d prefer not to see savings on the side take the form of a lie, however; you can agree with your partner to have separate funds set aside for such occasions.

Are there any situations when it is justified to lie about money to your spouse?

The National Endowment for Financial Education, Forbes
Photo: klaaspieter

The original version of this article, When Can You Lie About Money to Your Spouse?, is copyrighted by Consumerism Commentary.

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In American society in the past, when it was more common for a family to have one income, that income might have covered the family’s expenses that correspond to the expenses that two incomes pay for now. That family, if typical, often consisted of a father, a mother, and two children. The one income was enough for the necessities and, if this was a middle class family, some additional expenses. For a variety of reasons, two-income families are more common now. The question of whether the two incomes represent money for the whole family or whether there should be separation between the funds contributed by each income-earner.

New couples are often faced with this decision. Some will choose to ignore the issue and never communicate about money, which could lead to other problems after time. Those who do confront the situation have a number of options. Although some states make the decision for a couple from a legal standpoint, there is still the issue of how money will be handled practically.

Three options for combining finances

Here are a few of the possible options for managing two (or more) incomes in a family.

1. Keep finances separate. This is an option that works for many households. Having separate bank accounts can be beneficial if everyone is comfortable managing their own finances. One of the most important aspects of communication within a long-term relationship is communicating about and agreeing on long-term goals. When both parties are dedicated to these goals and make financial decisions that help achieve these goals, like getting out of debt and spending less than one earns, there is no harm in having separate savings accounts and investments. That doesn’t mean that there should be secrets, however.

This may be a good option when both incomes are roughly equal; no one person needs to contribute more to keeping the family running than the other. It is possible for families to contribute an equitable amount, though, even if incomes are not roughly equal. For example, if Joe brings in 80% of the family’s income, his contribution to family expenses could account for 80% of the total.

2. Combine all finances. When two incomes are significantly unequal, this solution may make more sense. Also, if only one individual in the family has the skills or the desire to manage finances, combined finances could make money management simpler. There will be fewer checking accounts and investments to manage. Some people argue that this is the best option to help encourage long-term survival of a marriage because it relies on communication, trust, and compromise, but I think all choices require the skills that are beneficial to a relationship.

Combining all finances would also mean that “his” debt prior to the combination would become “our” debt. If only one individual is entering the relationship with debt, consider the idea that two individuals are now a team, and may work to pay off that debt together. Does it matter if that is student loan debt that accumulated in order to qualify for a high-paying job or if it is credit card debt brought on by a shopping compulsion?

3. Combine some finances. This isn’t an all-or-nothing decision. Legally, if the relationship ends and assets are divided, your state may have laws that govern whose assets are whose and whose debts are whose, that’s only a situation during a divorce. Assuming that the marriage lasts forever, you have the option to handle finances however you determine is best for you. There are a few ways a couple can combine part of their finances. They could keep separately owned bank accounts for the bulk of their income and spending but establish a new account for household expenses. Each income-earner in the relationship could contribute an equal amount or an amount representing their percentage of the total income, like above, but the bulk of the income will stay with the individual. The household gains only what is necessary to pay the expenses, and investments and other assets remain separately owned.

Another approach is to combine most of the income, leaving only a little for each partner. This is often preferred because it establishes shared assets while leaving some “play” money behind. When all income is combines, buying presents for one another seems almost like an empty gesture because the money is coming from the household. With small separate accounts set aside for small surprises, even though the money is coming from the same place, it can feel like you’re not robbing from the house or using part of the recipients money to buy the gift. With separate accounts, you can make that purchase at Jared’s or B&H Photo and Video without the other wondering what they should be expecting.

Who owns the house?

When it comes time for a new family to buy a house, if they choose to do so, will both parties be splitting the down payment and mortgage payments equally? Whose name will be on the title? There could be a situation in which one individual earns more than the other, but both parties want equal ownership. This can be a tricky situation, and it’s something to discuss early on in the house hunting process, before you even begin to look at houses.

When is the right time?

There is a risk in combining your finances too early. If you don’t know whether you will be spending the rest of your life with your current partner, it’s a safer decision not to combine your bank accounts and investments. That goes for adding authorized users to credit cards and co-signing loans, as well. The best time to combine finances is after marriage, though engagement can be a good time to get the process started.

Each relationship has its own dynamics, and a decision that works for one couple may not work for another. For those who do wish to combine finances, here are some tips for combining money successfully in a relationship. Do you combine your finances with your spouse or partner?

Photo: re-ality

The original version of this article, Should You and Your Spouse Combine Money?, is copyrighted by Consumerism Commentary.

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The world cheered as the thirty-three miners trapped a half-mile underground in Chile for more than two months were pulled aboveground to safety. The rescue mission was a fantastic success. Aside from the miners, no one can be happier for their survival of the ordeal than their families. Mining is a risky profession even when mines are relatively safe, and I know how unlikely it is that I would ever wish to work every day with the constant threat of being trapped.

From an event like this, observers like me can do not much more than take away some good tips for living our lives and handling our finances.

1. Life is more important than money. Mining is a risky business, but men around the world take these jobs because their paid relatively well and helps them provide for their families. This may be obvious, but it’s good to have a reminder occasionally. You can always earn more money, but a lifetime is a finite resource. Don’t get bogged down with financial details to the point at which it affects your ability to live; keep it simple so you can spend your time living.

2. Prepare your family. These families were lucky; the breadwinners have lived to work another day. They will go on living, providing for their families, for what I hope will be a long time. The situation could have easily been worse, and that income would have disappeared. In financially sophisticated societies like the United States, life insurance is available to help families survive after the permanent loss of an income. Have life insurance if anyone else relies on your income for their well-being.

3. Stay organized. If you are the individual who takes care of the family finances by paying the bills and monitoring the accounts, think like a business and create a succession plan. Train someone else in the family, your wife, husband, child, or parent, for example, to access all the information that is needed to take care of the financial necessities in the event you find yourself unavailable for an extended period of time.

4. Never lose hope for the future. In a tough ordeal like this, hope can be a powerful enough force to keep someone alive. Draw upon hope by thinking about your family and friends, and when you are with them, ensure they understand your appreciation.

5. Even today’s big issues are not so big. As all miners survived a worst worst case scenario, there is never reason for anyone else to believe that they can’t make it through everyday problems that are much more trivial. When all you care about is surviving until the next day, it doesn’t matter who the president is, you won’t be upset you missed your favorite television show, and there is no need for the latest iPhone. In the end, these things will hardly matter.

6. Teamwork results in the whole being greater than the sum of its parts. Even people who function best individually rather on a team should work to align themselves with like-minded people. Whether you’re working on a team or being a member of a group with whom you have interests in common, you will have a support group when needed. Living is a social activity, and people who associate in groups of any sort are happier, more successful, and live longer than those who chose to be alone.

I’m inspired by stories of survival, and I often wonder if I have what it takes to survive the same ordeals. I don’t know what I would do when faced with a terrible situation. I do hope my survival instinct is strong enough. For those of us whose exposure to danger is limited to driving daily on the New Jersey Turnpike, Garden State Parkway, or similar highway, our problems are never as bad as we often believe they are.

The original version of this article, 6 Money and Life Lessons From the Chilean Miners, is copyrighted by Consumerism Commentary.

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This is a guest article by Sam, the author of the blog Financial Samurai and the founder of the Yakezie Challenge and Network. He writes a column for Consumerism Commentary every other Tuesday.

Patrick is one of the most ambitious people you’ll ever meet. After graduating summa cum laude, Patrick joined Morgan Stanley and made his first $100,000 in the stock market at the age of 23. At age 26, he bought his first condominium, and the very next year he made Vice President. Because Patrick is accustomed to getting in the office at 5:30 am and working until 7:30 pm every single day, he finds boredom on the weekends. Like clockwork, his body wakes up automatically no later than 6:00 am, and Patrick twiddles his thumbs every Saturday and Sunday until his friends wake up at 9:00 am. Sick of the boredom, Patrick decided to start a business during the morning hours and has spent the last year trying to launch it off the ground.

At the age of 30, Patrick married his longtime college sweetheart. He admired her for her kindness and her patience. She is a smart woman who has a steady but un-lucrative career in retail. Yet, after a couple years of marriage things started going sour, not because of the stress from their jobs, but because of the lack of private time outside of the office.

No off switch

Patrick has the same intensity on the weekends pursuing his online business as he has during work. Janice, his wife, on the other hand, loves to sleep in and relax on the weekends. That’s what weekends are for, she would always tell Patrick. She’d ignore him whenever he nudged her at 8:00 am to go out and play. Remember, by this time Patrick has already been up for two hours working on his side business.

Janice is musically gifted and is able to play both the violin and the piano. Yet, she no longer practices and plays her sweet music. Patrick has encouraged her to keep up her talents, but she is too tired during the weekends after a long week of work. It’s disappointing to Patrick because he regularly works 60 hours a week, and then comes home and puts in another three hours a day on average to ensure that his online business grows. Patrick understands that he shouldn’t expect the same type of intensity from his wife, but he can’t help but feel disappointed in her lack of passions.

The breakdown

One Friday night after Patrick had spent several hours working on his new site design after work, he asked Janice to come take a look and tell him what she thought. Patrick was sure the latest version would be the one. Instead of being encouraging, she told Patrick that a competitor’s site was so much better, and that he should work on it some more. This is when Patrick completely lost it. He didn’t yell at Janice, instead he began to cry. After working so hard, for so long, the person he loved the most had told him his work wasn’t good enough.

Patrick’s entire purpose for building his online business is so that they can have a business of their own during their early retirement years. Sure, the online business is Patrick’s vision, but the overall purpose is for both of them. He is so driven by the desire to take care of Janice that he is willing to put everything he has, time wise and emotionally into his project. Yet, he is so frustrated that Janice doesn’t invest the same amount of effort outside of work as he does. Patrick has no parachute in other words, and can’t depend on Janice to save enough money for them. The onus is almost entirely on him and that’s a lot of pressure.

If only things were like before

There used to be a time when Patrick admired everything about Janice. Now, things have faded. He’s sad that she doesn’t share his same zeal, which for the longest time was fine. But, he’s drawing the line now that she is no longer supportive of his efforts. Patrick can’t go on accepting the way things are and wants things to change. He wonders whether his drive to make a sustainable business online needs to be toned down for the sake of their marriage. Most of all, he just longs for Janice’s support again. Things were so good when they were younger. Now, so much has changed.

What would you do if you were Patrick? Do you think he should extend his early-forties retirement goal and his drive to create an online business so there’s less pressure? What should Janice do to ameliorate the situation?

The original version of this article, When She No Longer Supports You, is copyrighted by Consumerism Commentary.

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This is a guest article by Sam, the author of the blog Financial Samurai and the founder of the Yakezie Blog Network. He writes a column for Consumerism Commentary every other Tuesday. This article serves as an introduction to this new bi-weekly column.

At age 15, I stopped growing and I remember being so disappointed. I was one inch away from six feet, a magical height which I thought would gain me all the power and girls in the world. Of course, my mind was warped given all the garbage I read growing up. Two of the most memorable lines that have stuck ever since are, There’s no such thing as an American President under six feet tall, and, How are you going to date a supermodel who likes to wear three-inch heels?. Oh yes, it was a sad day and my dreams for a great future were dashed so early on.

People love to talk in extremes. None of us have a snowball’s chance in hell of becoming the President of The United States of America. Certainly none of you personal finance buffs will ever date a woman as hot as Gisele Bündchen or a man as sexy as Dr. Phil. Yet, we can always dream!

The motivators

As a teenager, I learned right away that love and money are the two most powerful driving forces behind so much of what we do. Do you remember how sloppy you’d let yourself get once you no longer had someone to crush over? You stop working out, let your hair grow wild, and wear the same old clothes over and over again. Yet, as soon as you see that amazing woman walk your way, you stand up straight, suck in your gut, and begin to smile. If there’s a chance you’ll ever see her again, you may even consider working out and eating healthy again. All for what? All for the chance to be with her.

Money is equally intoxicating. We go to great lengths to accumulate wealth, sometimes to our own detriment. I once punished myself every morning by opening up the local McDonald’s at 6:00 am for $3 an hour. How else was I suppose to afford a beater to get to school? At my station I’d fry nine eggs at a time, with both hands moving swiftly in order to produce those wonderfully healthy Egg McMuffins we’ve all come to love. I didn’t do so well unfortunately, so my manager promoted me to work the cash register.

All was going horribly until she walked in the door. She so happened to be the most beautiful girl in the world whose attention I’ve been trying so hard to get for the longest time. Not in this uniform! How embarrassing, I thought to myself. Too late. She walked up to my register, gave me a smile and ordered a side salad and a Quarter Pounder with Cheese. I was smitten and hooked her up with a free apple pie on the side. From then on, all I wanted to do was make my $3 an hour at the cash register so one day she would return and we could have our 30 seconds of bliss again.

A new offering

We must constantly balance our desires for financial freedom with our hopes of being with the people we care about the most. This new column will explore the stories of people who are striving to achieve harmony with love and money. We’ll discuss all the dilemmas people face and hopefully find veritable solutions through our discussions. I hope to see you soon over the next few articles!

The original version of this article, Searching For Love and Money In All The Right Places, is copyrighted by Consumerism Commentary.

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The results of a study at Cornell University show that in a long-term relationships such as marriage or cohabitation of over a year, income disparity within the couple increases the likelihood of infidelity. The headlines of the study speak more to the data that show men who earn less than their wives are five times more likely to cheat. Women who are financial dependent on their husbands are more faithful.

Like most surveys, the results depend on the participants being truthful about their thoughts and actions, and not everyone may be willing to admit to cheating on their spouse. Nevertheless, the researchers believe the study is accurate even if some of the answers were not fully forthcoming.

Note that the study doesn’t claim a causal relationship between income disparity and infidelity, just a correlation. Relationships may be stronger when both individuals have a similar level of income. While I often hear that opposites attract, what’s true for charged ions does not always translate to humans. It’s easier to form a partnership in life when a couple can agree on major life goals and a shared attitude towards building wealth or paying off debt.

It’s probably not the income disparity itself that correlates to increased infidelity. If someone feels inadequate in one situation, they might seek to compensate in another. This could explain why men cheat when they earn less than women, but the study also shows that men have an increased likelihood of infidelity when they earn significantly more than their partners. Other studies have shown that wealthier men and women have more sex than their less wealthy counterparts.

The results of the survey shouldn’t concern anyone. There is more that goes into infidelity than differences in income. Every relationship is unique.

Are you in a relationship where your partner earns significantly less or significantly more? Has this caused any difficulty? Readers, feel free to share your stories, anonymously if you like.

Photo: KRO-Media
Husbands Who Earn Less Than Wives Are More Likely To Cheat, Whitney Blair Wyckoff, NPR, August 16, 2010
More Money, Better Sex, MarketWatch, February 10, 2007

The original version of this article, Money, Sex, and Infidelity: Who is More Likely to Cheat, is copyrighted by Consumerism Commentary.

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When a couple marries or otherwise commits to be in a long-term relationship with each other, the question of whether to combine money usually arises. The debate about whether what could be called “his money” and “her money” should become “our money” is endless. Different arrangements work for different couples, and this article doesn’t address that question.

Those couples who do decide to combine finances often stop at the minimum. They might create a joint checking account for shared expenses like rent or mortgage payments but don’t make an effort to take co-ownership of the complete financial picture. I have not been in a situation that warranted a combination of finances, but I’ve given the issue some thought.

1. Agree on life goals. This isn’t necessarily a pure financial concept, but your money depends on what you want to do with your life. Being wealthy is not a goal because money is nothing but a tool to help you achieve accomplishments that are important to you.

It may be safe to assume that a successful relationship stems from agreement on world views and major life goals, but work out the details. For example, what will retirement look like? What is the philosophy about philanthropy? Will you leave an inheritance? Opening the communication about these larger issues, and finding compromises if necessary, enables a better decision-making process.

2. Combine basic spending and savings accounts. As mentioned above, this is usually the first and last step couples take. This is easy: open a joint checking account at your favorite bank. Even the question of whether each individual in the couple contributes the same dollar amount, the same percentage of income, or some combination, is one of the easiest questions you’ll have to consider when combining finances.

This step is easiest when each side of the couple produces roughly the same amount of income for the same amount of work. Perhaps a better way of looking at this question is considering how much each individual should keep for his or herself, making the shared account the default.

3. View investment portfolios as a whole. More difficult than an income disparity is a risk tolerance disparity. There could exist a couple wherein one individual is comfortable putting most of the family’s long-term wealth in the stock market for a better chance of growth over that period while the other would prefer the funds to be safe and less volatile. This couple will have a more difficult time finding a compromised solution.

My company offers tools to manage the risk of my 401(k) investments, but the facility of tools like these are limited. If my 401(k) was my sole investment, this automated questionnaire-based tool would be sufficient, but it takes neither my other investment accounts nor a theoretical spouse’s investments. Rather than relying on these tools, a couple should manage their risk in total and make sure they asset allocation and diversification is in line with goals and needs.

4. Work together to pay off debt. Like merged assets such as bank accounts, a committed relationship also turns “his debt” and “her debt” into “our debt.” It’s in the couple’s interest to pay off debt as quickly as possible. This can certainly not seem fair, particularly if one side of the couple worked diligently to pay off debt while the other slacked.

As long as trust, honesty, and open communication are a part of the relationship, there should be no surprises.

5. Everyone is involved. I’ve seen couples where one person handles the finances and the other prefers to have nothing to do with the details surrounding money. I understand that not everyone has an interest in personal finance, as much as I wouldn’t like to believe it because fewer people interested means fewer people reading Consumerism Commentary, and so I accept that not everyone wants to deal with the bits, bytes, cents and dollars. Each couple needs only one person in Quicken or Mint tracking finances with that level of detail. Perhaps some of the bill-paying duties, however, should be shared.

A business partnership is different than a life-long committed relationship. In a business, perhaps only one person handles the finances. In a couple, taking care of money is like taking care of children. Both will grow and develop best when everyone is involved.

How have you succeeded in combining your finances — and your life? If you have decided to keep your money separate, why was this the right choice for you? For everyone, combined or not, what obstacles have you encountered?

The original version of this article, How To Combine Finances for Couples, is copyrighted by Consumerism Commentary.

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My household has almost always included pets. First, let me establish the true hierarchy. It’s very clear when you live with one cat or more that they own the place, and we humans are only permitted to share living space with them because we provide food and shelter. The only years I’ve lived in a house or apartment not “owned” by a cat were when I was living in a dorm on my university’s campus and for some time following graduation.

As a single man without a human roommate, my cat spends a lot of time with me. He greets me when I come home from work and spends the evening at my feet while I work on Consumerism Commentary and other projects. What we interpret as unconditional love from a pet like a cat is invaluable — you cannot put a price on such a thing.

That’s what we’d all like to believe, anyway. I knew this when I wrote about 10 unusual ways to save money for U.S. News & World Report. I had the apparent audacity to suggest that if you cannot afford the responsibility of fully caring for a pet, you should not have a pet. More precisely, I said, “get rid” of the pet, which may have been a more heartless way of stating the fact, but I still stand by the thought behind the words.

Pets are money drains, cute and lovable money drains. My cat happens to be a low-maintenance, frugal pet. Food and litter cost me only $50 a month or so, and that’s normally the bulk of my expense. I took my cat to the veterinarian this past weekend for a check-up and to determine whether there’s a pathological reason he lost weight over the last few months. The one visit cost more than $250. While results of the blood test are still to be determined, the vet was able to tell during the visit that my cat’s gums are not healthy. Possibly in an effort to scare me away from a procedure, he mentioned that full dental work could easily be $1,000.

He’s an older cat, and as he continues to age, I expect expenses like these to increase. But my experience so far pales in comparison to my boss’s dog. Her dog has a thyroid problem that keeps the pet on and off medication. Not only must she pay for his drugs, repeated visits to the vet, and special dietary considerations, but she also must factor in the cost to clean up after a large dog that cannot always control its bodily functions until it is let outdoors.

Taking care of a pet can be a significant expense, and it is not a responsibility that anyone should take lightly. If you’re not in a position to take care of a pet, including the ability to afford a healthy lifestyle that involves regularly visiting the veterinarian and paying for procedures that ensure the comfort of the creature’s continued existence, you should not own a pet. Living beings deserve better care, and love is not enough.

If your financial circumstances change due to forces beyond your control and caring for a pet is a major expense that you can no longer afford, then you must at least consider your options for removing the pet from your care. While adoption agencies are already overcrowded with pets who need a home, living creatures designed for domestication, as are dogs and cats, deserve families who can care for them fully, not just with love.

When my friends had baby who was determined to be allergic to cats, I agreed to adopt their pet when they were having difficulty finding a home for him. This is the cat who has lived with me for the past five years. I agreed to adopt knowing I was likely to be able to care for him through his old age, not because I selfishly wanted a pet. I would not have been able to do so several years earlier, a time I was having trouble affording necessities for just myself.

I strongly suggest considering the financial and emotional responsibilities before committing to care for a pet. The “unconditional love” we receive from pets is not worth the financial hardship we may encounter if we are not prepared for all the responsibilities. The New York Times has an insightful look at the true cost of pet ownership here. I found this link on Free Money Finance, where FMF often discusses the financial realities of pet ownership.

Update: For more on the realities of pet ownership, take a look at Donna Freedman’s article, Why You Can’t Afford a Dog. Also, PetFinder has these tips for saving money on pet care.

The original version of this article, Pet Ownership: A Financial and Emotional Responsibility, is copyrighted by Consumerism Commentary.

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In an earlier part of the century I was suffering from information overload. TV, radio, podcasts, Twitter, Facebook, clones of Twitter and Facebook… and even with a feed reader, there were too many websites to keep up with. I was getting burned out, and I started having frequent daydreams about giving up and raising goats. This would’ve been dangerous for my bank account, even if my wife was down with the idea. As it is, subsistence farming is part of our vague retirement plan, but to go cold turkey now would probably quickly leave us homeless.

I see symptoms of this in my colleagues, as well, both in my city and across the globe. We feel obligated to keep up-to-date with absolutely everything that might be even tangentially interesting or useful. And while this is possible, it is not possible for a long time. You will burn out.

What’s more, spending a lot of time looking at the shiniest new story will hurt productivity, and even worse, it will hurt creativity. In order to create, there needs to be at least a little bit of a vacuum. That’s why we frequently have good ideas in the shower and while driving.

I suspect it’s largely generational, because when I look at people over the age of 45 or so, they don’t seem quite so obligated to read and watch everything. When I look at people under, say, 22, they also seem more well-adjusted to our cultural glut of information.

I have a proposal: in order not to burn out and give up, you have to learn what to ignore. Instead of blaming “society” for being too full of information, and as an alternative to risking missing out on something truly important, here are some suggestions for putting yourself on a lean information diet.

Watch out for re-Pete

It’s part of the blogging and social networking culture to share interesting stuff, to embed videos and do some (but please, not a lot of) re-tweeting. It’s almost certain that some of your information sources are interested in the same topics, so they’ll want to share those things with you. Because of the shape of overlapping social circles, you’re seeing the same thing more than once.

Spend a few days with your eye on these repeated items and make a note of the people / blogs that do more than their share of repeating. Then stop paying attention to those people. If it’s interesting enough, you will see it elsewhere.

For example, I used to be following a lot more Web design big-wigs until I realized that I could get the same information by replacing them all with the Twitter feed for popular links on delicious.com.

(I feel confident that Consumerism Commentary won’t end up on the “repeat list” for a lot of you. I like how we keep things original and interesting around here.)

A smarter auto-pilot

You have a set of favorite blogs, but not even they can manage to make every new post interesting to you. Let’s say you’re a fan of Apple, Inc., but at the moment, all you really care about are the specs for the new Mac Pro. Instead of trying to keep up with a subscription to MacRumors and/or MacNN and/or The Unofficial Apple Weblog, just set up a Google News Alert for something like:

apple "mac pro" update

Set it to “once a week” and you should learn what you need in plenty of time to make an intelligent decision. Then, just delete or modify the news alert as necessary.

Designated Reader

This might seem extreme, but maybe you’ve already got a person in the office you can rely on to share relevant industry information. Maybe your company even has a system in place where links are collected. There’s no reason why your company’s Twitter account can’t benefit its employees as well as colleagues and clients.

In Conclusion

Not that the world couldn’t benefit from more goat farms, but assuming you still like what you do, I hope you consider some of the ideas above. I think it will improve your quality of life, and make your co-workers happier, to boot.

The original version of this article, Information Consumerism Commentary, is copyrighted by Consumerism Commentary.

If you enjoyed this article, follow @flexo on Twitter and visit Facebook for more updates.

This article is presented by Kelly Whalen, Consumerism Commentary staff writer.

It’s the time of year when everyone is talking about their New Year’s resolutions or goals for the year. Tops on the majority of Americans’ New Year’s resolutions for 2010 are losing weight, quitting smoking, and saving more money.

While losing weight and quitting smoking seem to have nothing to do with personal finance in reality they have a lot in common with the goal to save more money, as well as effecting your bottom line.

By using these personal finance principles you can achieve almost any goal this year.

Automate it. One of the simplest and most effective methods of saving more money is to automate your savings. By automatically withdrawing money you don’t have to think about shifting money around.

How can you apply this to your New Year’s resolution? Take some time to plan now so you don’t have to think about it later. If your goal is to get up and exercise every morning before work, you could lay out your clothes so in the morning everything is ready to go.

Budget. If you don’t know where your money is going it may be hard to come up with the extra cash you need to start saving. You take the time to analyze your budget so you know where you wouldn’t ming cutting back versus what’s important to you.

How can you apply this to your New Year’s resolution? Whether your goal is to cook 365 days out the year, or getting fit you need to come up with a plan for implementation. Planning out the optimal time for you to work out is keeps you accountable.

Dream up a reward. Saving is something we know we should do, but not something that’s fun to do. Coming up with a reward is a fantastic way to motivate yourself, and anyone else in your family.

How can you apply this to your New Year’s resolution? Whether your reward is a pair of designer jeans after you’ve lost that last 5 lbs. or a vacation paid in cash once your debt is paid in full, you can motivate yourself by placing a photo of your reward in your wallet or on the wall, or by using your goal as a password.

Stick with it. When you are budgeting or saving money you will make mistakes, and at times it will seem easier to just stop budgeting and worrying about their saving money. Stick with it then and the payoff will be huge.

How can you apply this to your New Year’s Resolutions? Eating a donut doesn’t mean the diet is over, just like sneaking one last cigarette doesn’t mean you should go back to a pack a day. You will mess up, it’s in our nature to make mistakes. Just remember to pick yourself up and try again.

What are your New Year’s resolutions or goals? Flexo listed his goals for 2010 here. My goals are listed on my own site. Whatever your goals are, I hope you have a happy 2010!

The original version of this article, How To Stick With Your 2010 Resolutions, is copyrighted by Consumerism Commentary.

If you enjoyed this article, follow @flexo on Twitter and visit Facebook for more updates.

This article is presented by Kelly Whalen, Consumerism Commentary staff writer.

At midnight people around the world will be celebrating a new year with celebrations, parties, or a quiet evening at home. You may already have plans to party like it’s 2009, but if you don’t here are a few ways you can celebrate without breaking the bank.

Host a potluck with a twist
Having friends or family over is a great way to be social without having to spend a lot of dough. For adults have everyone BYOB. You will end up with a variety of choices for everyone to try, all you have to do is provide the party music, and the cups.

Throw a kid-friendly party
Instead of keeping the kids up until midnight (never a good idea unless they are teens), shout Happy New Year at the hour of your choosing, it’s a New Year somewhere! Best to combine this with plenty of snacks and crafts to keep the kids happy while parents chat.

Stay home with your sweetie
It may seem boring, but it’s good practice for your old age. A candlelight dinner (if you have kids, wait until they are in bed), a bottle of champagne, and watching the ball drop is a wonderful way to ring in the New Year.

Go out for drinks, but not dinner
Why not save your cash and dinner before you go out? You’ll save a ton since restaurants tend to have price fixed menus.

Be the designated driver
If you are going out, be the designated driver for your friends or family members. Everyone will be so appreciative they will buy you non-alcoholic drinks, you’ll wake up without a hangover, and you won’t spend a dime!

Have any other money saving ideas for New Year’s Eve? I’ll be staying at home with Mr. Whalen, enjoying a movie, and some champagne. However you choose to ring in the new year remember not to drink and drive.

The original version of this article, New Year’s Eve on a Budget, is copyrighted by Consumerism Commentary.

If you enjoyed this article, follow @flexo on Twitter and visit Facebook for more updates.

This article is presented by Kelly Whalen, Consumerism Commentary staff writer.

With only one more day until Christmas you may still be in the market for a few last minute gifts. If you are like me, the idea of driving through traffic and elbowing through crowds to find gifts is not going to bring you any Christmas cheer. After going to my local Target two days ago I can tell you many of the shelves will be empty of what you are looking for anyway.

Here are twelve ideas for finishing up your shopping without leaving the comfort of home.

• E-certificates: Most websites offer gift certificates emailed directly to your recipient. I like Amazon’s gift cards since they have cute illustrations, and really what doesn’t Amazon sell?
• Subscription services: Send a subscription to for your father in law’s favorite magazine, or a Netflix subscription for the movie lover on your list.
• Restaurant gift certificates: You can call your sister’s favorite restaurant and get them to send her a gift certificate, or go to Restaurant.com for gift cards or a dinner of the month club.
• Flowers or live plants: For the person that has everything, or loves plants get flowers or a live plant delivered today. I personally prefer live plants since they last longer.
• Food: If you have plenty of baking supplies on hand you could make a special recipe. Pies, cookies, and even biscotti would make fantastic last minute gifts. You could make a favorite dish, or a recipe you are known for. Why not make your famous enchiladas in a freezer ready container?
• Crafts: You don’t have to be Martha Stewart to make something crafty. A child’s handprint in a frame, a knitted scarf, or even a poem would all make lovely, personal gifts.
• Photos: Give the gift of a photos to share the memories. Whether it’s gift of a picture of you and the recipient, or a favorite photo of your children. Even a slide show would make a fun gift. You can create a photo gallery on iPhoto or Picasa and share it with your family.
• Make a donation: Make a donation to your giftee’s favorite cause, or one that is near and dear to your heart. Especially good for the person on your list who has everything they could ever need.
• Give the gift of time: Whether it’s a gift to the parents on your list for some babysitting, or a gift to your mom for a weekend spent together, time is one of the most valuable and appreciated gifts.
• Cash: It may be impersonal to some, but it is always appreciated. It might make a perfect gift for someone who is struggling financially (though this depends on circumstance)
• Investments: Adding to a 529 plan for a child, giving the gift of stocks, or bonds are some great choices for helping a friend or family member build wealth.
• Regift: It may be controversial, but why keep that cat statue your neighbor gave you when you know Great Aunt Edna would love to have it for cat collection.

Consider sending gifts late if you have to. It’s better to send something after the hubbub of Christmas is over anyhow. I always love that extra unexpected package. Do you have any last minute gifts on your list?

Happy Holidays!

Photo credit: http://www.flickr.com/photos/mysza/ / CC BY 2.0

The original version of this article, 12 Last Minute Gift Ideas, is copyrighted by Consumerism Commentary.

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There are a lot of things in the world I know nothing about. Not knowing about something can be very expensive. Allow me to illustrate…

The brake light came on in our car a couple of weeks ago, and we started looking around at different places we could have them checked. We were a bit confused, because just a month earlier, when the car had been in for a yearly inspection, the tech told us that the brakes “passed with flying colors”. The funny thing is, two months earlier a different tech at the same shop had told us to change them soon, since we only had about 10% left on the pad.

Needless to say, I was perplexed. It just so happens that the brakes on our car are one of the things I knew nothing about.

After calling around and comparing prices, we found out that we were looking at about $150 more than we were expecting. I was hesitantly thinking about taking it to one shop when I decided to call my father-in-law. He’s very handy and knows quite a bit about cars. He offered to take a look at the car when we were up at his house over the weekend.

He pulled off the tires, and was able not only to teach me how to tell if the brakes were wearing out, but how to change and care for them. I also learned about rotating tires and how to tell if the shop really rotated them like they told us they did (and they didn’t!)

This simple trip saved us about $200 this weekend, and will save us much more in the future. I feel comfortable changing the brakes on the car, and I also know quite a bit more about how it works and how to maintain it.

There are some of you who are reading this right now who could probably change the brakes on your car in your sleep. But what happens when your computer needs to be repaired, or your daughter needs braces, or you need to find a yoga class on Monday nights?

Far too often we trust what we’re told by companies and what we see in advertisements and think it’s our only option. Just like I learned to be proactive about my finances, I learned that I can do more than just blindly take the car to the shop down the road and get ripped off. It’s a simple and obvious lesson, but one that I think more people could learn from.

We each have a built-in network of advisors – family, friends, co-workers – who are experts in areas we are not. Their insights and advice can not only help us learn, but save money as well. Learning to turn to these people is something that isn’t always natural, but can be very beneficial. These people are often more than willing to share their advice and knowledge, and will do so because they want to help you.

What are some of the ways you use the people around you to learn and save money?

The original version of this article, Learning and Saving, is copyrighted by Consumerism Commentary.

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The recession has forced almost everyone to make a change in one way or another. For one Atlanta couple, their wedding has turned into more than they had anticipated.

Vanessa Caldwell and Cole Parker are getting married on November 11, and needed a way to cover their expenses. They decided to turn to their friends and family for help.

Caldwell started a website, soliciting donations to help pay for the event. The couple’s wedding announcement even has a Paypal link to allow guests to donate directly. So far, the couple has received enough donations to cover $750 of their $2,000 budget.

The couple also has deals with the florist and the photographer, allowing them to advertise at the wedding, in exchange for no charge for the pictures and flowers.

The idea was born out of necessity. As business owners, the couple puts every spare penny they have into growing their small business, leaving them without much in the way of spending money. The recession forced them to cut back, and they needed help paying for everything.

Some who visit the couple’s website or are aware of their plan aren’t sure how to react. Some view the request for donations as an ‘admission’ price charged to guests, or as just plain tacky. Others see no problem with lending a helping hand.

Part of me sees this as an interesting idea, but I would feel obligated to pay if I was planning on attending. I wouldn’t want to show up and eat the food and listen to the music if they’d asked for help and I hadn’t paid. I understand wanting to give some ‘direction’ to those who might give you a gift, but isn’t that what a wedding registry is for?

Is asking guests for financial help a one-time thing, or will we see more of this in the future? How would you feel if a friend or family asked for a donation instead of a gift?

Source: PayPal Wedding Invite Irks Some Guests

The original version of this article, Wedding Donations, Smart or Tacky?, is copyrighted by Consumerism Commentary.

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If you planted your garden in mid-to late April like we did, you’ve already started to see the beginnings of your harvest. Our green onions have been out of control for a little while now, and our radishes are starting to get nice and big as well. We’re just now getting great peas and beans, and out tomatoes are right around the corner. It looks like it’s going to be a good year for the garden (if we can keep the birds away).

One of the best things about having your own garden is that you can walk right out into your backyard and pick some fresh produce and eat it right there, on the spot. No running to the grocery store or the farmer’s market to stand in line, no $4 for a pound of strawberries, and no pesticides or other “unknowns” to wash off.

It’s never too early to start thinking about how you’re going to handle the extra harvest from your garden. Taking a little time to prepare can help ensure that your hard work and tasty vegetables don’t go to waste. We’re going to have way more food than we can handle all at once, and so we’ve been looking into different ways to preserve our ‘leftover’ vegetables.

Getting a basic idea of what you are going to need equipment-wise can help you prepare. Based on materials you might already have the cost will be unique for each individual situation, but I’ve estimated the following costs out on the assumption that you’re starting from scratch (like we are).

Freezing

We are definitely going to try this method. It’s one of the easiest ways to store vegetables, and if you blanch (‘flash boil’) the vegetables before you freeze them they will retain their nutrients much better and keep much longer. We’ll be able to freeze some of just about everything, expect our spinach.

Cost: Super Cheap
Needs: A box of Freezer Ziplock Bags (wish we had some extra freezer space, but the freezer above our fridge will have to do.)

Pickling

I’d like to try this one out, but I don’t know if our cucumber plants are going to survive the constant attacks from the birds. We don’t have any beets, and I’m not sure if you can pickle tomatoes or peppers. Pickling looks to be a bit more difficult to master than other methods – the process itself is easy but apparently takes ‘just the right touch’ to be successful.

Cost: Moderate
Needs: Canning salt, pressure/water bath canner, vinegar, jars, lids, rings, spices, brine

Jams/Jellies

Most people think of fruits when you mention preserves, but vegetables are catching on as well. I recently had a great jalapeno jelly that greatly complimented my bagel with cheese. We didn’t end up growing strawberries, so we’ll probably skip the ‘preserving’ this year

You can do freezer jam as well, which is very common. It’s quicker, cheaper, yummier, and doesn’t have as many preservatives.

Cost: Moderate (cheap after you have a canner)
Needs: Water Bath canner or pressure canner, pectin, jars, lids, rings, freezer containers (if you decide to do freezer jam)

Canning

There are two canning methods: pressure canning and water bath canning. I still have memories of our entire kitchen table being covered with jars full of tomatoes and peaches that we enjoyed all winter long. We’ve got seven tomato plants and a lot of carrots, peas and beans that will be canned if they aren’t frozen.

If you are persistent you can pick up canning jars at Salvation Army, Savers or Goodwill-type places.

Cost: Moderate (need lots of cans, lids and rings and a canner)
Needs: cans, lids, rings, pressure or water bath canner

Drying

A food dehydrator is a necessity here, and since we don’t have one we will not be drying this year.

Cost: High
Needs: Food Dehydrator, storage bags or containers

Juices

If you’re a fan of V8 you can use a juicer or a blender to create your own tasty beverages. Tomatoes, peppers, carrots and radishes would all add up to be a tasty treat. Adding a bit of lemon juice can help equalize the tastes. SD Gal is a big fan of tomatoes and I’m sure some of this juice will find its way into our fridge. This could be frozen as well.

You can also do fruit juices. My mother used to make an excellent grape juice by putting the grapes straight into the jar. I don’t remember exactly what else she did, but boy was it good!

Cost: Moderate
Needs: cans, lids, rings, pressure or water bath canner

Storing

Some foods (like potatoes and radishes) can be easily stored in a cool, dry area.

Cost: Free (unless you buy boxes or bags)
Needs: Boxes or bags

You don’t have to have a green thumb to cash in on the benefits of canning, preserving and storing food. If you are unable to have your own garden, another option is to build a stockpile of produce from local growers. Stop by local orchards and farms, farmer’s markets, and roadside fruit /vegetable stands and inquire about special deals at each. Take your spoils home, preserve the in whichever method you prefer, and enjoy nutritious produce all winter long!

For a very full rundown on the exact specifics of each of these preservation methods, check out PickYourOwn.org.

The original version of this article, Preserving the Harvest, is copyrighted by Consumerism Commentary.

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My goal was never to have all the money I could get my hands on.

On the other hand, I’ve never solidified my financial goals. Up to now, it’s mostly been about what I don’t want, rather than what I do:

• I don’t want more rooms in my house than I can use
• I don’t want to have to hire a security firm
• I don’t want to go to fundraising dinners for politicians
• I don’t want people around me who only like me for the luxury I share with them
• I never want to do any “shmoozing”

It’s things like that which I’ve long associated with wealthy people. Maybe these are stereotypes that only happen in fiction, I couldn’t say. More realistically, I’ve only had one (not)goal for many years: I don’t want to be in danger of being homeless. That’s not a productive goal. I think it’s time I change my thinking.

Flexo has written about different types of goal-setting in the past, which helped me start germinating ideas subconsciously over the past few months. Here’s what I’ve got so far for my long-term goals:

• I want moderate luxury: a perfect example of this is our living room TV. I bought a used HD projector ($900) and a cheap 92” screen for $75. I hung the screen myself for less than $10, and we’ve had an enormous gorgeous high-def TV for years. I don’t need a separate media room or surround sound. What we’ve got is great.
• I want to eat breakfast outside: I want enough time in the morning to be able to make myself some eggs and bacon, coffee or tea, and take it to the backyard to enjoy. Usually this is only possible on vacation. I think in order to do this every day, I’d need to work from home.
• I want my evenings and weekends to myself: I know too many people who think about, and perform, work during non-work hours. I’ve always felt this is indicative of a management flaw. The people at my current business tell me I work faster than anybody else, so that may also have something to do with it.
• I want lots of open space: I’ve always lived in metropolitan areas, so I probably don’t have it in me to switch instantly to farming, but I like to think that by the time work slows down for us, we’ll at least have a kind of subsistence farm situation.

For many months, excluding one huge setback last fall, my only goal has been “get rid of the credit card debt”. I’m still going to do this, but a recent salary cut decided for me that my plan of paying off $1,000 a month won’t work anymore. After adjusting our budget, instead of $532 leftover per pay period, I have about $228. So, new plan: save the leftover salary money. It’ll either grow in a bank account, or go toward home improvements (including my wife’s increasingly impressive garden), or upcoming vacations. You know, things that improve the quality of life. Things that I’ve been ignoring for far too long.

And I’ll take half of whatever I earn from my freelance work to gradually pay down the pesky credit card. It’ll go a lot more slowly, but hopefully that will encourage me to do more, better work in my spare time. That will hopefully lead to a situation where I can work from home, in a place with lots of open space, and a backyard I can eat breakfast in.

The original version of this article, Smithee’s New Long-Term Goals, is copyrighted by Consumerism Commentary.

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The author of Free Money Finance pointed out a story highlighting how the recession is affecting the health of pets. He or she also linked to a helpful chart of estimated costs for owning various kinds of pets.

Personally, my wife and I don’t even include pet care in our budget, because our affection for them goes beyond monetary concerns. I understand and sympathize with people who feel like they have to cut back their spending in multiple areas, and their pets’ overall health might have to be one of them. And I don’t imagine that this is an easy decision for anyone, but I would beg them to reconsider.

I should point out that the following doesn’t constitute what’s normally considered “financial advice.” These are just the thoughts I had when considering what to do in a worst-case scenario when my pet has a serious illness, and I don’t have the funds for it.

These are living beings, worthy of your care. And because you decided to take them in, they are dependent on you. If a pet gets ill, chances are it won’t get better by itself. Instead of “wait and see”, there are other options. In no particular order:

1). Use a Credit Card

My primary financial goal is to get rid of the credit card debt that I started in 1997 (this should drop to about $3,000 by the end of the week), but if it came down to a) sick pets or b) increased credit card debt, I would always pick B without hesitation. Your financial situation, though currently ebbing, will likely begin to flow again in the future. It’s not a fun choice, but some things are more important than interest payments.

2). Borrow Money from Friends or Family

You may be just barely getting by, assuming you’ve decided to let your pets’ health take care of itself, and you may want to avoid asking for help. But there’s a good chance that a friend or family member may be a real softie when it comes to pets, and will help you pay those bills, even if helping you pay other bills might’ve been something they’d avoid.

3). Plan Ahead with Pet Insurance

Lots of companies offer health insurance for your pets, and while I can’t currently recommend one in particular, it’s worth checking out.

4). Payday Loans

Payday loans are evil, period. But I think they’re slightly less evil than allowing your pet’s health to decline. If your pet is having an emergency health issue, I think this option is still on the table.

The original version of this article, My Pets’ Worth, is copyrighted by Consumerism Commentary.

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If you’re a member of an investment club and are in a typical family unit, ABC wants you to apply to be on the reality series, “Wife Swap.” If you’re selected, your family will receive a “financial honorarium” for appearing on the show, and if you know of someone else who would be a good choice for the show, ABC will pay a $1,000 referral fee to you if they are selected.

Here are some of the details.

Are you a mom passionate about your investments? Are you an active member of an investment club? Trying to keep it together in today’s hard economy? Then I want to talk to you!

The premise of Wife Swap is that one parent from each household swaps places for a week to experience how another family lives. It is an incredible family experience and opportunity to both learn and teach different family values. Potential families can live anywhere in the continental United States, but we ask that families applying for the show consist of two parents and have at least one child, age 7 -17, living at home.

To submit for the show please email a family photo and description to gaby.wifeswap (at) gmail (dot) com. Here is more general information about “Wife Swap.”

The original version of this article, “Wife Swap” Looking for Investment Club Members, is copyrighted by Consumerism Commentary.

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Money Magazine released the results of the publication’s survey of the towns with the highest median household income. New Canaan, Connecticut tops the list with a median income of $231,138.

Considering a move to help your income go farther? Don’t choose one of these locales. Considering a move to be closer to culture, leisure, and advanced education without living in a city? These towns might be for you. Here are the top ten.

1. New Canaan, CT, $231,138. “New York City’s elite once chose New Canaan as a vacation town, but they liked it so much, they decided to stay there year-round and turn it into one of the nation’s wealthiest residential communities.”

2. Darien, CT, $218,130. “Darien was once a vacation community for New York City’s upper crust who decided to lay down year-round roots.”

3. Lake Forest, IL, $212,122. “With a town plan heavily influenced by English gardens, Lake Forest is home to mansions and vast estates seated on the bluffs overlooking Lake Michigan.”

4. Saratoga, CA, $196,420. “The [Paul Masson] Winery is still there, but so are the best and brightest of Silicon Valley, whose fortunes have spilled over into this upscale bedroom community.”

5. Westport, CT, $193,540. “Once an artist’s colony, Westport is now better known as an affluent bedroom community on Long Island Sound that’s held on to its cultural roots.”

6. Los Altos, CA, $189,839. “The village, in San Francisco’s Bay Area, has become a haven for techland’s top earners. Still, the birthplace of Hewlett-Packard prides itself on maintaining a semi-rural feel.”

7. Potomac, MD, $183,258. “[M]uch of Potomac has been turned over to the Washington, D.C., area’s wealthiest residents… If you are of an equestrian bent, the area still offers a number of riding schools, breeders and stables.”

8. McLean, VA, $180,103. “If you want your neighbors to be rich AND powerful, move to McLean. Vice President Dick Cheney is said to be building a home there for when he leaves the West Wing… [B]e careful who’s listening: The CIA is headquartered in the town’s Langley area.”

9. Wellesley, MA, $172,900. “The Boston suburb is home to the school of the same name, which is consistently rated as one of the nation’s top liberal arts colleges. Notable alumni include Senator Hillary Clinton…”

10. University Park, TX, $170,150. “University Park started as a group of houses surrounding Southern Methodist University almost 100 years ago. Since then it’s been swallowed up by Dallas’ urban sprawl, but the area still likes to maintain its identity.”

Other towns in the top 25 include Bethesda, MD, Greenwich, CT, Ridgewood, NJ, Los Gatos, CA, Deerfield, IL, and Garden City, NY.

25 top-earning towns, Money Magazine, June 14, 2008

The original version of this article, Earn the Most in New Canaan, Connecticut, is copyrighted by Consumerism Commentary.

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I came across this today:

Whatever the reason, experts say that at our core, there’s one reason we find wealthy men attractive: instinct. Women, research shows, rank the ability to provide as the most important quality when selecting a mate. Men, not surprisingly, prize a woman’s looks and youthfulness over her other qualities, because those are indicators of fecundity. It’s all about finding the best person to breed with.

As it turns out, we’re all just slaves to our prehistoric urges, even in an era when none of those millenniums-old rules would seem to apply…

A 2006 study done through the University of Chicago shows that men who post online profiles indicating income of $250,000 a year generate significantly more contacts (up to 151% more) than those who make under $50,000…

The article continues to say that the relationships formed between wealthy men and younger, beautiful women start off great but aren’t made for long-term relationships. So here are a few questions. Do you believe money is a turn-on? Can long-term relationships be formed with a disparity in wealth?

Is Money an Aphrodisiac?, Kris Frieswick, MSN Money, July 4, 2008

The original version of this article, Your Opinion: Do Women Find Wealthy Men Attractive?, is copyrighted by Consumerism Commentary.

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Throughout the summer, as they have been doing for the past 43 years, the greatest orchestra in the world is offering free concerts to the public. Last night, I saw the first of the “Concerts in the Parks” series in Central Park, Manhattan, New York City, presented by the New York Philharmonic. The weather was perfect for an outdoor concert.

The “Concerts in the Parks” series consists of eight dates throughout the summer, in venues across New York City and New Jersey, in which the New York Philharmonic presents at least two different programs. Last night, the program included Shostakovich’s Festive Overture, Tchaikovsky’s 1812 Overture, three Sousa marches, and a surprise encore of Jimi Hendrix’s Purple Haze. The concert was followed by a fireworks presentation.

If you’re looking for something free to do this summer — my only expenses were the $13 round trip New Jersey Transit train ticket to Manhattan from my office, $4 for the subway, and $10 for food and drink — consider taking a few friends or your family and attending one of these concerts. Bring a blanket to sit on and have a picnic before the concert begins, socialize with your friends and meet new people, enjoy the amazing music, and stay for the fireworks (at some of the venues).

By the way, if you have young children who are not quite ready to sit still for hours, this is a great way to expose them to excellent live music outside of the concert hall.

Here is the Philharmonic’s schedule for remaining free concerts this summer:

July 8: Richmond County Bank Ballpark, Staten Island
July 9: PNC Bank Arts Center, Holmdel, New Jersey (I will be here)
July 10: Cunningham Park, Queens
July 11: Van Cortlandt Park, Bronx
July 12: Heckscher State Park, East Islip, Long Island
July 14: Prospect Park, Brooklyn
July 15: Central Park, Manhattan

If you make it to the free concert on July 9, look for me. As I usually do for the New Jersey summer concert each year, I’ll be volunteering/working for the Philharmonic before the concert begins.

New York Philharmonic Concerts in the Parks

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According to a 2004 survey, 21 percent of people born in 1964 or later expect to inherit money from family some time in the future. Many expecting recipients may be in for a surprise, however. A recent article by Ron Lieber at the New York Times identifies eight reasons why inheritances, perhaps not those in rich families but in well-off middle class families, may be diminishing over the next generation or two.

1. People who make it to 65 will live a lot longer. More time alive requires more expenses, and in many cases this is significant. The cost of care for elderly seems to grow exponentially with increasing age.

Try to guess how long your relatives will live using this life expectancy calculator.

2. Social Security and Medicare will probably change. It’s a safe bet that the goverment will be cutting back on the services offered by these programs as more people require the services and fewer people are paying the associated taxes. Therefore, more expenses will need to be covered by your relatives’ nest eggs, otherwise known as your potential inheritance.

3. Fewer people have pensions, so they’re more wedded to the markets. With a nest egg invested in the market for long term growth, the funds are subject to the swings of the stock market. A down market at the wrong time could reduce your inheritance by ten percent. Say goodbye to your summer home.

Also, a down market during any time during your relatives’ retirement means that more of their principal will go towards paying their own expenses.

4. Out-of-pocket health care costs for retirees may soon hit seven figures a couple. A 55-year-old couple with above average medical costs can be expected to need more than $1,000,000 in capital just to finance health case costs for the rest of their lives.

5. Divorced individuals may pass on less money. Leaving an inheritance to children is often a joint endeavor. Without a connection between husband and wife, one might not be willing to pass wealth onto kids seen as the other’s.

The divorce rate in the United States has been declining recently, but the rate of co-habitation (opposed to marriage) is increasing. The supposed colatile nature of co-habitation may have the same financial impact to heirs as divorce does.

6. It’s getting easier to drain a home’s equity. The reverse mortgage is an increasingly popular way to turn one of your largest assets in retirement into an income stream. A cash-strapped retirees can find himself selling his house back to a bank, and when the house is sold, the proceeds go to the bank rather than to the family.

7. Life insurance may not offer much help. Many people have the opportunity to sell life insurance policies to investors. When someone does so, the benefits normally received by the insured become the property of the investor, leaving less to pass to the next generation.

8. The transfer of wealth will increasingly happen while the older generations are still alive. Rom points out that grandparents are increasingly helping grandchildren with education expenses, as the cost of a college degree continues to skyrocket. Whether these types of transfers are intended to reduce estate tax liability or simply help their relatives in the best means possible, it reduces the size of the estate that would theoretically be available for inheritance.

All of the above trends considered, I think it’s safer for most of us to assume there is no inheritance on the way. With this in mind, without the thought of being bailed out in the future, it can force some of us to be more mindful about spending today.

8 Reasons You Should Not Expect an Inheritance, Ron Lieber, New York Times, June 21, 2008.

The original version of this article, Are You Expecting an Inheritance?, is copyrighted by Consumerism Commentary.

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I’ve never been squeamish talking about finances with friends and acquaintances (partly, I suspect, because of my lack of an internal dialog filter), but I have learned over time that not everybody else is as comfortable as I am, so I try not to use too many specifics when having financial discussions.

However, I think personal finance is one area where your friends can provide a lot of insight and assistance, in essence, be particularly friendly. An interesting thing happened on a Web forum where I hang out. The active population is in roughly the same age range, but we have varying demographic backgrounds. A thread came up about discussing your income and after a few issue-skirting posts to the thread, someone actually came out and described their financial situation in a nutshell, numbers intact. Then the floodgates opened and everybody else added their own.

This is by no means scientific, but I gleaned a few data points from the discussion:

• It’s possible to earn more than me and still be unhappy with your income
• Alternately, it’s possible to earn significantly less, and still be in better financial shape than I am
• Ambition and perception can lead to a higher salary, regardless of what I might think a person’s job is “worth”
• Compared to the vast majority of residents of Earth, we are filthy stinking rich
• A lot of us have no retirement plan, since we spent most of our 20s simply keeping ourselves housed and fed
• People with college degrees get paid more, even if the degree isn’t applicable to the job in question
• To earn what I am earning, I should probably be working a lot harder
• Salary isn’t everything

Have you had similar conversations with friends of yours? What did you learn?

The original version of this article, What We Learned by Being Open with Our Friends, is copyrighted by Consumerism Commentary.

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How soon into a relationship should you disclose your financial condition, if at all? A wealthy woman wrote a letter to the editor of Money Magazine recently to explain that she does not want to let her new boyfriend, a relationship with the potential to get serious, that she has money. She is wondering whether it’s ethical to keep this information from her boyfriend or whether there’s a point at which she should let him know of her wealth.

The magazine’s editors did a good job of answering the question, and I agree with their conclusions. If a relationship becomes serious and marriage is a possibility, there should be no secrets. This particular woman was hurt by a former boyfriend who “used her for her money” once he discovered that it was possible to do so. That should be an immediate signal that this was not the right guy for her, but it should not scare anyone away from being truthful about money in general. You do have to make a judgment call to determine the right time for approaching the subject. It’s probably not appropriate if you’re on the first few dates, but if you’re starting to pick out rings or talk about living together, I don’t see how these decisions can be made without full financial disclosure.

Commenters who left their opinions below the Money Magazine article are divided. Some have very strong opinions in favor of not telling the boyfriend until the last possible minute. Some think they should discuss money as soon as they decide that the relationship is “serious.” But what is “serious?”

My questions are more specific: Should financial disclosure happen only after a couple decides to get married? Would this prevent money and the attitudes about wealth from affecting relationship decisions, or would it create the possibility for unhealthy surprises later? Should financial information, particularly if that information sets you apart from the average joe or jane, remain protected for as long as possible?

My girlfriend, A., reads Consumerism Commentary, so she can find details about almost every penny I earn and spend. I do have a special account set aside which I call “The A. Fund,” included in my savings totals. In order to allow the occasional surprise, I don’t provide her with details about that money. However, if she looks at my monthly reports, she could get a good idea of what I can and cannot afford in general. Not all relationships include someone who posts their finances in public, though.

What would you do or what do you do? Feel free to post a comment anonymously if you’re worried your significant other may read.

Image source: prozacblues
[Money Magazine: I don’t want to tell my boyfriend I’m loaded]

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We’ve talked about tax deductions related to your reception site, but there are a few other nice opportunities for wedding-related deductions that shouldn’t be missed, both for during and after your wedding.

The I Do Foundation has a number of creative ways to incorporate giving into the wedding itself, which you can do through them or replicate yourself. I will be doing a number of these for my own wedding next year.

• Give on guests’ behalf. Give to your favorite charity on behalf of each guest, then provide a favor related to that gift, whether a printed card or something more specific. Then, deduct the full amount as a charitable donation. We’re thinking of donating to our favorite avian charity, then attaching announcements printed on plantable hearts filled with seeds (we plan to make these ourselves) to these cute dove bottle openers. (We’re trying to find a source for the doves without the packaging, however.) The favors themselves, of course, are not deductible, but they make a nice presentation. The Knot has some more stories of fun ways couples incorporated tax-deductible giving into their weddings.
• Build a registry of charities. Create a registry of the charities you wish to support, then let guests make their own selections when giving. JustGive and Changing the Present are two more great charitable gift registry sites which makes it easy to set up a registry of the organizations you want to support. You can add explanations for why these are meaningful to you as a couple and how they support your shared beliefs. Then all of your guests get to claim a deduction and they’ll have you to thank when filing their 1040s.

And this one’s not a deduction, but I’m listing it anyway because it’s a good idea: have your gift registry give back. You can create a gift registry with one of the I Do Foundation’s partner stores and have up to 10% of the purchases given to a charity of your choice.

Next time, I’ll share some donations you can write off after the wedding festivities.

The original version of this article, Tax-Deductible Weddings, Part 2, is copyrighted by Consumerism Commentary.

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We’re entering the peak wedding season, it seems.

Ever since I got engaged earlier this year, I’ve been bombarded by sales pitches from every angle. They’re certainly tricky. They come disguised in several colors of tulle, bearing elegantly inscribed messages to remind me that I only live once and want my special day to be perfect.

Perfect, of course, translates to premium, as in every upgrade on the already mile-high price list. If you’re a frugal sort, it’s almost enough to make you fall out of love with the idea completely.

For my fiance and myself, our special day will only be perfect if we can have all our family and friends join us without incurring additional debt. The perfect wedding should be the start of our perfect life together, where we can actually afford our bills and monthly expenses. So I’ve been searching relentlessly for information to plan an affordable event to remember which still reflects our beliefs and way of life as ethical consumers.

Luckily, my search has revealed that there’s a great way to save on money while still supporting causes we believe in: finding tax-deductible wedding expenses.

The Venue
I’ve learned that the reception is typically the most costly part of the wedding, comprising about half of the total cost, according to theknot.com. This estimate includes the cost of the venue, catering food and service, alcohol and beverages, wedding cake and parking.

If you choose to have your reception at a site owned by an approved nonprofit organization, your site fees may be tax-deductible, as the cost can be considered a donation to support the upkeep of the facility. This applies to a number of historic landmarks and homes, museums, even nature centers.

I’ll share a few local spots I discovered:

Prallsville Mill, a rustic, historic mill in Stockton, NJ, holds up to 150 guests.
Tax-Deductible Facility Fee: $1,850

Honey Hollow Barn, the nature center for the Bucks County Audubon Society, is a lovely stone barn with exposed beams in desirable New Hope, PA and holds up to 75 guests.
Tax-Deductible Facility Fee: $2,500 for a Saturday wedding

Things to Know
You must obtain a statement from the nonprofit organization which states the amount of your contribution. Goods and services recieved must be deducted from this, if applicable.

For church rentals, although only your accountant can tell you about any other applicable rentals, any amount beyond what is considered to be the fair market value of the rental is tax-deductible. You may be able to deduct gifts paid to clergy as well.

In order to claim these deductions, you will need to itemize them using Schedule A.

Know of any more great, tax-deductible spots for a wedding reception? Post them in the comments!

My next entry will feature more tax-deductible wedding savings ideas.

Image Credit: babasteve

The original version of this article, Tax-Deductible Weddings, Part 1, is copyrighted by Consumerism Commentary.

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This is a question mainly for readers in a relationship in which finances are mostly combined or you rely on one another for income and make spending decisions together. I am wondering how much you can spend — whether as a percentage of a total budget or a hard dollar amount — without discussing the details with your significant other. Do you hide any spending from your spouse or partner? (Don’t worry, you can answer anonymously.)

Perhaps you each knowingly keep some separate funds to surprise one another, but I’m more concerned with the little things that may go unnoticed. Can this type of deception be harmful? If so, at what limit would it hurt you or your partner?

Also, do you have or would you consider having a secret bank account? If so, what is it used for?

The original version of this article, Question for Discussion: How Much Can You Spend Without Telling?, is copyrighted by Consumerism Commentary.

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Ginger is a fashionista in her late 20s — a wife and graduate student striving to have it all. She wrote this article for Consumerism Commentary, but Ginger also publishes the blog Girls Just Wanna Have Funds, and you can subscribe to the blog’s RSS feed here.

Let me preface this by stating that I am not suggesting that women marry solely for money, I am after all a believer in love and commitment as a solid foundation for marriage. However, I am suggesting that women who marry partners that are financially savvy, motivated by money and have aligned views about their attitudes to money, are indeed smarter than their counterparts who don’t when choosing a life partner. I will detail the benefits of choosing a partner that has a solid financial plan in place and uses money as a tool and not a crutch.

Financially savvy

Women who choose financially savvy partners fare better than their counterparts who don’t. Why? These women know that in order to have a marriage built to last that finances play a huge role in the viability of the marriage. I know it sounds like we’re discussing a corporate merger but bear with me; after all, marriage in some respects is like a business.

1969 Inc., said it best when asked for her insights to marriage,

It’s like running a corporation. A business venture. You have to go into it knowing that it could fail or it could succeed beyond your wildest dreams and make you rich… If the employees don’t share the vision, believe in the vision and work together, the endeavor will fail. Some businesses will get rich. Some will barely make ends meet. Some will never make a dime. The money does not measure success. The sense of accomplishment will come from the daily struggle… the love of what you do, working together day in and day out.

The reality is that personal finance issues are the leading cause of divorce and in order to live happily ever after, you must be on the same page as far as your finances are concerned. No, if, ands or buts about it. Capisce?

So what makes these women smarter?

Aligned financial values

When smart women meet a partner, they aren’t wooed by good looks and the smooth talk, after all those come a dime a dozen. These women are looking at how their potential partners spend money. Does he have an emergency fund? Is he current on their monthly bills such as the car payment and rent/mortgage? Does he spend more than he earns? They’re listening keenly to understand how their potential mates relate to money. Is it a tool? Is it a crutch? They know the difference and conduct business accordingly. Should the potential mate fall into the category of the above mentioned then it’s time to say good-bye. After all, who wants a man who isn’t interested in learning how to manage his money effectively? They are in it for the long haul, not a few cheap dates.

Motivated by money to create the life they want

Smart women are up to date on the latest issues in personal finance. They understand rate chasing, investing for the long haul and understand that while they may have substantial savings, practice and embrace frugality. They look for similar if not the same qualities in their potential mates. Smart women want to be able to relate not only on a romantic level, but also on issues regarding personal finance.

A man with a plan

Who wants a man with no financial plan in place? I certainly don’t. Where does he see himself in 2 years? 5 years? 10 years? Is he thinking long or short term? That answer will determine the course of the relationship. Ideally he should be able to think past next month’s car payment and project how much he will have in his savings account by year’s end. This an expectation for smart women, not a hope or a dream, but something they demand and require in a potential mate.

Take a few minutes to let it all sink in. Gone are the days when gold diggers were secretly envied because they were able to go for the gusto and stifle high pitched screams during musty sex with a shriveled up oil tycoon. Move over and make way for women who are in control of their financial destinies and not afraid to say it. They are armed with a positive net worth and not afraid to flaunt it.

Are you a smart woman?

If you liked this article, read more from Ginger at Girls Just Wanna Have Funds.

The original version of this article, Smart Women Marry for Money, and Here’s Why, is copyrighted by Consumerism Commentary.

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It’s important to impart a financial education to younger generations, just like the Rogersons who are teaching their children about investing. When you invest, you are relying on other companies before you can make any money. The companies in which you invest must perform well and brokerages must stand between those companies, their profits, and you. This is likely one of the reasons that entrepreneurship — finding ways to grow a business from the inside — is a lesson some parents would like to impress upon their kids.

This is the case with the Becks, another family profiled in a recent New York Times article. Ted Beck is the president of the National Endowment for Financial Education and his wife is a former banker, so it’s likely that he has a good handle on how to provide children with valuable lessons about money. His method involves garage sales. Mr. Beck allows his children to plan garage sales, from inventory to pricing. By working together, the kids have learned about themselves and about effective teamwork.

“What really struck us was that the kids knew each other’s strengths better than we did,” he said. “They split the $100 that they earned, but they agreed not to split it equally because Katherine had done the most.” Mr. Beck was quick to add that projects like this one wouldn’t necessarily interest all children equally. While his children all participated and cooperated well, he said, only Katherine showed real interest in business. She is now majoring in marketing in college.

As long as entrepreneurship isn’t being forced upon the children, I’m happy with the idea. The article mentions that the projects don’t interest all the children equally; I would hope that if one is not interested, they would be encouraged to find an activity for which they are more suited. Business lessons are fine, but it’s not for everyone. Matters of managing money are more important, in my opinion. Also, children are not adults and shouldn’t be expected to consume their lives with more adult-like activities. Every person only has one chance to be 16, and an upper-middle-class teenager should appreciate that he or she doesn’t have to work to support his or her family.

There will always be time for work later. No one on their death bed at the age of 90 has ever said, “I wish I worked more when I was a teenager.”

photo: colros

The original version of this article, Teaching Children Practical Money Lessons: Entrepreneurship, is copyrighted by Consumerism Commentary.

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I have to applaud Kerri and Mike Miller for one reason. They were willing to share their financial problems with the readers of Money Magazine and CNN Money, despite the level of embarassment that kind of publicity might create.

While the article spotlighting the couple did not say explicitly whether the Millers are spending more than they earn, their level of debt is climbing higher each month. It’s clear they’d like to cut back their expenses, a big portion of which is caused by the desires of their children.

Thanks to bombardment of commercials and peer pressure, kids have strong desires for nice clothing and cool toys. It’s not really these desires that cause the spending, it’s the fulfillment of those wishes. How bad is it?

There’s 12-year-old Kate, a seventh-grader who covets a pair of $160 boots, prefers clothes from American Eagle rather than Target and recently got a $300 cell phone.

There’s nine-year-old Landon, who has a voracious appetite for video games. And their youngest, four-year-old Claire, will soon start taking ski lessons (cost: $224, not including equipment).

All three kids attend summer camps that run about $60 a day for each child. And then there’s the cost of babysitting ($200 a month), preschool ($4,000 a year) and braces ($3,000).

All the items mentioned above are not life necessities. These kids could easily survive without these luxuries, and at the very least, there are less expensive choices for everything. The only things listed above that I would disagree with in almost all circumstances are the ski lessons for the four-year-old.

The article contains a number of suggestions for the Millers, and presumably for the millions of families who find it hard to make ends meet while fulfilling their children’s desires. Start with saying no to the kids. When your son or daughter expresses a wish for a $300 cell phone, it should be an obvious candidate for an inflexible negative response. There is simply no reason for it — unless the kid is running a business where he needs instant access to clients through voice and email.

* Examine your motives. Are you throwing a blow-out birthday party because it’s what the kid wants or because you want to show off to the neighbors and the parents of the kid’s friends?

* Stop the whining. Saying no is difficult, but the kids may take rejection better if they are given an inside look at the household financial operations. If you can help them get a sense of your inflexible expenses, perhaps they can sympathize.

* Teach money management. Give the kids control of their budget, so they can learn to make the best financial choices. Let them make mistakes and learn.

* Save on the must-haves. Negotiate wherever possible and don’t immerse a kid with high quality activity equipment until they’ve been participating for several years. Hobbies and interests at a young age are fickle.

* Nip surprises in the bud. Stay on top of your finances to catch things like a stratospheric cell phone bill due to excessive text messages.

Kids will be kids. You won’t be able to control every aspect of your children’s lives. Even with your best protection, they will be exposed to a world of materialism. They should be familiar with this world — it is the world they will live in their entire lives. I don’t believe children should be forced to act too mature for their age, but as they grow older, you should help them be aware of different forces in the world that try to share their thoughts and desires.

Help! Our kids are driving us broke [CNN Money]

The original version of this article, Overspending for the Kids, is copyrighted by Consumerism Commentary.

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Archetypical contributed a great comment to my last entry, Surviving (and Thriving) on $12,000 a Year, with a very different take on Donna Freedman’s story:

I think frugality is great, and there are certainly things we could all do without, but I refuse to glorify this woman who gets praised for leaching off of everyone.

If only we could all get paid alimony because we refuse to get a job or if only we were all comfortable stealing food from starving children via the food bank maybe we could all be as frugal as her. She even mentioned that she would get food stamps if she could. It seems almost miraculous that a system which allows people to misuse it so regularly found a way to at least not shoulder her fake burden on society as well!

This woman is an example, certainly, of how you can try to put a positive spin on the most dispicable of activities.

I had ended up cutting my thoughts on toeing the line between accepting “charity” and sponging off of others out of my last entry since it took the entry in too many directions, but Archetypical’s points are valid and worth addressing separately.

I do feel that it’s fantastic to be able to live on low funds, but not if you’re always taking from the system and not giving back, and not if your activities are costing your friends and family, making them the sponsors of your lifestyle. I can’t speak for Donna Freedman, but the two friends I mentioned manage to toe this line very well. In fact, they’re always giving me things they picked up, “paying it forward” with things they no longer need, and bringing me home-baked goods (a plus-two in my book). If they didn’t have money on hand to contribute their percentage of the dinner costs, they’d make up for it by bringing wine or doing the lion’s share of the work.

It’s a delicate balance, and I do disagree with doing some of the things Donna suggests in her article on a long-term basis. Public services like welfare and the food stamp program are meant to provide short-term assistance to those trying to get back on track. We pay in, then collect only if needed. My assumption was that Freedman would pay society back in the long run for what it gave her, but then, I can’t say that for sure. Things like freecycling, however, I can completely support – it’s a system good for the landfills as well as for us.

When I reread from Archetypical’s perspective, there are certainly some things that cross the line of what I’d be comfortable with. I consider myself an “ethical consumer”, which basically means I believe in spending more to support the things I believe in. I pay extra for green energy, for example, or to buy my vegetables from the local organic farmer instead of the local Wal-Mart, but that’s another topic which deserves its own entry.

It’s challenging to balance that with frugality, but I think there’s certainly a happy medium to be found here. The couple I spoke follow practices much closer to what I believe in, and I’m glad to be able to share their story as a comparison and contrast to Donna’s.

That said, I’d love to know: where’s that line for you? At a certain point, taking advantage of opportunities can become taking advantage of people. Do you know someone you feel is saving himself at the expense of someone else, or toeing that line well? How do you manage to give back?

The original version of this article, Where’s the Line Between Taking and Taking Advantage?, is copyrighted by Consumerism Commentary.

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I really enjoyed Donna Freedman’s recent article, Surviving (and thriving) on $12,000 a year. While it contains some great tips on conscious spending, it’s also tremendously inspirational, making me feel that anything can be possible if you’re willing to have some tradeoffs.

As I read more and more about others’ net worth online, I start to feel like everyone else’s savings are racing ahead of mine. I’ve studied hard, earned my Masters degree, work hard and now earn a nice salary. Still, I suffer from very high “overhead” costs in my life due to commuting, etc., and occasionally I despair, feel like I’m backsliding, like it’s hard to earn enough to ever get ahead even when I’m working as hard as I can fathom.

And then I read about a woman who is living a lean life, but still in some ways a rich life, on $12,084 this year. And still contributing monthly to her charity of choice, and helping out her grown daughter! It sounds unbelieveable. Surely, if that’s her budget, I have plenty of room to keep cutting costs and increasing my own savings. I feel like I’m down to the wire, but case studies like hers make me realize I’m not even close.

What seems to be the critical success factor is that she’s able to rationalize her sacrifices, and assigns a time period to them to make them more bearable:

Make no mistake: I’m poor by choice, because I needed to change my life. I chose to leave my marriage, and I chose to become a student. I can live this way because I know it won’t be forever. I’ll have my degree in two more years, and I’ll go back to work.

She writes about a past filled with jobs stacked atop jobs, trying to balance college amidst very little free time, and enthusiastically announces her new focus:

This year I’m dumping most of the part-time gigs. I’ll still freelance and baby-sit, but very selectively. My new school means tough classes, a long bus commute and lots of reading and studying. More to the point, it’s a great opportunity, and I’d like to take full advantage. So I’m choosing to work less in 2007, focusing instead on getting healthy and getting my education.

That means careful money management and a fair amount of sacrifice. I’m willing to do both.

As I read further, I’m reminded that her tale seems somewhat familiar, and her rationalizations equally so. A conversation comes to mind from several years ago, when two good friends of mine, a couple, were chatting with me about money. They’re serious travel buffs, and have spent nice long spans of time in gorgeous areas across the planet. I love to travel as much as they do, but was lamenting how I’d not been able to do so in ages.

“You just have to sharpen your focus and cut out everything else that diverts you from your goal, ” one of my globe-trotting friends said.

“We have time to travel because we keep our expenses to the bare minimum so we can afford to work less. We know how much we need to make in order to live the way we do, and we question every single purchase in order to get there. We’ve argued over whether to spend 50 cents on a hot dog. There’s nothing we ignore–everything counts, because everything moves us towards or away from our goal.”

One of the duo had just paid off her student loan in full, and moved on to dutifully amass $25,000 in savings. “The two of us can live off that for two years,” she said.

I listened, but was full of mixed feelings. I was glad that they were about to embark on a an extended journey across the world – France, Spain, Morocco, and more exotic locales – but jealous that I’d be spending that time toiling away in a cubicle, far from the sun and the wonders of those cultures. Even more, though, I was inspired, because now I knew that what they had was completely attainable – it just came at the price of certain daily sacrifices.

$12,500 a year to support two people, living right alongside me in a populated area on the East Coast. It certainly wasn’t easy for them. Most of their friends, myself included, were among the 9-to-5 crew, going where and doing what they liked. We’d marvel when they’d come out with us, but share meals, deciding together what to get, share a beverage, even. You could see them tallying the sum in their heads, deciding whether a given purchase was worth it. The first few times, it boggled my mind that they even paid attention to the bill. And yet our decisions so clearly impacted our results, the world tour which was out of reach for me becoming a reality for them.

I’ve learned a great deal from these two friends, and much of it resonates with Freedman’s own mantras:

* It’s not what I have, but how much of it I can keep. As in the article, my friends’ every purchase is a question of necessity – “Is having this worth being without this money, being that much farther from our goal?”

* How can I get it free, or almost free? If they do decide the expense is justified, they are incredibly resourceful in getting the best possible deal. They belong to all the local Freecycle groups and keep an eye out for anything they might need. If a friend can lend or share something, they choose that option over buying the item outright. And all purchases are the result of much careful consideration, never on impulse. I am constantly amazed by what they’ve gotten on sale, and how they’ve achieved economies on expenses I still hardly think to consider. Even when traveling, they carpool or bike everywhere.

* Enough is as good as a feast. Like me, my friends are foodies, and enjoy high-quality and organic foods. Buying on sale, exercising portion control and supplementing these foods with less costly ingredients like rice and pasta have helped them to save, as has buying larger quantities and splitting them with friends. They’re always willing to spend a night in cooking versus dining out, and we’ve had some wonderful evenings enjoying great food and wine together. The more people, the greater the economies of scale.

* Every day is casual Friday! Although they’re frugal with their clothing spending, my friends are never underdressed. Nor are they slaves to fashion or trends. They’re always up for a visit to the secondhand shop or yard sales, and tend to stock up on clothing that way, then save and take good care of what they have, even reworking certain garments on the sewing machine. But the next item Freedman mentions is the key to their success in dress.

* Announce my intentions. As word travels and more people have gotten to know them, my friends have become frequent beneficiaries of clothing, furniture, you name it. There are more worn-once castoffs in my circle of friends than I’d like to admit, which means this couple never suffers from a shortage of clothes. They’ve always got an eye out for opportunity, and often are willing to exchange their work for reduced rent. Sometimes it’s just a matter of asking and searching.

As you might be able to tell from reading this, I’m not yet making as many sacrifices as I could be, but I am gaining a fuller awareness of my spending and how it affects my goals. Whether the ultimate goal is a college degree or a globetrotting lifestyle, daily decisions and motivation can make it possible, even when earning a salary many would consider a pittance.

I am deeply inspired by these individuals’ success in achieving their dreams while still spending on the things they consider important. They help me realize that I don’t necessarily need to wait until I’ve achieved some elusive, grand salary to have the things or life I truly want, that “getting ahead” can result from moving not upward, but inward.

Surviving (and thriving) on $12,000 a year [MSN Money]

The original version of this article, Surviving (and Thriving) on $12,000 a Year, is copyrighted by Consumerism Commentary.

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Looking forward to that new baby smell? It’ll cost you… for years. USA Today has ten tips for “baby-proofing” your finances — the way you might baby-proof a kitchen — so you’ll be in a better position to part with $1 million over the next 18 years.

1. Review health coverage. Some new parents I’ve known have been constantly in and out of the doctor’s office. I hope those visits were all covered.

2. Get rid of credit card debt. You don’t want to still be making your minimum credit card payments when you’re also making diaper payments.

3. Build up an emergency. I don’t know one new parent who has not faced some sort of emergency in the first few years, but the severity of that emergency has varied. Emergency funds are good sense for anyone, with or without child.

4. Revise your budget. USA Today suggests using the calculator at babycenter.com.

5. Update your will and life insurance. This is a good tip for any major life change. You want want to add your newborn into your will and make sure you have enough insurance coverage to take care of the new arrival.

6. Show fiscal restraint. One father I know wanted to buy his new son every fancy gadget, whether for learning or for fun. Don’t go overboard.

7. Weigh the cost of staying at home vs. working. This is a fiery topic deserving of its own article, at minimum. Yes, sometimes there is a financial advantage to one parent staying at home, thus eliminating the need and the cost of day care. It’s a decision in which more than just finances come into play.

8. Open a tax-advantaged workplace spending account. Your employer might offer a healthcare spending account, which will allow you to deduct certain medical expenses for your family directly from your income. That’s also known as paying expenses with “pre-tax money.”

9. Exploit tax breaks. “See whether you qualify for child and dependent care tax credits or an earned-income tax credit. You should also adjust your tax withholding to reflect a dependent child; this will give you a larger paycheck, which will help cover your new baby expenses.”

10. Save for college. When you’re looking down the road, it’s likely that college is going to be an enormous expense, particularly if tuition rates increase at the clip we’ve been used to. Typical financial advice says that parents should not risk their own secure retirement for the college education of their kids. I think there must be a happy medium.

You and Me and Baby Makes $197,700 [USA Today]

The original version of this article, 10 Money Tips for Baby Preparation, is copyrighted by Consumerism Commentary.

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