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Five Conversations Before Moving In Together

This article was written by in Family and Life. 27 comments.

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!

CoupleWhat 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

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A Different Environment for 2012 Goals and Resolutions

This article was written by in Planning. 12 comments.

I’ve exchanged some of the stress and risk in my life for a more comfortable situation.

At the end of October, as some readers have been aware, I relinquished my ownership of Consumerism Commentary. There was an announcement in the Wall Street Journal that I’ll link to below for those who are curious about some of the circumstances. Despite no longer owning this website, I am deeply involved in its operation, particularly from an editorial standpoint, though not limited to just the articles. I still write all the articles published under the names Flexo and Luke Landes and oversee and edit any content by other contributing writers such as Ellen Cooper-Davis.

Very little on Consumerism Commentary has changed or will change from a reader’s perspective due to this shift in ownership. It does change my immediate financial outlook, however.

Although little has changed about the way I work from day to day, I am technically an employee. This arrangement has benefits as well as drawbacks. I have better health insurance coverage than I had with COBRA coverage with my old employer’s plan, and it’s certainly better and much more affordable than I would have had with individual coverage. I don’t need to worry much about the effect of changes in a competitive marketplace on revenue because my pay check is consistent. Theoretically, a large company has the resources to grow this website’s presence larger and more quickly than I might have been able to accomplish on my own, and I can focus on more important things, like writing, without spending much time on other business matters.

On the other hand, I have ceded some of my independence and must now create a new strategy for moving to the next step in my life.

I don’t intend to go into much detail about the change in ownership, a change that has been in development for well over a year, but it is worth mentioning due to its effect on my finances in the future. I’ve used Consumerism Commentary as a way to share the details of my personal finances through monthly reports, goal sharing, and other articles wherein I discuss very personal matters, and I plan for this to continue. If I weren’t to mention this change, it would make it difficult for me to share my goals for the future in context.

I will offer my specific goals and resolutions for the new year soon, as I’ve done in many recent years.

You can read more about this on the official release on the Wall Street Journal, and I’ll have more to share from a personal perspective in the coming months.

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Working From Home Can Benefit You and Your Company

This article was written by in Career and Work. 25 comments.

In my old corporate job, upper-level management stressed the importance of work/life balance and flexible working arrangements. The idea of work/life balance stems from the idea that most corporate employees recognize that working in a cubicle is not all there is to life, and despite pressure from supervisors and bosses, family life is important, too. Ignoring unemployment, most households are two-income families, and in order for a family to survive, there must be some consideration for a family’s needs during the day. Often, the message of work/life balance doesn’t survive as it is passed down the ranks from the upper-level executives to the mid-level managers, whose job is to put business needs ahead of just about everything else.

That was the case in my old company when I was there. Upper management saw the benefit of allowing people to work from home occasionally. This flexibility increases productivity and morale, and there’s a new study that proves this assumption, as I’ll describe below. Nevertheless, some responsibilities in that environment could not be done from a location other than the office. That’s an understandable reason for limiting the availability of telecommuting options, but many managers do not trust either the studies or their employees.

Home office deskI’ve had managers who believe that without a line of sight, employees would simply not work. They follow corporate guidelines and allow employees to occasionally work from home, but they’re grumpy about it, and those who do opt to take advantage of flexible working arrangements like telecommuting or alternate hours are viewed as less dedicated to the company and more likely to miss out on rewards like raises and bonuses regardless of performance.

Researchers at Stanford University developed a method of testing theories about working from home to determine, in a controlled environment rather than through anecdotal evidence or less-rigorous testing, whether telecommuting and other working arrangements such as flexible hours are beneficial to a company. The researchers, in a presentation labeled “very preliminary,” note that although work/life balance is used in recruiting, prior to the study there has been no evidence showing a cause and effect relationship between flexible policies and employees or employers. Most of what we “know” about work/life balance today relies on case studies (anecdotal evidence) and human resource surveys. This Stanford experiment set out to change that.

In this experiment, the researchers used a Chinese travel agency with 12,000 employees and a corporate culture modeled after American companies. The sample included call center workers, some who would be allowed to work four out of five shifts from home and others who were not. From a statistical perspective, those who worked from home were significantly more productive. Both quantitatively (number of calls) and qualitatively (judged by call quality assessments), working from home benefited the company. The quieter environment of the home increased concentration and the healthier environment resulted in fewer missed workdays.

From the employee’s perspective, they are more satisfied with their working experience at the company. The firm involved with the test has been so impressed with the results of the study that they are rolling out the plan to the rest of the company.

The next time you have the opportunity to discuss working from home with your manager, be sure to share the positive data.

Do you work from home? If so, are you more productive than you would be in an office?

Photo: C G-K
Stanford University [pdf]

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Year End Reminder: Rebalance Your Portfolio

This article was written by in Investing. 1 comment.

As the end of the year approaches, take a break from stressing about the holiday season by getting your personal finances in order. It’s a great time to finish your charitable contributions and adjust your 401(k) contribution. It’s also better to fund your IRA now than it is to wait until the April deadline. You can also use this time as an opportunity to adjust your investment portfolio.

Having a hands-off approach to investing is an acceptable strategy. Over the long term, a diversified portfolio of stocks has historically grown in value enough to build wealth, but only over long periods of time. Advisers, especially those who appreciate the low-cost advantages of using index funds rather than actively-managed mutual funds or stocks, have generally said to invest now and leave your investments alone without too much tampering.

BalanceSome tampering is required, though. Even if you like the set-it-and-forget-it approach to investing, each year you should evaluate your financial needs, goals, and risk tolerance to ensure you’re still invested in the most effective way. There are two goals when rebalancing your portfolio. First, if your underlying investment approach needs to change, you can reflect your new needs in how you distribute your investments between stocks, cash, and other asset classes. Also, rebalancing gives you the opportunity to lock in gains in one asset class while taking advantage of lower prices in another.

Evaluate your goals and needs against your reality

There are circumstances where your investing approach might need to change. If you’ve been investing 10% of your income every year in stocks and no other investments, you are accepting a certain level of risk. If one of your family members suddenly becomes ill and needs expensive care, you might find that you now have a larger chance of needing the money you’ve been saving for retirement in the near future. Suddenly, having your wealth tied into volatile assets is riskier than you can afford.

In another example, you might have inherited an investment. If this changes your financial situation, you may find that you no longer need an annual return of 8% to reach your financial goals. You could accept less risk and lower returns, and this could be reflected in your investment strategy by moving away from stocks into less volatile investments like bonds.

Look at your entire investable net worth

Your 401(k) plan might have an option to periodically automatically rebalance your portfolio based on your preferences. Rebalancing in general, whether automated or not, is a good way to lock in gains and take advantage of lower prices, particularly in a tax-efficient account where you don’t need to pay the government anything as a result of your gains. For example, in a basic scenario, you might have chosen to invest 60% of your portfolio in stocks and 40% of your portfolio in bonds. If stocks have a great year, they might have increased in value to represent 65% of your portfolio, leaving 35% for bonds. Without changing anything, you now have a riskier profile than you intended.

Rebalancing will allow you to sell the 5% of your portfolio, invested in stocks, and use the proceeds to buy more bonds, moving your profile back to 60% stocks and 40% bonds. You’re selling high and buying low, precisely the type of investing strategy that has a good probability of succeeding over the long term.

If you set your initial investment and risk profile with just your 401(k) in mind, you might not be considering outside investments like IRAs and taxable investment accounts. Take a holistic approach, looking at your entire investment portfolio, including how much cash — money market funds or savings accounts — you have. When rebalancing, you should take your entire financial picture into account. This is a reason automatic rebalancing options in 401(k) plans are not always sufficient.

Photo: Cherice

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Year End Reminder: Donate to Charity

by Flexo
Charity Box

The year is quickly coming to a close, and the first priority for many people right now is getting through the holidays with as little stress as possible. Focusing solely on the holidays at the expense of your household’s financial needs can only add to stress later, so it might help to get a few ... Continue reading this article…

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Year End Reminder: Change Your 401(k) Contribution Level Now

by Flexo
Winter Snow

At the end of the year, most people in the United States are thinking about the holidays and the potential credit card bills for gifts and family visits. One good way to control this potentially stressful month is to take some time to breathe and get your own finances in order. There are several actions ... Continue reading this article…

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Podcast 135: Discardia

by Flexo

Today on the Consumerism Commentary Podcast, Bryan speaks with Dinah Sanders, author of Discardia: More Life, Less Stuff. Discardia is a holiday, a philosophy, and now a book that explains why life is more stressful as a result of having too much stuff, or the wrong kind of stuff. The book is filled with advice ... Continue reading this article…

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Construction Revolutionized My Finances

by Flexo
Construction Bulldozer

This is a guest article by Jon the Saver, a personal finance blogger at Free Money Wisdom. His mission is to spread financial wisdom and help people get their financial lives under control. In his down time he loves a mean game of Scrabble and spending quality time with his fiancee. I’m probably the only ... Continue reading this article…

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