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Wedding Donations, Smart or Tacky?

by Jeff on September 10, 2009

in Family and Life

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 Nov. 11, and needed a way to cover their expenses. They decided to turn to their friends and family for help.

Caldwell started a website, www.dollarforawedding.com, 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

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10 Things Your Parents Didn’t Teach You About Money

by Flexo on July 20, 2009

in Best Of, Personal Finance

When you were growing up, you probably became accustomed to hearing some typical thoughts about money from your parents. These parents are the ones who told you that money doesn’t grow on trees. If it weren’t for your parents, you wouldn’t know that children are starving in Africa and therefore you should eat your entire dinner. When you didn’t complete your chores, you didn’t earn your allowance. Sometimes.

If your childhood was like many people’s, your parents had good intentions. Even while they may have offered some suggestions for handling money as you grew into a young adult, you learned more from their behavior than from their words. And even though you promise to learn from your parents’ mistakes, chances are you will end up, once you have children of your own, being more like your parents than you would like to admit.

Here are ten quick lessons our parents should have given us.

1. You can’t always get what you want, but if you try some times, you’ll get what you need. Who knew that The Rolling Stones would have important life lessons to impart to the public. It’s poignant for a rock and roll song, and a good place to start. With a generation of parents who have been financially successful or have had easy access to credit, have wanted to provide the opportunities for their children than their own could not have afforded for them, and have been encouraged to do whatever it takes to ensure their children rise to the top, some children have grown up with very high expectations for themselves and a feeling of entitlement.

2. Avoid debt but understand its role. Credit cards are everywhere. Young children quickly recognize that by handing a cashier a plastic card, you can walk away with whatever you want. But even teens do not understand what it means to use a credit card and the dangers that can arise from its use. Debt can be expensive if it is not handled properly and should only be used in certain circumstances.

3. Spend less than you earn. It’s simple mathematics, but parents should help their children realize what can happen when someone consistently spends more than they earn. These consequences are often hidden, so shine the light on unsurmountable debt.

4. Consider a practical career. Did you hear, “Do what you love and the money will follow,” when you were growing up? That may be true in some circumstances, but it simply is not always the case. If your passion is bicycle racing, and you wish to do this competitively, you better make sure there is nothing else you could possibly do with your life that will make you happy. It will be very difficult to make a living bicycle racing unless you make your way to the very top. And bicycle racing is only an example.

5. Money doesn’t buy happiness, but it opens opportunities. Studies show that there is only a shaky correlation between net worth and happiness. But maybe happiness is the wrong thing to measure. Having money left over at the end of the day — more income than you have expenses — provides you with opportunities to have satisfying experiences, and with more net income, you can have more and a higher level of variety of these experiences.

6. Give to the world and the world will give back to you. It is naive to believe that for every dollar you provide to a charity or every hour you spend as a volunteer will come back to you in the same form it left. But every human being has a responsibility to try to improve this world in whatever way he or she sees fit. Not only that, but charitable work makes you feel good about yourself, and since there is no such thing as altruism, all motivation comes back to feeling good.

7. You can make the financial industry work for you. Everyone wants your money, whether they are retail stores, banks, credit card companies, your landlord, the electric company, your college, or your local coffee shop. You must give part of your money to some of these beggars, but while you do, make your money work for you. Earn interest in a high-yield savings account. Don’t stand for any financial accounts where you are required to pay a fee.

8. Don’t go into business with your friends. Once you lend money to or start a business with your your friend, your relationship is changed forever. It is likely your friend will not behave as you hope, and the result can be disappointment or outrage. Good friends can be hard to find, so don’t ruin a relationship with money or business.

9. Save first, then spend. This needs to be an explicit discussion. Children see their parents buy whatever the need whenever they want, but the background story is often hidden. They don’t know that the parents have been saving for a year in order to afford the family vacation. To a child’s point of view, Christmas presents magically appear. While you may not want to spoil the idea of Santa Claus — who must be fabulously wealthy — at a certain age, children must learn Where Presents Come From and How Many Months We Saved to Afford Them.

10. You may have to take care of us some day. Here is one reason to ensure you have money to spare as you get older: your parents are getting older first. Lifespans are generally increasing, but quality of life may not be. You may find yourself dealing with your parents’ health issues, like Alzheimer’s, Parkinson’s, ALS, or any number of medical conditions that will make it difficult for them to live without assistance. Not everyone has long term care insurance, and even if they did, there is a good chance it won’t cover all the care that is needed.

What lessons about money did your parents teach you? Are there any lessons you’ve learned since your childhood that you wish your parents had taught?

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Seven Great Gifts for College Graduates

by Flexo on May 22, 2009

in Education, Family and Life

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 2009, 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 and Quicken Online

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?

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Your Recession Budget

by Smithee on March 3, 2009

in Money Management

Many of us are going to be faced with tough decisions this year, and probably next year. We might even have to grapple with “how do I get these creditors to stop calling me?” or “well, where do I live now?” If owning a home is the American Dream, then being homeless is surely the American Nightmare.

Before it gets that bad, there are things you can do to trim your monthly budget. But instead of just presenting you with a list, I thought it’d be fun to try and take advantage of the wisdom of crowds once again, as I did in my article “No More Credit Card Debt: Now What?.” (Incidentally, the credit card debt is down to about $4,100. It hasn’t been that low before in this entire millennium.)

So, here’s a list of things that I have previously considered removing, or actually did remove, from my family’s budget when we needed to be spending less. Vote “Yay” for the things you think should be removed from a struggling household budget. Vote “boo” for the things you think are necessary for survival in a civilized world.

If you think something is missing from the list, go ahead and add it.

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8 Tips for Talking About Money With Your Significant Other

by Flexo on November 25, 2008

in Family and Life

About the author: Margaret is a recent college grad who writes at love God, not money about how she and her boyfriend are saving 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.

Tip 1: 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.

Tip 2: 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!

Tip 3: 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.

Tip 4: 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.

Tip 5: 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.

Tip 6: 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.

Tip 7: 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.

Tip 8: 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.

Photo credits: reebs*, crschmidt, gustavobando, Sabrina Campagna

If you enjoyed this article, please visit love God, not money and subscribe to the RSS feed. We would appreciate your comments and reactions, so if you would like to contribute to the discussion, leave a comment below.

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News and Blogs: Monday, November 10, 2008

by Flexo on November 10, 2008

in Link Sharing

Circuit City files for bankruptcy. This store is the latest victim of the current economy. You can look through the remaining stores, but I don’t think this bankrupcty will lead to fire-sale prices on electronics as we head into the holiday shopping season.

Is It Time to Have a Money Talk, Child to Parent? Will you have to bail out your parents? Finance is always a difficult topic across generations within the same family. This New York Times article includes a sample letter you can use to help approach the subject with your parents.

Reinsuring A.I.G. The Treasury Department added $40 billion to the bailout for A.I.G., bringing the total assigned to this company $150 billion. In return for the additional $40 billion, the government will own a stake in the company. A.I.G. will also benefit from a lower interest rate on the money it is borrowing from the Federal Reserve.

Fierce Financial Tips: The Carnival of Personal Finance #178, Struwwelpeter Edition. Today’s edition of the Carnival of Personal Finance focuses on a strange collection of 19th century children’s poetry from Germany! In addition to the articles featured as Editor’s Choice, start with What Has Changed in Personal Finance, Living Frugal With Other People’s Money, and The Importance of Doing What You Know You Should.

News and Blogs sponsor: Open an account with optionsXpress for a virtual $5,000 portfolio to test your market-timing skills.

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Make Investment Decisions Together to Avoid These Common Mistakes

by Guest Author on May 30, 2008

in Investing

About the author: This is a guest article written by Dorian Wales, a 30-year-old economist with an MBA in finance. Dorian writes frequently on his own blog, The Personal Financier.

Most common investment mistakes are deeply rooted in psychology. Many of these mistakes can be avoided by allowing another person to take part in the process and by giving this person’s opinions and believes an equal weight in decisions taken.

This person could be an investment broker, a financial planner or a trusted friend. However, who is more appropriate and worthy to take part in such sensitive and significant decisions than your life partner?

At first, some might flinch at the thought of an inexperienced or unprofessional person suddenly participating in a process that clearly requires a certain level of understanding and proficiency. Others might claim a spouse has a right to affect the financial decisions of the household.

I believe both arguments hold certain truths. However, I intend to show how allowing another to take part in the financial decision process, more specifically when it comes to investments, common mistakes can be significantly reduced or avoided at all.

Furthermore, a deeper and more intimate relationship has a better chance at avoiding these mistakes due to the mutual respect and understanding between the two partners. This mutual respect will ensure both opinions are heard and decisions will be made together.

As I’ve already stated most common investment mistakes are deeply rooted in psychology. Some mistakes are a result of over-optimism and success-oriented planning. Others are a result of our innate inability to recognize our own mistakes (or success at times).

The following are three general common investment mistakes and how they can be significantly reduced or avoided by allowing your significant other in the decision process:

1. Planning for the wrong investment time frame. Many investors don’t understand their true time horizon, when you plan to need and liquidate your funds, and plan for either shorter or longer periods of investment. Getting the investment time frame wrong usually ends in loss as a result of either not taking enough risk or taking too much risk accordingly.

Deciding on your investment time frame with your partner may produce surprising results. Perhaps you think you will wait five years before having your first child; it’s possible your future wife has other plans. You may suddenly discover your husband isn’t as happy at work as you thought, and he is contemplating a career change requiring higher levels of liquidity.

Communication is an essential part of living together and it is also, therefore, an essential part of your mutual financial planning.

2. Acting on impulse. Whether investing based on trends or on hot tips, selling at the wrong time, or making all-or-nothing decisions, every investor has been there. Every investor makes his share of mistakes. I believe we all had wished someone could have whispered a word of warning in our ears or had calmed us down before we made those hasty and costly decisions.

Another person actively taking part in the decision process acts as a voice of reason. Simply taking the time to consult will often be enough to prevent yet another spontaneous and costly decision.

On a more humorous note, imagine your wife after you’ve just told her about a great stock tip you got from a friend. One sour face and an “I don’t like him” just might cause you to forget you had ever thought about buying shares in that great bio-tech company you heard about.

3. Lack of self discipline. Two people have more discipline than just one. One individual constantly rationalizes reality to suit his wants and needs, convincing himself of certain scenarios and reasons and acting on them only to find reality backfiring on him.

Two people ground and anchor each other. If you’ve ever trained with another person you must know how harder it is to quit or give up on yourself.

Your significant other can help you stand fast against deviating from your goals and prior decisions. This is important when making investing decisions because constant buying or selling is costly in commissions and lost returns.

Naturally, there are many particular investment mistakes which could be classified under these three groups or any other generic list of mistakes. The important message I’ve tried to relay is that your partner is invaluable in the decision-making process.

A less known fact is that women are better investors than men. If you need proof just think about your TV watching habits, constantly zapping between stations (stocks?) never really making the most of a single show.

Consulting with your partner adds value, even if it’s a psychological message rather than professional advice. Who knows? They might like it and turn advisory skills into a profession or a serious hobby.

If you enjoyed this article, please visit The Personal Financier for more thoughts about investing wisely and economic trends from Dorian’s point of view. We would appreciate your comments and reactions, so if you would like to contribute to the discussion, add your comment below.

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What We Learned by Being Open with Our Friends

by Smithee on May 28, 2008

in Family and Life

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?

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