Newly.Wed: the Big Merger

by kerri
May I just say, good or bad, in relationships many things are related to money. Maybe it doesn't speak well of our society or maybe it does. But the truth of things is love is not enough to sustain a marriage/relationship. It helps; it makes you more willing to try new things or put up with things you NEVER would have without it. But we need to have food and shelter and shoes. (Matt would disagree with one of those. Can you guess which?)

I bring this up because recently we took one of the biggest steps in our relationship: joint checking. To the outside world, I realize this doesn't seem all that big of a deal; however, we've been dating for A Long Time and we have become set in our ways with regards to our personal finances. I am a diligent (read: mildly obsessive) checkbook-balancer, constantly making sure my balance matches the bank's. Matt checks his balance every time he makes a deposit or withdrawal at the ATM. I use debit cards, Matt uses cash Only. You get the picture. Fortunately, we are both successful at keeping track of our money and agree on budgets and spending patterns. But getting a hang of doing it Together is very interesting indeed.

Budgeting isn't easy for anyone I don't think. Because there is always something out there to be purchased - the new Gran Turismo game for Matt, a lovely jersey print for me. But it's important for both of us (once again - thank goodness that we agree on this) that we spend conservatively and are both aware of our expenses. Everybody finds a different system that works for them, and we are slowly but surely finding ours. I just got off the phone with Matt after paying off some major bills this weekend. He asked me (in three different ways, mind you) if I made sure to include ALL of the things we paid off in my balance.

Yes Matt, I added our deposits and subtracted our payments.
Yes Matt, I included that check in my balance.
No Matt, I did not write so many checks on things that we are now negative money and required to wash dishes at the bank to work it off!
Jeez!

I digress. I love that we are taking equal roles in this venture into joint checking. I love that we feel equally responsible to each other and our running balance to check in with each other about the status of our money. And I seriously love that we are starting our financial marriage (because let's face it, marriage is the biggest financial commitment we will ever make) on the right foot with good habits, very little debt (in the name of my lovely little Toyota Corolla, Glenda) and the desire for a partnership.

Now, to convince a certain someone that a ten-day St. Lucian honeymoon is totally fiscally responsible and Necessary...

Going Green (and I'm not talking about the environment)

After clearing away the tornado wreckage that was the state of my office this morning after a serious sewing binge, I thought I would direct my thoughts for the first time in days on something other than zig zag stitches and business cards.

Naturally money came to mind first.

You see, I was talking briefly with a friend this week about budgeting, and she mentioned that one of her friends had moved to an all cash system for their household finances. Apparently it was working out really well for them, and they were making progress on their financial goals.

All Cash?
But all cash? I had to ask. Could it really help? Was it even possible? There are all kinds of debates going on in the world about the best way to save and spend money. In fact, I was just reading the latest issue of Time magazine where they compared budgeting to dieting, and recommended all the familiar do’s and don’ts (don’t forbid certain purchases, do schedule rewards, etc. etc.). And certainly I have heard that going “all cash” is a clever little psychological trick to keep money in your wallet. Because the rumor is that those handy plastic cards don’t feel like money the way that the green paper and silver coins do. I can see how that would be the case.

A Plastic Convenience...
I can also see, however, how impractical it would be for me to pay everything with the green stuff. Like me counting out change at the gas station. Or sending my nickels in the mail for my gas bill. (I’m being facetious--I’m sure the “cash” system affords for practical deviations.) I’m just so fond of the convenience of plastic.

Worth Trying!
Nevertheless, both my friend and I agreed that using cash for things like groceries, and anything involving me stepping my foot into Target, might be beneficial. So I thought perhaps I would try it. After all, I mentioned on Monday that there were still some budgeting goals that I wanted to tackle before the sun (temporarily) sets on Recessionistas, and this could be a good exercise along that vein.

How About You?
But I’m curious to hear from you. Have any of you readers tried a cash system for spending? Do you think that it would make a difference? Or more generally, do you currently use any clever tricks to keep you financially on track? Please share by commenting below!

And yes, I know that I have lots of sewing updates for you all. Like pictures from my red dress (still have to finish those sleeves!), and a follow-up from last night’s Best Birth Event, and the latest about my efforts in online commerce... I promise it’s all coming!

Previous Recessionista Posts on Budgeting:
Smarty Pants: Fraud Protection
28 Days Makes a Habit (or so they say)
The New Midas Touch
Can I Get a Pulse?

Can I Get a Pulse?

Perhaps it was my former life as a banker that always makes me want to get back to the money, honey. And so it is the case again today. Because I know from firsthand account that ignoring your financial vital signs can lead to poor financial health.

Vital Signs:
For instance, back when I was a financial counsellor/salesperson/bean counter (aka banker), people would come into my office with a complaint--a headache from their overdraft fees or nausea from their credit balance--and I would try to make them feel better. But one thing I often observed was that most of my patients...ahem, clients...didn’t even know their own financial vitals. Vitals like the following:

1. Account Balance and Transaction History: Perhaps it is because we don’t even handle “real” money anymore, favoring plastic cards instead, but I can’t tell you the number of people who would sit at my desk and stare in shock at their transaction history. Can that really be my balance? they’d ask, or Did I really spend $50 at Carinos? Sorta like “Can I possibly weigh that much?” And just like in physical health, often times it wasn’t until a problem cropped up, like an overdraft or fraud, that they would seek help.

2. Basic Rules: Many of my clients also forgot that their banking and credit accounts came with specific rules, sorta like calories in and calories out. These rules were those fine print terms and conditions that you receive at opening. The conditions that say, for instance, that the lender has the right to raise your interest rate from 4% to 18% if you miss a payment on your credit card. Or that says you’ll be charged a $33 fee for spending over your balance. Not understanding the rules often led to breaking them, which was almost always an expensive error.

3. Stress Points: Finally, my clients would sometimes overlook the impact financial stress can have on their relationships. For instance, I’ve seen firsthand when friendships dissolve in a bank cubicle, or marriages crumble in the lobby. Whether money was the cause of the dissent in the first place never mattered--it was the money that eventually had to be hashed out in the split. And the process was M-E-S-S-Y. It is easy to forget that when we don’t care for our money--like when we don’t care for our bodies--our loved ones are inevitably impacted.

Diagnosis?
Needless to say, the state of these financial vitals were extremely telling about a person’s overall financial health and risk factors. And like a doctor, I could almost predict the financial future based on the above basics.

Check-Up Needed:
I share this with you, of course, because part of being a Recessionista is being financially healthy. And one of the first steps to health is knowing the vital signs. I, of course, could always use a good dose of my own medicine, so I’m challenging myself to start looking at my account history every day (something I’m not so good at doing). And I’ll give you a report on how I’m doing in a couple weeks.

How about you? What vital sign could you check in on? Let me hear your check-up plan today by posting your comment below! Maybe you’ll inspire someone else to follow your “healthy” example.

Previous Recessionista Posts:
Homegrown Resilience
A Wallet Full of Friends
At Least a Lighter Wallet Weighs Less...
Kickin' My Budget into Gear

How Minty! My favorite financial find this Fall

One of my favorite finds during my "back to basics" challenge is Mint.com.  In case you missed it, Mint is a free online budgeting program, and quite a nifty one.

I bring up Mint this morning because they've recently updated their site, now allowing you to name your own budgeting categories (as opposed to just using the ones they prescribed to you in a drop-down menu).  So if you decide that you desperately need a budgeting category called "girly magazines" so that you can stop spending so much on the glossies (and by "you" of course I actually mean "me"), you're in luck.  

If you've been following my posts this Fall, then you are familiar with my...ahem...financial management shortcomings.  Like how I let my receipts pile up without reconciling them, and how I have only vague (as opposed to concrete) ideas about where I'm spending my money from month to month.  Well, after using Mint for over a month now, I'm happy to report that I am actually getting better at the whole money thing!  And getting better makes me feel better.  More organized, less impulsive, and more intentional.  

So if you haven't visited Mint.com yet, take a sec to do it.  With all of this money talk in the news, there is no better time to get your financial ducks in a row.  And having your ducks in a row frees you up to focus on other, more important things.  Like when the next issue of Domino is going to arrive, for instance.  So that you can tabulate it in your "glossies" category.  And by "you," of course, I mean "me."

More on budgeting:

Faux Leather Jackets: my tale of impulse shopping

Tips for Cooling My Spending Impulses

My Backwards Budget and Financial Plan (no pie charts included!)

Don't go far!  Join me later today as I introduce this week's Marketplace Maven!  Don't miss it!

Smarty Pants: The Bailout

Why is it easier to remember which Hollywood starlet recently had a baby that it is to remember the names of world leaders?

Because news is boring, right?  Wrong.  

Be a smarty pants.  It's fun.

Since Smarty Pants is about current events, and I'm currently writing about budgeting, it seems natural for my first post to address the SKY is FALLING financial events of late (otherwise known as the Bailout Plan).  

I spent a great deal of time yesterday reading about the bailout plan, including the actual plan itself (okay, so maybe I didn't get through the entire 107 page document...even I'm not that ambitious!), and my feelings for it are, well, a bit muddled.  I mean, far be it for me to promote inaction and have the bottom drop out of the economy like they ("they" being a variety of economists and pundits) say it will.  On the other hand, it is an awful lot of money, and it does give the Secretary of Treasury an awful lot of power, and we're not even sure if it will work.

So what's a girl to think?

Well, I'm no expert, but here are my considerations as of late:

1.  our economic system is sick.  And contrary to popular political rhetoric, it's not just sick because of so-and-so's poor political judgement.  Our economy is sick because it is based on the premise that health and stability = exceeding our means.  In other words, it feeds too much on debt (aka "credit").  

2.  this bailout plan, regardless of its merits, does not intend to fix this debt-addiction.  In fact, it aims to do just the opposite.

3.  However, fixing the debt-addiction all at once would likely collapse the system

4.  And therefore the bailout plan might be a necessarily evil  

Finally, economic responsibility starts at home.  Or, at least that is the only area where we (we being the average consumer) can exercise any substantial control.  I've been forced to ask myself some tough questions lately, like how tempted am I to use debt to "get ahead"?  And how often do I spend when I should be saving?  

Granted, no amount of personal responsibility and heart-to-hearts will stop this national (really, global) drama from unfolding without pain.  And it would be trite to suggest otherwise.  But part of understanding current events is knowing how they can impact the decisions we make at the family level.  And I know my decisions need to change.

To read more about the plan:

Draft of the Plan in pdf 

Bailout Plan is Only One Step on a Long Road

Dow's Historic Drop Reflects Financial System's Challenges

Breakdown of the Financial Bailout Bill