Money is a very important issue that needs to be discussed when you’re getting married.  Based on studies, money is one of the leading causes of divorce.  John and I talked about how to handle our finances way before we even moved in together.  We made sure we were on the same boat.  We also made sure that all our debts are paid for before we got engaged.

There are three ways to handle your finances as a couple: joint, separate, and mixed (joint & separate).  TheNest.com has an article that outlines the pros and cons of each method.  John and I decided that the mixed method is the best one for us.

Click image to enlarge

Whoah, our chart looks like a man (robot rather) with two heads!  Anyway…

We have 7 accounts total:

• My existing checking account
  - where my income is directly deposited
• My existing savings account
  - where my extra money goes, leaving at least $200 in my checking account after all necessary expenses and contributions are made
• John’s existing checking account
  - where his income is directly deposited
• John’s existing savings account
  - where his extra money goes (I don’t know how he determines how much goes to this account)
• Joint checking account
  - our contribution is based on ratio of each individual’s income to total combined income, then matched to total joint expenses and contributions (formula in chart)
• Joint savings
  - part of our contributions that is spent on yearly expenses including vacations
• Joint long-term savings
  - part of our contributions that is set aside for emergencies and future large purchases
  - contribution to the joint long-term savings is based on the remaining income of the individual earning less after individual necessary expenses, joint expenses, contributions (joint savings), and $500 are deducted.  The contribution of the individual earning more will be calculated based on the ratios of the incomes.

How do you handle your finances as a couple?  Does your chart look like a man with two heads as well? 

I highly recommend the Consumer Action Handbook.  You can order your free copy at www.consumeraction.gov.  You can also find the info online.

The handbook includes tips and information on how to be a savvy consumer, step-by-step guide on how to file a complaint, important consumer resources, a consumer assistance directory.  The handbook begins with consumer tips that you have to keep in mind to avoid being a victim of shady deals and scams.  I find it very helpful.

1. A deal that sounds too good to be true usually is! Be wary of promises to fix your credit problems, low-interest credit cards, deals that let you skip credit card payments, business/job opportunities, risk-free investments, and free travel.
2. Extended warranties and service contracts are rarely worth what you pay for them.
3. Say no to credit insurance offers. Often offered with credit cards, car loans and home mortgages, it is almost always better to purchase regular property, life or disability insurance.
4. There is no universal three-day cooling-off period. Don’t be misled into thinking that you have an automatic three days to cancel a purchase. Only a few types of contracts give you a right to cancel.
5. Don’t share personal information with someone you don’t trust.
6. Beware of payday and tax refund loans. Interest rates on these loans are usually excessive. Even a cash advance on a credit card could be a better option.
7. Not all plastic cards offer the same protections. Your liability for the unauthorized use of a gift card and debit/ATM card may be much higher than the $50 maximum on your credit card.
8. Real estate agents represent the seller – not the buyer. When buying, consider hiring an agent or lawyer who represents you.
9. Home improvement and auto repairs are the subject of frequent complaints Getting a second opinion can help prevent costly mistakes and enable you to make better decisions.
10. Think twice before you rent-to-own. Interest rates on rent-to-own purchases can be very high. If you miss a payment, you could end up with nothing. Consider buying second-hand at a thrift shop or through ads in your local newspaper.
11. Don’t buy under stress. Avoid making big-ticket purchases during times of duress (e.g. coping with a death or debt).
12. Be cautious of Buy Here, Pay Here lots. If you decide to buy a car from a used car lot, be sure to read all of the papers before you sign. Don’t sign contracts that allow the dealership to change the finance rate AFTER you leave the lot.
13. Work-at-home ads usually don’t pay off. Be especially wary of ads that promise huge annual salaries; they often require expensive upfront fees with no guarantee. You risk losing your money and wasting a lot of time and energy.

It is known that NYC employees rank high when it comes to salary.  But I always think that we earn what we earn because of the high cost of living in the city.  So in the end, New Yorkers don’t really have more.  But I was wrong.

After reading Forbes’s article on best paid cities in the world, I was surprised to learn that NYC is the 3rd city with the most purchasing power.

1. Zurich, Switzerland
2. Geneva, Switzerland
3. New York, New York
4. Dublin, Ireland
5. Luxembourg
6. Copenhagen, Denmark
7. Los Angeles, California
8. Oslo, Norway
9. Helsinki, Finland
10. Miami, Florida

Head on to Forbes for more details on the cities.

Photo from Corbis

Did you know that most, if not all banks sign you up with overdraft protection automatically even without your consent?  This may sound beneficial especially when you need to purchase or pay for something important and you don’t want to get denied the transaction.  But you also should know that banks charge overdraft fees ranging from $10 to $38 per transaction when you exceed your balance.  This is more unfair to those who don’t even want overdraft protection.

To those who know this all too well, you can speak out by sharing your overdraft protection horror stories.

The Federal Reserve Board is asking for comments from consumers in an effort to crack down on these unfair overdraft program practices.  This joined effort will hopefully result to banks not charging their clients fees for overdraft services the clients did not sign up for and for banks to require permission before enrolling their clients to any overdraft program.

For more information and to submit your comments, click here to go to Consumers Union website.

Photo from AshleysBrideGuide.com

One of the first questions we asked ourselves when we got engaged was how much we are going to spend for the wedding. I thought setting up a budget was quick and easy. It actually turned out to be a long process that requires a lot of research for both of us who knew so little about wedding budgets.

There are many elements in a wedding. Setting up a budget not only requires coming up with a single number, but several numbers for each element. How much of your total budget will go to food and beverage, flowers and decor, photography, entertainment, etc?

There are lot of wedding budget tools on and offline that can help. But there’s one important feature missing on most of these budget tools. They don’t factor in your priorities. I learned that setting your priorities is very important in coming up with a budget breakdown. While most tools recommend allotting around 30% to 50% of the total budget to reception, our reception (including venue fee) turned out to be almost 75% of our total budget. Crazy, isn’t it? Well, to us, good food and a beautiful venue that requires minimal decor (one way to save) top our priority list.

These are the steps I followed to create our wedding budget:

Read on…

Photo from Godlike Productions

With today’s economy and the rising unemployment rate, more people are open to other options in finding a job.  Relocation is probably not one of the most attractive option, but it is a good one at this point.  The Bureau of Labor Statistics posted a list of the 25 best cities to find a job where unemployment rates are the lowest.  Six of the 25 cities didn’t even have any change in their unemployment rates.

1. Sioux City, Iowa
2. Pocatello, Idaho
3. Odessa, Texas
4. Provo, Utah
5. Salt Lake City, Utah
6. Missoula, Montana
7. Des Moines, Iowa
8. Charlestown, West Virginia
9. Great Falls, Montana
10. Portsmouth, New Hampshire
11. Lincoln, Nebraska
12. Iowa City, Iowa
13. Midland, Texas
14. Lafayette, Louisiana
15. Ames, Iowa
16. Billings, Montana
17. Casper, Wyoming
18. Fargo, North Dakota
19. Logan, Utah
20. Morgantown, West Virginia
21. Houma, Louisiana
22. Bismarck, North Dakota
23. Idaho Falls, Idaho
24. Rapid City, South Dakota
25. Sioux Falls, South Dakota

CNN and Savvy Sugar

Photo from GeekSugar.com

I see myself looking at my budget worksheet all the time and trying to find a way to cut down on my living expenses.  The highest bills that I could probably lower are the heating and cell phone bills.

I still don’t have my heater on.  I just pile on pajamas and sweaters.  So I’m hoping to get a lower bill this year than last year.  But am I willing to cut down on my cell phone services?

I lived more than half of my life without a cellphone and a third of my life without any type of phone!  I also read an article stating reasons to stop using cellphones.  So I should be fine cutting some of my cell phone services or even cutting it totally, right?  Ummm I don’t think so.

I’m sorry but I love the convenience of being able to call someone anytime.  My friends text me all the time so I need to keep my texting plan or else my bill will be much higher if I pay per use.  My internet access is definitely a big expense and unnecessary.  I really don’t want to take that service away, but if need be I will.  But for now while my contract is not up, I have a reason to keep it .

How about you?

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With unemployment on the rise in the US, it is more important now to have that emergency fund handy.  Unfortunately, according to an article on CNN, a third of Americans have no emergency savings.  And more than half of those who do, don’t have enough in it.

So how much do you need to have in your emergency fund?

That depends on your living expenses.  The article suggests that you need three to six-month worth of living expenses in the bank.  At a minimum, include the items below in calculating your living expenses:

• Mortgage/rent
• Property tax
• Utilities (i.e. electricity, heating, water, cable, phone, internet)
• Groceries
• Insurance premiums (add $400-$1000 for health insurance when health insurance is lost on unemployment)
• Car expenses (gas and loan payments) or commuting expenses
• Discretionary spending (for extra expenditures such as shopping and dining)

Click here to read the full article that includes steps to building an emergency fund. 

As soon as I read the article, I rushed to my computer to check my budget worksheet and calculated 6-month worth of living expenses.  I let out a sigh of relief when I found out that I have more than enough in my savings to cover me for 6 months.

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Before school starts, several states suspend sales tax for a few days on certain items like school supplies and clothing.

Below are the states offering tax-free holidays. Click here for details on the products the states are waiving sales tax on.  I’m sorry this post is late for other states.

*State tax only. Local taxes may or may not be waived, depending on location.

Click here to see a complete list of tax-free holidays.

The IRS is sending out the tax rebates as early as April 28.  See below for schedule.

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Direct deposit payment

Paper check

(source: Savvy Sugar)