Ed note: We’ve talked about it before – marriage and managing money doesn’t always come easy. Here’s the way it went down for one couple. Plus, the amazing successes they have had as a result of their hard work.
Early in our marriage my wife Carrie and I made four decisions about money.
These decisions have allowed us to avoid many of the unwelcome trappings that money issues can bring into a marriage. The outcomes brought us closer together and helped us build a strong foundation of trust. Plus, the financial habits we formed as a result of these conversations will serve us well for years to come.
Feelings and personal opinions about money are powerful. Sharing how you feel can release any tension and allow for emotional progress.
If you value having a large financial safety net in order to feel financially secure, share that with your partner. Your partner needs to know how different money situations make you feel.
Of course, it goes both ways.
Asking your partner to share how they feel about money with you can be a sign of respect and consideration. You want to be listened to and feel understood and so does your partner. Don’t assume your partner feels confident about your current financial situation. Ask your partner how they feel and talk about how money is affecting your relationship.
Decide to combine or keep separate accounts
My wife and I combined our accounts right away. It just made more sense to us and we found it easier to manage our finances that way. However, combining accounts could cross all kinds of personal boundaries for others.
You should talk about combining or keeping separate accounts with your partner. Both scenarios have their challenges and rewards, but you need to discuss which option works best for your plans.
Some questions to get you started include:
- Why do you want to combine or keep separate accounts?
- What are the feelings and the personal objections you have for either case?
Weak communication here could make whatever choice you make more difficult than it needs to be. Whichever option you choose, have strong, smart and well-thought-out reasons why. Then communicate those reasons to each other.
Set a budget
Doing a budget together meant everything for us. We started a budget during our second month of marriage. Prior to doing so, we had no idea where our money was going. Having a budget opened up a whole new world for us.
We’ve had a monthly budget for the past four years. It has allowed us to survive some pretty nasty financial challenges.
We survived a short sale on a house that Carrie bought before we were married.
I quit my job to start my own business, and we lived on one salary for nearly two years. If we didn’t have a tight grip on our finances, all of these situations would have been financially difficult, if not impossible, to manage.
Start figuring out your own budget by downloading this monthly budget spreadsheet.
When we first started our budget we were shocked to find that we had spent $450 on restaurants in one month. We estimated $100 at first but were off by $350! To prevent overspending, we immediately started only using cash for restaurants with a budget of $100 each month.
As a result of this choice, we were able to save $16,800 during the first four years on our new budget
But the best part about using cash is the habits that we have formed. The first few months, it was hard to eat out less, but now it’s easy. Habits are hard to break. That goes for good habits too, not just bad ones.
Making these decisions has allowed us to make progress in our relationship and our finances.
Have you talked with your partner about these four areas of finance?
Ed note: There are a few persistent tax myths that pop up year after year. Here’s the unfortunate truth about some of these misconceptions. Leer en español.
Myth #1: Being Unemployed Means Not Paying Taxes
Any unemployment benefits you receive from local, state or federal government entities are considered to be income and must be reported on your tax return. You should receive a Form 1099-G showing the amount you were paid and any taxes withheld. The good news is that you may qualify for deductions on some job-search-related expenses. .
Myth #2: Any Gift Can be a Charitable Contribution
You might play “Secret Santa” this winter by gifting a family $500. While it’s a wonderful gesture, it can’t be counted as a charitable deduction. Only charitable gifts or donations made to qualified exempt institutions can be deducted on your tax return. Check an organization’s status using this IRS tool. Additionally, there are other recordkeeping requirements and limitations that apply to charitable deductions.
Myth #3: I can file my tax return using the information on my last paycheck stub
While it might be accurate, it also might not be. Officially speaking, the IRS requires you to have Form W-2 when filing your return. While you can use that last pay stub to estimate your tax refund – or what you may owe – for your own purposes, but don’t file until you have the official document. You should receive it by January 31 at the latest, but try these steps if you are still missing your W-2 at that time.
Myth #4: Filing an extension gives me more time to pay my taxes
If you file an extension before April 15, 2015, you will avoid incurring the late filing penalty if you file a return by October 15, 2015. However, you are still expected to estimate the amount you will owe and pay at least 90% of it before the April 15 deadline. If you don’t pay the estimated amount, , you will be hit with a failure-to-pay penalty of 0.5% of your unpaid taxes each month the balance isn’t paid. That penalty applies even if you file before the extended deadline.
Ed note: The first time I went to buy prime rib for Christmas dinner, I had incredible sticker shock. So if you are like me, and want a “traditional” holiday meal without paying a ton, the answer might be in adopting a different cultural tradition for the holidays. Laura Klein explains.
As the holiday season draws closer, it can be fun to learn about and experiment with food traditions from different cultures. Maybe you’re still figuring out how you want to celebrate your holiday. Maybe you just want your family to have an understanding of other ethnic backgrounds and religions. No matter the budget, here are tips to celebrate the holidays affordably, along with global food traditions to consider while doing so!
Global Holiday Traditions to Consider this Holiday Season:
Feast of Seven Fishes
The Feast of Seven Fishes is an elaborate seven course fish dinner that families of Italian descent celebrate on Christmas Eve. It dates back to the 4th century when Roman Catholics were required to refrain from eating meat during the days leading up to Christmas. Some contend that the seven courses stand for the seven sacraments. There’s no specific preparation. You could do pasta with tuna and a tomato sauce or a cashew salmon – or any favorite seafood entrée.
Oil-Based Foods for Hanukkah
Oil is also the foundation for a variety of traditional foods eaten during Hanukkah, including potato pancakes, known as latkes, and jelly-filled doughnuts. Oil commemorates the Jewish festival of lights as well as the victory of the Maccabees over the Greeks, when there was only enough oil to light the menorah for one night but it lasted eight nights.
Mincemeat Pies for Christmas
Mincemeat pies were originally oval-shaped to celebrate Jesus in the manger with a dough top symbolizing swaddling clothes. During Stuart and Georgian eras, mincemeat pies were a sign of wealth because it meant you had enough money to employ a pastry chef. Today they’re circular, filled with dried fruits and still widely enjoyed.
A bucket of KFC chicken on Christmas is a traditional holiday meal in Japan. It’s all rooted in a successful marketing campaign from back in 1974. The idea for the campaign, “Kentucky for Christmas,” started when a group of foreigners was looking for turkey on Christmas, but settled for KFC chicken instead. Today, the dinner costs $40, includes cake and champagne, and must be ordered months in advance.
Save Money on Holiday Traditions with These 10 Tips
You don’t have to dip into your savings to enjoy a festive holiday season.
- Set a budget and stick to it.
- Pay in cash. When you use cash while shopping, you are more likely to stick to your budget.
- Plan your feast ahead of time, and buy stock-able items on sale.
- Cut back on the number of courses or dishes served at a dinner party. You could also opt for a buffet or a potluck to save.
- Keep recipes simple and be a smart grocery shopper.
- Shop for seasonal produce. It will be more readily available and a less expensive option for your wallet.
- Get organized. Arrange your dishes at the top of your grocery list and the ingredients you need for the recipes listed.
- Don’t buy outside of your list.
- Make the focus on the holiday season celebrating your family traditions rather than material gifts.
- If you have a big family, consider a white elephant gift exchange, where everyone picks one person from a hat to get a gift for and set a dollar limit on that gift.
Update: Good news! Congress has passed a one-year retroactive extension to these tax provisions that expired at the end of 2013. Now it just needs the President’s signature. This marks the sixth time since 2005 that Congress has extended these or similar tax breaks. Original post: There were a bunch of tax breaks that expired last […]
Ed note: We’re all afraid of something. Heights. Snakes. Whatever. But around tax time, you’ll find a lot of people very scared about the possibility of being audited. In that case, here’s some reassuring news for you. Leer en español. Most people think of the word “audit” as one of the worst five letters words […]
Ed note: How do you handle being away from the office? If you furrowed your brow and responded “wonderfully. I handle it wonderfully,” you are probably not self-employed. When you work for yourself, even vacations have to be carefully strategized – or risk unwelcome interruption. There are a lot of perks to being a freelancer. […]
It’s been said before, but the Affordable Care Act is the largest change to the tax code in 20 years. Part of that change means that there are entirely new tax forms you may need to know about. If you received health insurance coverage through a Marketplace, you’ll want to know about the 1095-A. Our […]
Ed note: If you are new to the U.S., the process of filing a tax return may seem daunting at best and impossible at worst. We help sort through what it means to be a nonresident filing for the first time – what status to use and what documentation you’ll need to work on ahead […]
Ed note: Every season has its strengths. You might not think fresh produce would be one for winter. However, if you love hearty, warm, roasted dishes, then we have great news. Winter is here with snowy days and ice crunching underfoot. But just because it’s cold outside and the gardens are all put to bed […]
Ed note: Are you cheering for the Tigers? The Hawks? The Dogs? Whichever college football team has your heart, Matt Loede has a way for you to follow them – literally – in the postseason. So you and your friends have decided that a 2014 NCAA Bowl game is the place to be. Maybe your team […]