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An Argument for Couples Keeping Their Financial Independence

An Argument for Couples Keeping Their Financial Independence

Power corrupts and absolute power corrupts absolutely…At some level, power exists in friendship, romance, marriage, and family.” — Guerrero, et al, “Close Encounters: Communications in Relationships”, p. 255

Financial independence among couples is one of the new issue many newly married couples are discussing. Despite the common thought that married couples should share conjugal rights to properties involving assets acquired before marriage, it can be a wise step if the couple remain financially independent. This does not mean encouraging financial secrecy towards each other, but encouraging freedom and autonomy to expenses. This is really important to maintain stability to the family’s expenses and for the future expenses (as the family grows). Here are the reasons why the couples should remain autonomous when it comes to finances:

1. It will allow the couple to adjust to the inter-dependency of expenses, especially if one or both were already financially independent before marriage.

Since marriage is about conjugal rights of both parties’ assets, etc., it is really important to have a smooth transition from single life to married life. In order to achieve that, in the first phase of the married life, the couple should respect the autonomy of one towards his/her expenses and what he/she wishes to spend to it. According to Kelly Long, a CPA at Shephard Schwartz & Harris LLP in Chicago, having separate accounts will allow two people who were independent financially before marriage a sense of autonomy as they slowly adjust to the couplehood.

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2. It will equally divide family expenses.

The couple is highly encouraged to have different bank accounts so as to divide the expenses needs fairly. Each one can re-check if finances are available and still stable and are still able to pay his/her part from the entire family expenses. In this way, the couple can agree with each other fairly to what they should be responsible paying for. In a couple, perhaps the other one has more income than the other or has more stable/fixed income than the other.

3. It will encourage responsibility regarding the wife/husband’s debts.

Since the couple has different bank accounts or separate finances/savings, etc., it will encourage the wife/husband to be responsible of paying her/his own debts. Thus, it also promotes discipline of each other towards the spending habits as well. As a result, it will be a more stable family life in terms of expenses and spending discipline. Moreover John Ulzheimer, President of Consumer Education at Smartcredit.com, says that getting into debt is a choice, not a coincidence/accident.

4. It promotes respect to each other in terms of spending habits.

By having different bank accounts, it can highly respect the differences of the habits of the other. For example, the wife may like Chanel bags or other expensive objects while the husband likes to have tools for carpentry, repairs, etc. In this manner, through having independence financially, they can have what they wish to have without harming the other by spending the partner’s money just for their items which he/she may not be agreeable towards.

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5. It keeps the relationship healthy.

Ideally, the couple married because they love each other.  However, if the they have unstable finances, it might affect each other’s relationship which later on develops to a more serious problem – Divorce. One manner which may help to avoid this is couples being highly encouraged to have separate accounts. This is according to Rosemary Frank, a certified Divorce Financial Analyst in Brentwood, Tennessee.

Possible problems if couples are highly dependent financially:

1. One person may lose their identity is such a relationship.

Because one is dependent on the other in terms of finances, it will also affect the way they behave and interrelate.

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2. It promotes inequality in the relationship.

It is really unhealthy for the couples to feel prejudice in some manner. It may be minor or may explode into something major.

3. It will put the wife/husband at high risk when circumstances change.

Loss of job in a single career family, is an example. If both incomes are dependent on one and the other partner doesn’t have resources, they family could be put in a bind during this time.

4. It impairs equal incentive as an individual.

This means that when the other one is financially dependent to his/her wife/husband, it may lessen the incentive of the other to earn and experience confidence and pride from also providing for the family monetarily.

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5. It explicitly shows dominance within relationships.

Because of the fact that the other one is unable to spend or to contribute toward the expenses in the family, the other one can easily show dominance over the other. This can cause one to feel demeaned and the other to feel burdened with responsibility.

A piece of advice to married couples:

Ruth Hayden, a financial educator and author in St. Paul, Minnesota, writes that there are many couples who think that they can be actually fair at all times in terms of finances, yet this is impossible. She advises couples to just be clear to their goals as a married couple and move on from there.

Featured photo credit: Dodgerton Skillhause via mrg.bz

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Published on November 20, 2018

The Best Ways to Save Money Even Impulsive Spenders Can Get Behind

The Best Ways to Save Money Even Impulsive Spenders Can Get Behind

The truth is, there are many “money saving guides” online, but most don’t cover the root issue for not saving.

Once I’d discovered a few key factors that allowed me to save 10k in one year, I realized why most articles couldn’t help me. The problem is that even with the right strategies you can still fail to save money. You need to have the right systems in place and the right mindset.

In this guide, I’ll cover the best ways to save money — practical yet powerful steps you can take to start saving more. It won’t be easy but with hard work, I’m confident you’ll be able to save more money–even if you’re an impulsive spender.

Why Your Past Prevents You from Saving Money

Are you constantly thinking about your financial mistakes?

If so, these thoughts are holding you back from saving.

I get it, you wish you could go back in time to avoid your financial downfalls. But dwelling over your past will only rob you from your future. Instead, reflect on your mistakes and ask yourself what lessons you can learn from them.

It wasn’t easy for me to accept that I had accumulated thousands of dollars in credit card debt. Once I did, I started heading in the right direction. Embrace your past failures and use them as an opportunity to set new financial goals.

For example, after accepting that you’re thousands of dollars in debt create a plan to be debt free in a year or two. This way when you’ll be at peace even when you get negative thoughts about your finances. Now you can focus more time on saving and less on your past financial mistakes.

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How to Effortlessly Track Your Spending

Stop manually tracking your spending.

Leverage powerful analytic tools such as Personal Capital and these money management apps to do the work for you. This tool has worked for me and has kept me motivated to why I’m saving in the first place. Once you login to your Personal Capital dashboard, you’re able to view your net worth.

When I’d first signed up with Personal Capital, I had a negative net worth, but this motivated me to save more. With this tool, you can also view your spending patterns, expenses, and how much money you’re saving.

Use your net worth as your north star to saving more. Whenever you experience financial setbacks, view how far you’ve come along. Saving money is only half the battle, being consistent is the other half.

The Truth on Why You Keep Failing

Saving money isn’t sexy. If it was, wouldn’t everyone be doing it?

Some people are natural savers, but most are impulsive spenders. Instead of denying that you’re an impulsive spender, embrace it.

Don’t try to save 60 to 70% of your income if this means you’ll live a miserable life. Saving money isn’t a race but a marathon. You’re saving for retirement and for large purchases.

If you’re currently having a hard time saving, start spending more money on nice things. This may sound counterintuitive but hear me out. Wouldn’t it be better to save $200 each month for 12 months instead of $500 for 3 months?

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Most people run into trouble because they create budgets that set them up for failure. This system won’t work for those who are frugal, but chances are they don’t need help saving. This system is for those who can’t save money and need to be rewarded for their hard work.

Only because you’re buying nice things doesn’t mean that you’ll save less. Here are some rules you should have in place:

  1. Save more than 50% of your available money (after expenses)
  2. Only buy nice things after saving
  3. Automate your savings with automatic bank transfers

These are the same rules that helped me save thousands each year while buying the latest iPhone. Focus only on items that are important to you. Remember, you can afford anything but not everything.

How to Foolproof Yourself out of Debt

Personal finance is a game. On one end, you’re earning money; and on the to other, you’re saving. But what ends up counting in the end isn’t how much you earn but how much you save. Research shows that about 60% of Americans spend more than they save.[1]

So how can you separate yourself from the 60%?

By not accumulating more debt. This way you’ll have more money to save and avoid having more financial obligations. A great way to stop accumulating debt is using cash to pay for all your transactions.

This will be challenging, depending on how reliant you are with your credit card, but it’s worth the effort. Not only will you stop accruing debt, but you’ll also be more conscious with what you buy.

For example, you’ll think twice about purchasing a new $200 headphone despite having the cash to buy them. According to a poll conducted by The CreditCards.com, 5 out of 6 Americans are impulsive spenders.[2]

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Telling yourself that you’ll have the discipline to not buy things won’t cut it. This is equal to having junk food in your fridge while trying to eat healthy–it’s only a matter of time before you slip. By using cash to make your purchases, you’ll spend less and save more.

A Proven Formula to Skyrocket Your Savings

Having proven systems in place to help you save more is important, but they’re not the best way to save money.

You can search for dozens of ways to save money, but there’ll always be a limit. Instead of spending the majority of your effort saving, look for ways to increase your income. The truth is that once you have the right systems in place, saving is easy.

What’s challenging is earning more money. There are many routes you can take to achieve this. For example, you can work long and hard at your current job to earn a raise. But there’s one problem–you’re depending on someone else to give you a raise.

Your company will have to have the budget, and you’ll have to know how to toot your own horn to get this raise. This isn’t to say that earning a raise is impossible, but things are better when you’re in control right? That’s why building a side-hustle is the best way to increase your income.

Think of your side-hustle as a part-time job doing something you enjoy. You can sell items on eBay for a profit, or design websites for small businesses. Building a side-hustle will be on the hardest things you’ll do, be too stubborn to quit.

During the early stages, you won’t be making money and that’s okay. Since you already have a source of income, you won’t be dependent on your side-hustle to pay for your expenses. Depending on how much time you invest in your side-hustle, it can one day replace your current income.

Whatever route you take, focus more on earning and save as much as possible. You have more control than you give yourself credit for.

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Transform Yourself into a Saving Money Machine

Saving money isn’t complicated but it’s one of the hardest things you’ll do.

By learning from your mistakes and rewarding yourself after saving you’ll save more. What would you do with an extra $200 or $500 each month? To some, this is life-changing money that can improve the quality of their lives.

The truth is saving money is an art. Save too much and you’ll quit, but save too little and you’ll pay for the consequences in the future. Saving money takes effort and having the right systems in place.

Imagine if you’d started saving an extra $100 this next month? Or, saved $20K in one year? Although it’s hard to imagine, this can be your reality if you follow the principles covered in this guide.

Take a moment to brainstorm which goals you’d be able to reach if you had extra money each month. Use these goals as motivation to help you stay on track on your journey to saving more. If I was able to save thousands of dollars with little guidance, imagine what you’ll be able to do.

What are you waiting for? Go and start saving money, the sky is your limit.

Featured photo credit: rawpixel via unsplash.com

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