How You Can Solve Your Marriage’s Most Important Money Questions


You can do this

by Meg Keene, CEO & Editor-In-Chief

pig bank

Chances are, at some point, most of us probably got a bare-bones financial education, or else we wouldn’t know how to write a check. But otherwise? As a country we’re pretty financially illiterate—only 37 percent of Americans can pass this basic financial literacy quiz. When that news broke, I asked the APW staff if they were willing to take it. We have a team full of really smart ladies, and they all scored well on the quiz. But after they took it, they pointed out that the quiz really just covered basic math concepts. (Q: How fast does what you owe grow if your interest rate is 20 percent? A: Really fucking fast.) And beyond basic math concepts, most of them were pretty lost.

Which is to say, this problem isn’t abstract—and it’s causing a lot of stress in a lot of millennial marriages. How do I know? Because I’ve spent years working to self-educate about money, and I’ve ended up fielding a lot of my very smart friends’ very stressed questions.

When I was in my early twenties and really broke (aka living in New York City on $18k to $27k a year), I decided I needed to learn the basics of managing money. That meant that I ordered a ton of “finance for young dummies” books online, and started a savings account. While I was able to eventually save up to have a month’s pay in the bank, by saving in $100/month increments (high fives!), I now realize that the real prize was that I taught myself the basics of how to save money. And that meant that while money was always tight in my twenties, I emerged from that decade married, and with an emergency fund (all saved by me, and none by my then-in-law-school husband, HEY LADIES).

In recent years, I’ve shifted my focus from the basics of how to manage money to deeper emotional questions around cash. Because it turns out that all of the financial education in the world won’t save me from the fact that my deepest money memories are rooted in my mom crying over bills, or panicking as black smoke poured from a car we couldn’t afford to fix. To work on my mental relationship with money, I’ve read a ton of books—some more mystical, some more practical. They were all helpful in some way (money always seems a little magical to me, so I’m open to all sorts of metaphors for thinking about it). But through work with my coach, I realized that to heal my relationship with money, I had to work on reprogramming my money scripts (basic cognitive behavioral therapy stuff). All of this lead me to the book Mind over Money, which is written by two financial psychologists—real-life psychologists who focus on behavioral finance, money disorders, and financial health. To quote:

Chronic self-defeating and self-destructive financial behaviors aren’t driven by our rational, thinking minds. The truth is, they stem from psychological forces that lie well outside our conscious awareness, and their roots run deep, deep into our past.

And all that explains how I’m surrounded by such smart women who are so terrified by money that they remain uninformed (but can talk to me in detail about systemic cultural oppression).

Which brings us to this: basic financial literacy for women who are one part of a couple. Or, figuring out what you even need to know, how to start getting right with money, and how to talk to your partner about all this.

should we have a joint bank account?

I am, and have always been, the number one proponent for joint accounts for married couples. When I started writing about married life, lo… seven years ago (whoa), I assumed that all married couples had joint finances; they just handled them in slightly different ways.

False.

What I’ve learned over the years is that huge numbers of millennial couples are trying to keep their accounts separate. The reasons vary—from trying to protect yourself from a possible divorce, to a feeling that feminists do it on their own. But the reality is this: Unless you have an ironclad prenup, your finances are legally merged in some way anyway. (Laws vary state by state, so check if you’re in a Community Property state or Equitable Distribution state.) Keeping your finances separate is a legal fiction that will collapse in the event of divorce, if not before. Because on a most basic level, committing to marriage is committing to a partnership and a life together, and like it or not, money is the tool that you’ll use to build that life together. If you buy a house, you’ll buy it together. If you raise kids, you’ll raise them together. If you get sick, you’ll manage it together. You might as well face that reality now, by putting your money together. (Tips from me on how to do that right here.)

How do I create a budget?

I’m perpetually shocked at how many folks I know are wandering through life without a budget, hoping things will just generally sort of work out by the end of the month. I wander through life with a budget, and I still struggle to get things worked out by the end of the month, so I can’t imagine how anyone copes without. Plus, once you’re part of a couple, and there are two sets of spending habits, and if you don’t have some lines to color in… you might be surprised by your partner’s brand-new motorcycle, bought with money you thought you were saving for a house.

We’ve written at length about the tool You Need a Budget. Maddie and many of our commenters swear by it. If you are in the process of learning how to keep on a budget, or trying to get out of debt, You Need a Budget is the absolute best. However, I tried it, and… it didn’t work for me. I’ve always kept a budget, and at this point in my life (and savings), I want to be rewarded with a little bit of flexibility with what I spend. I don’t need to feel punished when red for that month, because I have quite a bit of green socked away (and I get paid in various lump sums over the course of the year to boot). So after some experimentation, I started using Mint. It’s a great way to look at all of our finances in one place (when I log in, it auto-updates and shows me our net worth, from savings accounts to home equity, minus debt). But their budgeting tool also auto-imports transactions (and lets you hide expenses that you don’t want to track that month—if, say, you’ve previously saved up for them). I have the app on my phone, and I try to go in and classify transactions every day or so, so I have a sense of where we are with our monthly budget. Not flying blind really reduces my stress.

what do you use to automate your banking?

The book that totally revolutionized our financial lives was I Will Teach You to Be Rich by Ramit Sethi. (Apologies in advance for any of you who, like me, have an aversion to the word “rich.” The books and resources here are generally great; the titles will give you hives.) Sethi runs a website by the same name that has a ton of free resources. It’s supposed to be really solid, but full disclosure, I’ve never used it—however, his book totally changed things for us financially. The basic premise of the book is that you should automate as much as possible in your finances. Bills should auto-pay; savings should auto-transfer. That frees you up to be more intentional about what you spend, and how you spend it. Turns out I’m more than willing to pack a lunch, but buying a nice lipstick feels luxurious to me. So we’ve built an automated system that helps make that happen.

The book also lays out the basics of what good investing looks like, so you can get started even if you don’t have oodles of money. Which brings us to…

how can I learn about basic investing?

Here is the thing. Investing is… not very hard. In fact, it’s so not hard that the basics of what you need to know have been boiled down to an index card. And that card was turned into a book, fittingly called The Index Card. (If you’re just starting on this journey, you should probably get it.) For something so simple, investing causes people a terrific amount of fear. But you guys, you need to get on this, because when you get older, having money saved is quite literally a life-or-death situation. And doing it on training wheels is way better than not doing it at all.

Here’s the TL;DR of investing: The basic idea is that you put some amount of money away each month ($10 or $10,000—it really doesn’t matter for purposes of this discussion). You put it in appropriate mutual funds (Vanguard is great, because it’s low-fee and an industry leader), and then you forget about it. Automate it, and more or less ignore it for the next thirty years. Plus, many people just flat-out don’t do it because they think they can do it later… or they should have done it sooner. This is all nonsense. You should start saving and doing basic investing now.

Also, if you’re reading this and you and your partner don’t both have Roth IRAs, you should probably contact your financial institution (or hell, Google it) and open one this week. I’ll let an expert tell you why.

Note: When I was researching this article, I asked people what investment resources they used, and a lot of people sent me to sites that were not, in fact, educational resources, but robo-investors, or millennial-focused financial institutions (Betterment, Wealthfront, SoFi, etc.) Using these services is fine, though the jury is out on whether robo-advisors are any better than target date funds, and it’s hard to beat the super low rate of Vanguard’s funds, TBH. That said, it’s important to realize that all of these firms are trying to sell you something. To the extent that you can get useful financial info from their websites, great. But keep in mind that they are not unbiased.

what is the best way to use credit?

The New York Times recently ran an article about how millennials are steering clear of credit cards. (Understandable, given the wild amount of student loan debt most of us got saddled with.) But the basic truth of our credit system is that you have to have credit to get credit. That means, scary as they are, you should get a (hopefully low-interest) credit card, use it occasionally, and pay it off at the end of the month. That way if you ever need larger amounts of credit (say, for buying a house), the bank will be able to see that you’re a good bet.

how do I learn to not hate/Be Terrified Of money?

I grew up with the idea that money was the root of all evil. Combine that with the fact that there never seemed to be enough money to go around in our house, and there was always stress and tears when emergency expenses came up, and… well, I grew up with a serious aversion to money and an automatic dislike of “rich people.” In 2015 I wrote about how I hadn’t managed to get past my childhood experiences with money, and I was constantly afraid there would never be enough of it. In the years since, I decided that I needed to change my thinking and try to get healthy with money.

This has been a serious ongoing endeavor for me, one that involves uprooting every one of my beliefs about money, examining it, and seeing if it’s still serving me. (Hot tip: Most of them are not.) While the best book I’ve read on the subject is the above-mentioned Mind over Money by Brad Klontz and Ted Klontz, I’ve also enjoyed (and had various problems with, but still learned from): The Soul of Money by Lynne Twist, Get Rich, Lucky Bitch by Denise Duffield Thomas, and (not technically about money but all about growing into yourself and the best book ever), Year of Yes by Shonda Rhimes.

I also wholeheartedly, wholeheartedly recommend the new podcast Bad with Money by Gabby Dunn. She has you follow along with her own (in-progress) story to get right with money, and get over shame and fear. Plus, I’m very hopeful that she’s tackling the complex intersection of the politics of money, and personal improvement with money… which so few people discuss. The personal is political, y’all.

but seriously: how do I get my shit together?

Literally, with GYST.com. Because you owe it to yourself (and your partner) to have things lined up in case of something going profoundly wrong. Founded by a woman whose father was seriously injured and had no wills or financial plans in place, GYST is set up to get you set up, for the “for worse.” These days, GYST has expanded to offer packages you can pay for, if you just want to line up your will, power of attorney, living will, and a full checklist of things to get done all in one fell swoop. But if you want to get it together on your own, that’s fine: They also offer comprehensive checklists, and guides to what you need to know. Print them out, put them on your fridge… and get your wills written, and buy some life insurance already. (Also, if you’re the practical type, GYST offers gift packages that you can ask your mama for at the holidays. She’ll probably be thrilled to help you make your new family safer.)

Meg Keene

Meg is the Founder and EIC of APW. She has written two best selling wedding books: A Practical Wedding and A Practical Wedding Planner. Meg has her BFA in Drama from NYU’s Tisch School of the Arts. She lives in Oakland, CA with her husband and two children. For more than you ever wanted to know about Meg, you can visit MegKeene.com. #NASTY

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  • Ashlah

    I heart my budget. Heart heart heart it. (FWIW, I use YNAB, and find it to be super flexible!)

    Our budget allows/encourages/requires us to be intentional with our money. It also provides a comfort that can only come from awareness of your true situation. As an example, my husband and I were recently worrying about how we will eventually afford childcare. That shit is expensive! I was able to pull up our budget and move money around to see exactly how we would make that work. Without our budget, we’d be flying blind and hoping we could swing it–with the budget, I’m confident we’ll be okay.

    The one thing I do struggle with, though, is increasing a budget category in which we routinely overspend. We go over budget on groceries almost every month, but it’s so hard to increase the category, both because we worry we’ll increase our spending to match it and continue going over, and because we don’t want to decrease our savings. So I guess we’re still figuring out just how restrictive we want our budget to feel. Sometimes I feel like we’re forcing ourselves to be too cautious relative to the amount of money we make, but on the other hand, I feel super great about our savings. It’s something we continue to discuss at every monthly budget meeting.

    • AP

      I hear you on overspending on groceries! We overspent a few months in a row before deciding two things: we figured out the major culprits and made a few changes to what we buy AND we raised the budget for groceries based on the average we were overspending. (I think we increased it $100 a month.) Since doing those things, we haven’t overspent in months and sometimes have a little leftover. This one was tough for us because we want to eat well and having groceries around keeps us from eating out, but it’s hard to swallow how much we spend on groceries for just two people.

      • Amy March

        So true on changes to what we buy- when I am spending too much on food, for me it is because I optimistically think sure, I’ll cook at home every night this week and bring lunch every day. But in reality that’s just not true, and I spend less when I acknowledge my reality and plan to buy food out places at least sometimes.

        • AP

          We had to stop buying random things at Sam’s for this very reason. I tell myself of course I’ll use a dozen bell peppers this week- I’ll cook every night! The reality is when we’re there, we’re too lazy to go to another store for staples, and then I end up composting $30 worth of fruit and vegetables.

          • Marcela

            You can freeze bell peppers! I will buy them at Sam’s and pull out 3 or 4 that we’ll use that week and cut up the rest and freeze to use later.

          • AGCourtney

            WHAT. Why didn’t I think of this? Thank you!

          • Marcela

            You’re welcome!

          • Chopped onions too! Great for additions to omelettes…

      • Meg Keene

        I can’t even with groceries, particularly with two kids. People offer these kindly suggestions like “eat less meat!” And I’m like DUDE, my husband is a vegetarian and I am almost one at home. We’ve ditched most organics. We shop at Trader Joe’s and discount supermarkets. But at the end of the day feeding 4 people in the Bay area just costs a damn lot. We adjusted what we could, but in the end we just had to raise our budget.

        TL;DR: we did a deep dig and I was SHOCKED what our grocery bill is. Short of stopping feeding our kids fruits and veggies, we’re stuck with it.

        • AP

          Yep, we pretty much had to get real with what we were spending and accept it. My money issues actually get triggered hard when I’m trying to pinch pennies at the grocery store- flashbacks to not enough food as a kid, eating the same leftovers all week, etc. Sure, I could cut our grocery budget in half if we ate boxed mac and cheese and hot dogs every day. But that is not my financial reality anymore. I have the money, and it’s way healthier for me to cut other budget categories than to have meltdowns at the grocery store.

          • Kara

            To be fair, you can eat the same leftovers all week when they are tasty and healthy :). My husband and I do this. It does help–though I hear you on expensive groceries.

          • AP

            Oh sure, but eating the same thing every night because you want to vs. because you have to are two very different realities for me.

          • Kara

            Totally! Obligations vs. choices make a big difference.

          • Danielle

            My husband was raised poor and “food insecure,” as some call it; some of his family still is (and in fact, we provide some financial support to one relative in that position, and she uses it in part for more/better groceries). I was not. We both love food.

            When we’ve reviewed our budget, we both balked at how much we spend on food: groceries and especially eating out. We realized that we could save a lot of money by cooking at home more and buying cheaper groceries.

            But… we haven’t changed our habits much. We both love eating out (and eating in general). Quality food to me is worth it. And we can afford it right now.

            If something changes with our household income or living situation, we may have to reconsider our eating habits. But for now, it’s ok, and I’m grateful for that.

        • stephanie

          It’s expensive EVERYWHERE. We spend so much on groceries for a family of three in Tennessee that it’s wild. The bulk of our purchases are also fruit and vegetables, so it’s just what we’re doing.

        • ART

          It’s so true…even at Grocery Outlet (my fave) and even for just two people, I walk out going “we spent HOW much?” Just about bit my husband’s head off the other day when he left an avocado at the store – he missed it while bagging for us. Not one of my finer moments. But duuuuude!

          • CP2011

            I am a grocery outlet aficionado :)

          • ART

            It’s so great! And mine, at least, plays the best music.

        • Jenny

          I also think that people who don’t closely budget would be surprised at how much they spend. The one thing I hear most on YNAB and personal finance places is how shocking food spending is once you get started. I tracked it pretty closely before we started with YNAB/Mint, but once we started really tracking our food budget once you counted that run to the store for coffee, or buying a soda here and there, and running up for some more potatoes, etc. I was still off by about 150 a month. Even after that, it took about 4 months of constantly going over our grocery/food budget for us to just face that eating is expensive.

        • clairekfromtheuk

          Its the same for me in the UK, groceries are just… expensive. What pisses me off is that its way cheaper to buy junk (6 donuts for £1 anyone?) than fruit and veg.

          One thing I would say to everyone though is – check how much you’re wasting. 90% of people think they waste little to no food and the reality is that 90% of people are actually in the top category for the amount they waste (this is my job so rest assured I’m not making this shizz up – I wish I was!).

          Try putting all your food waste in a separate trash can for 2 weeks (everything, peelings as well as leftovers from your plate and mouldy junk at the back of the fridge), or keep a food diary. Most families with kids can save between $800-1000 a year just by wasting less food.

        • Basketcase

          Groceries is one category where we are still figuring out whats normal and what we can save. Its expensive, but we like good food!

      • Jessica

        We always overspend on groceries when we have a party. It’s ridiculous. The next party we have is going to be it’s own line and have a budget so we don’t just rack up a huge grocery and alcohol bill with no recorded indication of why.

        • AP

          We had to do that too. Instead of buying food for parties out of the grocery budget, it comes out of our fun money and it means we don’t go out to eat or the movies if we’re having a bunch of parties. It was a good trade off for us.

        • Ashlah

          We include both alcohol and household goods (paper towels, cat food, etc) in our grocery budget, so maybe that’s part of the problem too! It’s just not worth it to me to go over a receipt and split things out. It’s unfortunate that it can make our grocery spending fluctuate so much, but I think it would stress me out more to try to figure out how much to allocate to those separate categories.

          • Michela

            We split things out into a Household Products cateogry to avoid the issue you mention, but we had a similar struggle weighing which scenario was more annoying: a less predictable grocery bill or splitting things out. The latter won out, and while it’s definitely annoying, it does prevent me from non-food impulse purchases at the grocery. Unless I really need the paper towels, I don’t buy them because I don’t want to split my receipt!

          • Jessica

            Same! Last month I had to buy TP and shampoo (and I buy nice shampoo, it lasts almost a year), and it just made it look like we were having steak and lobster every week in YNAB. But it’s just a part of household consumption.

          • Michela

            We have a Personal Care category that I specifically implemented to prevent me from impulse buying makeup or hair products that I could then “hide” in my grocery bill. Different strokes for different folks, of course, it’s just funny how we try to outsmart ourselves as adults sometimes! And hey, if it works, I’m all about trying to trick myself : )

          • MC

            OMG I totally hide my impulsive lipstick purchases in the grocery budget but had never consciously thought about it until reading your comment just now – whoops! :)

          • Michela

            Ha! Of all the vices to have, lipstick ranks low on the danger list, so I wouldn’t worry about it! I’m just one of those people who must have very clear, strict boundaries or I can’t function. Knowing this about myself is what motivated us to create a lot of specific categories rather than fewer more lump-sum categories.

          • Lisa

            I keep a separate category for “household goods” and “toiletries” into which we split our receipts. I typically carry a balance in those categories and add a small amount to them monthly ($20-40) even if we aren’t buying something during that month. That way when I have a big spending month like this one (cut my hair off and stocked up on styling products), I have some savings that I can tap into without having to worry about budgeting $100 in one go.

          • Michela

            Yet again, Lisa, we are total twins. I do the same thing!

          • Eenie

            Oh I just pulled these out (“kitty things” and household goods) of our grocery budget cause we needed to drastically cut down how much we spent (unemployed). It made the food number more realistic and we are better able to see our progress with decreasing the spending.

          • Marcela

            We keep day to day alcohol within our grocery budget, but if we’re buying for s specific event we will ring it up as a separate transaction and track that way.

        • Michela

          Same here. We bring appetizers, wine, dessert, etc. to my parents’ house every weekend and also to friends’ houses frequently. When I helped my sister set up her YNAB budget, I was surprised how little she spent on groceries until I realized she’s saving ~$30/week by not doing what we do! It’s a hard pill to swallow, but I wouldn’t sacrifice the social time for anything, so for now it’s something we build into our grocery budget.

        • Marcela

          We budget that under entertainment and I try to buy party food in a separate transaction from our normal groceries. We recently had a hurricane party when Hermine came through and snacks/alcohol for that would have been almost a quarter of our grocery budget!

      • LadyMe

        We’ve gotten really good at making sure some grocery weeks are cheap weeks – lots of beans & rice type stuff. So we’ll do like 3 cheap weeks, and then 1 week where we splurge on cheese or seafood or something. So the cheap weeks build a surplus which we then get to spend.

        • JLily

          We do this too, except try to balance it throughout the week. (Like a few days of cheaper stuff, a nicer meal at home, one night out, sort of thing.) If anyone is looking for good, cheap recipes, I recommend budgetbytes.com ! She breaks down the cost per recipe and has great ideas for stocking the pantry/freezer.

          • Ashlah

            +1 for Budget Bytes!

          • LadyMe

            I had not heard of BudgetBytes before. Some of those recipes look really good!

          • JLily

            The sesame chicken recipe is one that I make at least every two weeks. Not AS budget as some of her stuff, but so good!!

          • Jenny

            One more fan of budgetbytes! Her black bean quesadillas live in our freezer, and dragon noodles are a fav emergency meal.

          • So excited to check out that website and find new budget-friendly recipes!

        • Gaby

          another +1 for BudgetBytes! I think Beth from that blog is solely responsible for my confidence as a cook. I’ve made more recipes from there than I can count and I eventually learned to modify them for my own tastes.

        • La’Marisa-Andrea

          We do this too!

      • Ashlah

        Groceries are so tough for us because my husband does almost all of the shopping and cooking, and his preferred method is to shop every day for whatever sounds good in the moment. I’m totally fine with that, except we could probably save a chunk of money if we did some more meal planning. He is conscious of it (at least in the latter half of the month!), but I know we could be doing better. The question is how we weigh money versus satisfaction. Neither of us liked weekly shopping trips, and we probably do waste less produce, at least, buying it as we eat it. Is it worth spending more if we’re happier with the way dinner is going? Or is it worth spending more mental energy on meals if it makes the budget less stressful? I don’t know.

        • Lisa

          I wish I could answer this question because we’ve encountered the same issue. We’ve been a bit more intentional lately since my husband has been so busy and had less time to devote to finding and trying new recipes. It’s definitely cut down the 2-5x a week grocery runs now that his schedule is so packed.

        • flashphase

          I find meal planning SO tough! Living in NYC, we just never seem to both be home enough days in the week to make it work and then some produce doesn’t make it. I find what I can commit to is one big thing for Sunday dinner that becomes my lunch for the week + keeping stuff in the freezer + some kind of premade/low cook meat in the fridge. I’d love to hear from someone who makes meal planning work with an active after-work schedule!

          • Violet

            City-dweller, same problem here. Buying in bulk for the week is too heavy to carry; stopping at store on the way home from a long day and commute and then cooking not feasible.

            We do a mixture- eat out on weekends (because whatever, it’s our main discretionary splurge). Fridays are always take-out. I eat at the office one day a week that I’m consistently here late, so I do whatever’s fast-casual in the area. That leaves another three days per week. I make a one-pot meal on a Sunday, and then portion it out into glass containers. First serving goes in the fridge for Monday night, others go into the freezer. Defrost the night before.

          • flashphase

            I like that but since I like to bring lunch 4 days/week, our one-pot becomes Sunday dinner + my lunches. I don’t know if I could do another one-pot meal for dinner on top of that because I like variety.

          • Violet

            Oh yeah, that would get pretty old…

          • flashphase

            Definitely. I guess I could switch it up with lunches but I always end up making them in the morning and it becomes added stress if it’s not ready to go…

          • Lisa

            Story of my life. We usually make a big dinner early in the week or buy a pizza on Sunday that becomes my lunches for the week. If we added in a second major meal to save on prep time, I would be eating the same two meals every day of the week! We try instead to alternate between making a few smaller, 2-person-portion-sized dinners and making double batches of other meals so that we have lunches/solo night dinners.

          • LJ

            I am a huge believer of freezer items and “grab and go” cumulative snacks becoming meals. My lunches are often a combination of cheese and crackers, lunch meat roll ups, greek yogurt, veggie sticks with or without dip or hummus, fresh sliced fruit, hard boiled eggs, mini chocolate bar (Halloween size) as a treat, instant oatmeal or condensed soup….. dinners are often those “one pot” meals you all mentioned above – I keep them as dinners so I have something hearty with minimal prep during the week.

            I pre make breakfast sandwiches for 3-5 days of the week with one slice bacon, two fried-hard eggs, one serving cheddar in a hamburger bun.

            I spend Sunday grocery shopping, prepping produce, and starting the “one pot” meal (often a curry with rice, or BBQ meat with pasta salad, or veg with baked anything…etc…. not always One Pot, but always one that’s easy to reheat in the oven or in a wok).

            I’m very active in sports (various team sportsball leagues and recreational weightlifting, plus I love hiking) and I maintain a 1900-2100 calorie/day intake with around 100 g protein daily. Each meal (including the grab and go snack lunch) is around 500 calories and 25-35 grams protein.

          • LadyMe

            We both are busy 3-4 nights a week now after work, we rely heavily on the freezer and the slow-cooker. Frozen vegetables are easy to heat up in under 5 minutes in the microwave, which is how I get most of my veggies without wasting produce.

          • KEA1

            I do weekend cooking for the week. Some of this is inspired by *and* boosted tremendously by my biweekly produce delivery, but even when I don’t get a delivery I plan out a few things I can make for the week before I shop for groceries. I set aside time and plan out a strategy so that I can parallel-process as much as possible, and then have at it. Typically I end up with 3-5 servings apiece of at least three different dishes, plus I’ll often pre-chop veggies to include in my lunches for work etc. I actually invested in a LOT of small reusable containers so that I could just portion stuff out as soon as it finished cooking. But that, too, has been worth every penny. I have saved a lot of money since last year and have been eating really well (and, like LJ below, I am super-active athletically and involved in a lot after work). And it is SO nice to be able to come home from work or practice and just open up the fridge to find that dinner is ready!

        • emmers

          I think sometimes you have to just do what works for you. I’m in the same conundrum- I’m in a carpool, but some recent changes have made it where I’m probably going to start driving again. I could still save some $$ by carpooling, but the timing/meeting spot of the carpool would mean less free time for me at home. I’m so torn because I feel like I’ll be leaving $$ on the table, but the free time may be worth it for me.

          So, I feel you! And I also say as long as whatever decision you make is informed, more power to you, even if it’s not the frugalest.

      • G.

        I decided to get a CSA share this fall, in part because I like the concept and in part b/c I wanted to be forced out of a grocery & cooking rut. I’ve learned that, on the one hand, I do cook more but, on the other hand, as one person I can’t use everything. It totally fucked up my grocery budget as well even though, averaged by week, I’m actually spending less on basics (extras like good cheese, well, that’s another story). I’m debating whether I want to continue it, given the good and the bad, and, like many decisions, it all comes down to values and where food fits in (when you’re in a position to shuffle things and make choices, of course). But, damn, it’s tricky.

        • Lisa

          We considered doing a CSA share with some friends to split up the produce. The plans fell threw for us, but maybe you have some friends who would be interested in purchasing half of the share so you have less food going to waste?

          • G.

            I’d love to share it. Alas I just moved to a new city, so I don’t know enough people yet. But I’m hoping by the time spring comes along, I’ll have found someone or some folks who would be interested in splitting. In the meantime, I’ll just consider it a donation to local farms :)

            And my travel schedule precluded CSAs making sense in the past, but now that I’m traveling less, it’s much more practical. Just have to work through the growing pains!

          • Jessica

            Try joining NextDoor.com if you’re in the US, it’s a message forum for neighborhoods. You can post to it to see if anyone around you would want to split it.

          • G.

            Oh cool, I had no idea about this. I’ll check it out, thanks!

        • AP

          Good point. We’re going in this fall on a heritage breed hog raised by a friend who’s a small farmer. We’re budgeting that separately because it’s a big purchase coming all at once, and because it won’t really displace any of our other groceries because we really don’t eat conventionally-raised meat. I wanted to do a CSA this summer too, but I ultimately decided against it for the reasons you mentioned (plus we traveled a lot this summer and would have had to buy shares that we weren’t going to use.)

        • Gaby

          bountifulbaskets.com is a good alternative to CSA’s if it’s in your area. It’s cheaper but there is the option or an all-organic basket and I didn’t find the basket too hard to use up between two people. Sometimes there’d be things going into the freezer and I usually only ordered every two weeks, but I like that the commitment is week to week. The only reason I haven’t been using it is because we moved and I cannot force myself to make the 6:30am pick up time on Saturdays for the location closest to us. I love sleep.

          • G.

            I hear you on the sleep! If I were partnered, then using up the CSA share would be no big deal. It’s just a little much for one person. My understanding is that the CSA used to have a smaller share, but it wasn’t worth it for them logistically, which I understand. I just need to find a friend to share the veggies with :)

          • laddibugg

            I think you meant to post http://www.bountifulbaskets.org/ …the link you posted is for a gift basket website.

          • Gaby

            Yes, thank you! I’m used to my browser filling in the rest for me ;)

        • Sarah E

          Fall CSAs are a great way to get started, as most fall/cold season produce is much heartier and keeps for a long time (winter squash, potatoes, onions, turnips, etc) without processing. It certainly depends on what you like– we eat way more of this type of produce in our household, vs. peak season produce (tomatoes, cucumbers, greens), so a fall share works best for us.

      • CP2011

        I know! I have to remind myself that we rarely eat out for any meals so that grocery budget covers most of what we eat all month.

    • MC

      We overspent on groceries for a long time because I didn’t understand how my husband could need so much food – turns out a 6 foot tall guy who exercises regularly needs more food than a 5’2 tall gal who exercises sporadically, who knew?! Once we increased it based on our average spending and tried to be more conscious of what high-price items we buy, it now goes much more smoothly.

      • Lisa

        Being conscious of buying expensive foods was important for us, too. We were using Blue Apron for several months, which we really liked, but it was significantly more expensive than purchasing the ingredients ourselves. We’ve simplified some of our choices and are more intentional about the nights we want to try new recipes or cook a fancy meal.

        I also finally broke alcohol out into its own category because that was eating up a decent amount of our grocery budget. I called it “beverages” though so I feel slightly less like a lush!

        • CP2011

          You posted on an earlier thread about breaking out alcohol into its own category and I decided to do that too! It makes my grocery budget seem more reasonable haha. I also use the app BevRage as well as some other couponing/rebate apps to save $$ on beer. I shoot for $4.5 per six-pack of craft beer, which is a really good deal and very doable!

          • Lisa

            If I can convince my husband to use this app (he does most of the shopping), it sounds genius!! What other rebate apps do you use?

          • CP2011

            As long as he keeps his receipts, you can do the rebates yourself. The one you asked about, BevRage offers money back directly to your PayPal if you buy any of the things they are promoting, but they also have generic deals on beer, wine and liquor. Yesterday I got $2 back immediately for buying literally any 12-pack of beer. They also do money back for ordering beer/wine at any restaurant. So what I do is I wait for the grocery store to run a $13.99/12pack deal on a beer we like (typically New Belgium, Bridgeport, Widmer) and then see what offers there are on the other apps I use– ibotta and checkout 51. I can almost always get $3 back on one of the beers listed above on one of those apps (best is when they both line up) and then get $2 back on bevrage. So that’s $9/12-pack. My all time best was when Albertsons ran a crazy deal of TWO 12 packs of Ninkasi and Bridgeport for $20, and then I stacked rebates on that. The bevrage link is
            http://www.bevrage.com/promo/ZBBJDOMU

          • Ashlah

            Thanks for the info on BevRage! I signed up with your referral code. I use Ibotta already, but it’s slow going to get to the $20 minimum withdrawal, so it’s nice that BevRage deposits each rebate directly to PayPal.

          • CP2011

            Cool! Yeah it can be slow to get to the $20 on ibotta and checkout51. Mobisave is another rebate app that transfers immediately (no minimum) but it doesn’t have as good of a selection of items. You can get 8% back on Groupon through ibotta now too which I think will help speed up meeting the minimum.

      • LittleOwl

        Same same same!! I was shocked at our grocery bill. And at the same time we would have no food in the fridge because *someone* was eating it all! Meal planning and one big Sunday shopping trip has made me feel more in control.

      • Marcela

        My grocery budget when I was single was around $120/ month. Now we aim for $290 which seems insane to me. My husband just consumes so much more than I do! The sheer amount we spend on soft drinks is shocking to me. I also grew up in a house where snacking was not a thing and he will graze the entire day, in addition to normal meals. So much food…

        • LadyMe

          When I was single I spent about $70-85 a month, together we spend $200-230 a month, which makes a lot of sense because he eats about double what I do. We don’t buy snacks though because I will eat it all in 2 days if it’s laying around.

          • Marcela

            Snacks are kept on top of our kitchen cabinets. I am 5’2 and can’t reach. The indignity of scaling the countertops to get to a bag of chips will usually keep my inner snack demon quiet.

          • JC

            Really? No height restrictions will ever keep me from my tortilla chips. That’s why god made step stools.

          • G.

            Haha. That’s me and the salt & vinegar chips. I try to avoid buying them too often. But sometimes, that tangy vinegar is just too delicious to pass up.

        • Bsquillo

          FWIW, our grocery budget for my husband and myself is probably about double your two-person grocery budget per month- yours seems super frugal to me! We only eat out a couple meals a week and also try to consume a lot of healthy foods at home, which ads up.

          Just another example that budgets are always personal!

          • Lisa

            It also depends on the area and COL! Food is cheaper here, and it’s easier to get around Badtown in a car than Chicago so I can easily go to multiple grocery stores in one day to get the best prices on different items.

        • Lisa

          Ours was about $350 until we broke alcohol out into its own category. Now we spend about $250-300/month on food depending on whether we’re cooking fancier meals or need to buy more staples. I’m super proud of us for our frugality this month as we’re trending lower than we normally do at this point.

        • laddibugg

          I do not count my fiance’s beverage budget in grocery budget. He buys his juices and stuff out of ‘his’ money. He drinks enough for an army.

    • Marcela

      We were able to lower our grocery spending by moving to shopping only once every 2 weeks. When we go more often, we end up spending more on impulse buys. Also the shock of a big bill twice a month made us more aware of our spending in a way that $40 here, $20 there didn’t. There’s a lot of buying in bulk and then a flurry of re packaging things to be more convenient once we get home from the store.

      • JC

        I’ve been considering this, because we HATE shopping every week. But we don’t have a lot of space, and I’m wondering if shopping every two weeks would result in more food waste. I should really try it, but I’m a creature of habit…

        • Marcela

          The way we got around the food waste issue was by having the first week being the one with all the fresh fruits and veggies. Week 2 is more rice, pasta, potatoes and hardier veggies. Also I’ve found I can freeze many more things than I had thought possible.

    • CrisC_DC

      I guess I’d sit down and look at why you are overspending in that area. Are you buying a lot of pre-prepared food? Are you buying lots of fancy/expensive/impulse ingredients? Are you wasting/throwing out food that doesn’t get eaten or used?

      If the answer is no, then you probably haven’t set your budget high enough. I thought two could eat as cheaply as one for the longest time and realized it wasn’t true and finally had to give in and raise our budget. It felt like it hurt a bit, but in time it became less stressful than feeling like we were overspending. Some menu planning and a bit more in that area helped us a lot!

  • Wow I’m loving everything in this post. Thanks for putting together such a comprehensive list of resources, ideas and perspectives.

    A note on the credit card thing: I see this too with millennials. My fiancé has never had a credit card because he doesn’t like the idea of being in debt, or risking spending too much–but that has meant he can’t do certain things, like rent from most rental car companies, or build better credit, etc. Plus he doesn’t get those nice rewards that some credit card companies will offer. To those who fear credit cards: I stave off my fear of spending too much, etc. by ALWAYS always paying the bill before it’s due and paying the full amount. Set up reminders so you never forget to do it. And also use YNAB. Three cheers for that.

    • Ashlah

      Yep. I use my credit card for every transaction that allows it so I can reap the rewards. I track those transactions in YNAB just like I’m using a debit card. I never pay more than I can afford directly from my bank account, and I never carry a balance month to month. My bank account balance (or budget category balance) determines what I can afford, not my credit limit. Credit cards can absolutely be used responsibly and don’t have to be scary. They also offer a lot of consumer protections that debit cards don’t!

      • Jessica

        I do that too, but my husband doesn’t. We have the Amazon card and I use the points to buy presents for friends & family typically, but started hoarding the points a few months ago to get some good cash back for our vacation next month.

        • Ashlah

          My husband doesn’t either. He doesn’t trust himself to remember to pay it off in time, so he just uses his debit card. I’ve got him using my credit card for joint expenses, though!

          • Lisa

            I took this fear away for myself by checking my finances every day when I check my e-mail. This means that I can catch any fraudulent charges, and if I notice the balance is getting higher, I’ll go ahead and pay the card off since I know we have the money to cover it. (This happens at least once a week.)

            All of our cards are tied together at this point so as long as one of us is remembering to do the paying off, we have nothing to worry about!

          • Ashlah

            I check my finances every day too, though it’s largely because I find it fun to enter transactions into YNAB :) I also pay the card off a few times a month. I don’t want them reporting a high balance to my credit report, and it’s how I reconcile our budget, so the more often I do it, the better.

          • Jessica

            My husband was just taught to carry a low balance on his credit card. His parents appear to have budgeting issues, but were very serious about their kids never having credit card debt.

            When we first started dating I ended up being unemployed and racking up a huge amount of debt that I also quickly got myself out of, and taught myself good credit card behavior along the way. I use the credit card feature on YNAB to make sure he can check in and see where our balance is (roughly, since you have to enter it), and all the purchases go into the budget so we’re never spending more than we’ve got. It works out well.

            I manage our household budget for the most part (it’s like 75/25), and try to put every bill possible on the credit card. As long as you’re being responsible and paying it every month it gets you free money.

          • sofar

            My husband gets too tempted to spend extra on credit cards. So, I added him to mine as an authorized user (so that he gets a good credit history) and cut up the extra card they sent him with his name on it. That way, he can use debit for anything he buys with his “fun” money.

          • Caitlin

            How would he feel about padding the card? If he prepaid x amount, he’d have that additional amount as a cushion before it “counted”.

      • Michela

        We do that too! I was VERY nervous to put everything on my credit card, but we track all expenses in YNAB so the total is never a surprise. We also put all wedding expenses on our credit card and paid off the balances each month with the big check my parents gave us (they generously footed the bill). This means our mileage rewards credit cards now have enough miles for three full round-trip tickets from Ohio to California, which assuages my worry about moving across the country next year!

      • G.

        I also use my CC for everything I can, pay it all off every month, and enjoy treating myself to some item of REI gear when I get the reward. I understand how and why the “never use CC rhetoric” got going, but it always annoys me that the “use CC responsibly” message never gained as much traction. And given the fact that women couldn’t get credit in their name for so long, I think it’s especially important for women to be taught how to gain and use credit responsibly.

      • emmers

        I do that too! I have a card thru Costco with good rewards, and I essentially treat it like cash and pay it off each month. Our goal is to use the once-a-year cash rewards for an IRA. But I also saw that Fidelity has a credit card with 2% rewards that puts the rewards directly into an IRA! I think my Costco stuff ends up being a slightly better rate, but it was tempting, especially for the direct IRA connection.

      • Eh

        You have to be very disciplined to use your credit card for everything if it has a high limit. My husband keeps his limit low so he can’t overspend. I have a huge limit on mine but as you said “My bank account balance (or budget category balance) determines what I can afford, not my credit limit”. There are so may advantages of using a credit card over cash and debt – consumer protection is one. When I first started working I lived in a very expensive city and was only paid once a month. I knew how much I was getting at the end of the month and I budgeted accordingly.

    • LadyMe

      I haaaaaaaate credit cards. Emotionally they just put my shoulders up around my ears. I have one I got after college that I use solely for petrol and groceries.

      • LJ

        USA culture around credit cards is also waaaay different than a lot of other places around the world. Here is some context: when they started implementing the microchip cards last year (this is old news in almost everywhere else in the world, I don’t think I have had a card without a chip since like 2008) they didn’t require PINs because they thought people would be confused/find it hard to remember the PINs because of “… fear of overwhelming the average American consumer, who typically uses four or five credit cards. ”

        https://secure.globeadvisor.com/servlet/ArticleNews/story/gam/20150930/RBIBUSCREDITCARDS

        • Cellistec

          Ugh, we Americans must seem like a bunch of dummies. I swear we’re not, though we sure are susceptible to herd mentality.

    • Lisa

      We don’t even use the credit card feature in YNAB because we treat them like we’re paying cash. We never put any money that we can’t afford to pay off on the card, and as a result, we get to build good credit and get great cash back! (I <3 our Citi Double Cash card.)

      • Basketcase

        Us too. Our YNAB tracking does not differentiate between paying by cash, debit card or credit card. The money is always available in our bank account to cover the spend, so it may as well be cash.

    • sofar

      Co-signed.

      And wanted to add, there is a HUGE misconception (not in your post but for many millennials) that you are “supposed” to always carry over a small balance and pay interest on it, otherwise the “credit card companies won’t count it toward your score.” This is so completely wrong (and is obviously wrong to anyone who knows how cards and credit scoring work). But so many of my friends believed that and, as a result, REFUSED to get a credit card because they “shouldn’t have to pay interest just to have a credit score.”

      • Lisa

        I had to disabuse my husband of this notion when we got our first credit card together. His parents have always operated this way, and he didn’t know any better. I don’t like carrying debt that I don’t need to!

      • rg223

        Hmm, I wonder if that misconception comes from the fact that closing off a line of credit hurts your credit score? I knew for a long time that cancelling a credit card was bad for your credit score, but I didn’t know until we bought our home that paying off a loan actually hurts your credit score a little bit.

        • Violet

          Woah, by how much does that hurt your credit score? To pay off a loan in a lump sum?

          • Amy March

            Generally, not enough that it matters. But its something to consider if you’re on the eve of getting a mortgage and in a situation where every point counts.

          • Violet

            Okay, thanks. Sheesh. They penalize you for deleveraging?

          • Lisa

            Good to know. We’re planning to pay my husband’s loans off in the next year, and I wasn’t aware that it could negatively impact his credit score.

          • carissa

            In my understanding, it’s mainly because it shortens your credit history length for open accounts. When I paid off one of my student loans, it dropped my credit score significantly because my average age of open credit declined. I have waited to pay off the other one til my score climbed back up, and we just bought a house. Ready to pay the other one off now, but it drives me crazy that responsible action like that hurts your credit! In my case, my student loans were my oldest open accounts by a long shot, so paying them off, and with the addition of younger accounts like our mortgage, means my credit score will drop a lot again. Grrr! I keep another credit card open that I never use just because it’s my second oldest account now.

          • Lisa

            Fascinating! I don’t admit this too much, but I am one of the lucky few who doesn’t have student loan debt so this won’t be as much of a concern for me. My husband already has the (very slightly) lower score so it’s important to think about. I think we’re probably at least 2 years off from buying a house so hopefully his score will recover enough in that intervening year not to matter.

          • Ashlah

            One thing you might keep in mind is that this of course applies to credit cards too. I don’t use my oldest credit cards any more, but I try to use them for a small purchase at least once a year so the CC company doesn’t close them (which they can do without notice), which would lower my average age of accounts and worsen my credit utilization.

          • Michela

            Gah! I haven’t used my oldest credit card in months… Thanks for the reminder!

          • rg223

            What Amy March said. It seems similar to how much your credit score drops when you check your credit score.

          • When you check your credit score, it lowers your credit score?

      • Bethany

        My fiance had this same misconception and I was HORRIFIED. Luckily he wasn’t carrying over a large balance, but I thought it was so stupid to pay interest on something that he didn’t have to. He’s since started paying the entire thing off.

    • CP2011

      Yes yes yes. Credit doesn’t have to be scary. I also use credit to flex money and get better deals on expensive things without having to front it all at once. You can get a good 45 days or more to pay after buying something without ever paying interest.

    • ElisabethJoanne

      Dave Ramsey, whose advice I strongly recommend against, hates credit cards. His advice is not to use them. He basically thinks if you have access to credit, you’ll use it, and go into a debt spiral. But his own numbers say that most people with credit cards pay the balance off in full every month. I read a similar statistic in a less angsty place, too (like the Washington Post or Atlantic Monthly)

      So this idea that most people are irresponsible with credit cards is a myth. I think alcohol is a good analogy. Most people who drink, drink responsibly. They just don’t make headlines and don’t make a big deal about it. A small percentage of people don’t, can’t drink responsibly, and shouldn’t be around alcohol. And some people don’t want to have alcohol for other reasons, and that’s OK too.

      • Amy March

        ElisabethJoanne! Long time no see- welcome back, hope you’ve been well!

      • Violet

        ElisabethJoanne!!! Hey!

  • Sarah E

    Reading this at work, but this is bank. I have a fair bit of my shit together, but this is infinitely helpful to get the rest in place.

  • Anon bad with money

    Just purchased the mind over money book. I know I have an unhealthy relationship with money, I use YNAB as best as I can but I still find myself “hiding” from myself, not my husband but in general denial about what I’m spending. I often use money as a pick me up so I hope this book helps me find other outlets!!

    • Alyssa Andrews

      Same! I tried YNAB and felt so much shame about… everything popping up on there. I use money as a pick-me up too and have been gradually working on it (therapy, etc), but finishing grad school and having very little income coming my way, my finances are mostly things I try to avoid looking at. Hopefully my first “adult” paycheck next month will help.

    • Meg Keene

      Yeah, YNAB didn’t work for me, for shame reasons… also because we have lots of savings, and irregular payments throughout the year. So I can be in the red one month, and still be saving lots of money. For many people YNAB would work well even then. But for me seeing RED RED RED put me in a shame spiral, and that didn’t help. It would have been fantastic back when I didn’t have savings, or if I was paying down debt.

      • Lisa

        I hate all of the red, too! What I do is adjust the balances throughout the month so that I don’t see red and fix the previous month’s budget so there are no overdrawn accounts at the end of the month. If I’m getting to the end of a month and am noticing that we’re probably not going to spend all of the transportation category, I might move that to a lower category or one that’s been overspent. I’ve also “fixed” the categories when I get a paycheck just so I don’t have to see the red.

        • Violet

          Yep, me too. While that may be too much extra work for some, I derive a benefit from it. Without YNAB, not buying something discretionary felt like a loss because I wouldn’t let myself buy the item- now it feels like a win because I’m giving myself savings or more money for other items I already decided I really want and am saving for. And then when I do buy something, no feelings of guilt or anxiety about whether I can afford it; the little numbers tell me I can. The *almost*-but-not-quite game aspect of YNAB is really very motivating to me.

          • flashphase

            Agree – not just for discretionary but for making major purchases without an anxiety attack. I started YNAB soon after my laptop died and I had to shell out $$$ for a new one. That was so painful! So I started a tech category where I stash $50 a month, and now almost 4 years later, if my laptop stops working I can get a new one without crying!

          • Violet

            Are you me? The only thing keeping me calm about the clearly pretty imminent demise of my laptop (hot and whirring with one application open? Not a good sign…) is knowing I have a stash of money earmarked for the next one.

          • Lisa

            Something that occurred to me while I was cycling to work this morning: this has also gotten easier with nYNAB because I can budget on the go. (I no longer have to wait to get home to one of our laptops to boot up YNAB4.) I like being able to correct those red categories in the moment.

      • G.

        Yeah, I’m also in YNAB didn’t work for me, but I love Mint camp. I have a mix of regular and irregular income and, at this point, a lot of carefully grown savings, so tracking spending is so much more useful (and less stressful) for me than trying to make things fit into boxes that don’t match how I earn, save, and spend over a year.

        When I started using Mint, I used very fine-grained categories. Then I realized that it just didn’t matter to me whether my good money was spent on groceries or restaurants, and I’ve transitioned to more inclusive categories. So it’s really important to figure out what works best for you as an individual, practically and emotionally, and at different times of life.

      • Anon bad with money

        When I’m using the system, YNAB is great for me, however when I get into a little hole of “I shouldn’t have bought that” I stop entering my transactions and I get behind.. which causes tension with me and my husband and causes an even bigger cycle of shame. We have lots of debt to pay off and the system works I’d say around 70% of the time, so maybe reading this book will help get me out of the cycle because YNAB has helped us so much in the past few years to save for a wedding and pay down debt.

        • Michela

          I totally feel you on this. I see so many similarities between money tracking and food journaling (which I think has been mentioned on these money threads before)- when I eat something I know I shouldn’t have, I don’t track it and then, surprise surprise, the scale registers it! I’ve basically just had to tell myself “you have to enter every transaction, period. Even if it makes you go into the red. Even if it’s going to annoy T that we’re in the red”. I’ve come to this realization because it’s the same approach that works for me while trying to lose weight.

          Of course, this strategy might totally NOT work for you. Maybe think about some areas of your life where you’ve employed strategies that might have correlations to budgeting (like my correlation with food journaling). Perhaps you can take some insights from those situations and apply them to this. Regardless, keep in mind you’ve saved for a wedding and paid down debt- that is a huge accomplishment!!xo

          • anon bad with money

            :) Thanks for the encouragement! I purchased that Mind over Money book and perhaps that will help me out of the cycle. Acknowledging I have a problem and knowing what to do about it are very different!

  • MC

    This is SO helpful, and super timely, as Husband and I have been working through all this shit over the last few months since buying a house. We also do our budget through Mint and Husband was super resistant because the idea of budgeting is super foreign to him since his parents always made enough money to never have to really budget it. There have been a lot of growing pains, but we’re getting there – I think this is the longest we’ve made it into a month without arguing about money! And I’ve been loving Bad With Money so far.

    Two questions for folks:
    1. What is the different between a Simple IRA and a Roth IRA? I swear I’ve Googled this a billion times and I still don’t know/understand if there is a difference…
    2. What is the best high-interest savings accounts? I know I’ve heard about Synchronicity, but there were a few others whose names I can’t remember…

    • Ashlah

      A Roth IRA is an account you can open entirely on your own, independent of your employer. A SIMPLE IRA might be something your employer offers, and they can make matching contributions to it. Roth contributions are post-tax (meaning you don’t pay taxes when you withdraw), SIMPLE (and Traditional) are pre-tax (meaning you save on taxes now, but will pay when you withdraw).

      • Meg Keene

        Not correct. You can open both IRA’s on your own. A Roth has money paid into it post tax, and all interest earned on it is also post tax. So if you’re young, it’s GREAT. I pay taxes on my $1K, sock it away, it grows to $7K by the time I retire (just spitballing numbers), and I can withdraw it without any additional taxes. So I just got $6K tax free. A traditional IRA is the other way around, I don’t pay taxes when I put in that $1K, but I do pay it when I pull out that $7K. If you’re older and the money isn’t going to grow much, that’s generally what you use.

        You can only pay into a roth till you hit an income cap, so it’s really important to open it as early as humanly possible, if you’re say, two working professionals, because you will probably hit that cap at some point, and then can no longer add to it. Also, once your roth IRA has been open for 5 years, you can always pull the principal for things like home purchases with no penalty. Again, a reason to open it early.

        • MC

          THANK YOU both for that explanation, that makes sense to me. I have a Simple IRA through my employer that they match up to a certain point, and I’ve decided a huge chunk of my next raise is going to go to retirement – so sounds like a Roth is in my future!

        • Ashlah

          You can open a Traditional IRA on your own, yes, but not a SIMPLE. A SIMPLE IRA is an employer-provided plan.

          • Kyle

            Yeah, I think the SIMPLE is less well-known – it’s what I have at my current employer but I didn’t know about it before, although I’m reasonably well-informed about financial stuff. It’s got some of the advantages of a traditional IRA and some of the advantages of a 401k/403b/etc. – you can get employer match and you can contribute more to it than you can contribute to a traditional or Roth IRA, but it’s (slightly) easier to transfer money from your employer-sponsored SIMPLE to a traditional IRA than to roll over a 401k to an IRA.

            Self-employed people also have the option of an SEP IRA, which I don’t know much about.

        • Wedding blogs?

          WRONG.

    • AP

      Our local credit union gives us the best interest rate on savings accounts (1.25-1.5% up to $25,000.) We haven’t been able to find anything better. Barclays and Ally are some online options that get pretty close, though.

      • Lisa

        We have a Barclays savings and a dream account. The savings returns something like 1%, and then the dream returns 1.05% plus a 5% bonus on interest earned for every six months that you add to the account but don’t remove any money.

        • AP

          Barclays would definitely be my second choice if we didn’t have access to our credit union!

  • Lisa

    Financial Independence has become my new favorite topic on the internet, and I’ve been reading lots of books and blogs around it. People have mentioned JL Collins’s stock series before, and I really have enjoyed reading his new book The Simple Path to Wealth. I’m still researching what I’ve done to my own finances and deciding if I want to continue with the choices I’ve already made or not, but it’s been extremely interesting to learn how investing can really set you up for success. My savings account returns virtually no interest, and I’ve had my life’s savings in their for years. I’m sad to think of what that money could have done for me if I’d invested it!

    • AP

      Wholeheartedly endorse The Simple Path to Wealth!! It has dramatically changed the way I think about money. The only thing my husband and I are doing differently is looking into real estate investing as a means of creating passive income, whereas Collins pretty much only recommends investing in the stock market.

    • LadyMe

      I’m working on getting my emergency fund filled and my high-rate student loan debts paid down so I can switch my focus to learning investments. I get nervous how often Vanguard/Betterment are touted in the FI world. There don’t seem to be many alternatives, so I wonder what happens when they go down or if it’s all just a hype thing.

      • Lisa

        If you read Collins’s book, he actually addresses this fear head on. Vanguard is actually owned by the investors so unless everyone pulled out at once or the stock market is destroyed, it’s not going anywhere anytime soon.

      • Meg Keene

        Vanguard isn’t hype, it’s been around FOREVER and it has the lowest fees period (I even worked at an investment bank, and it was fact there too). It’s funny, I’ve had this convo a lot while working on this piece. There are some things in personal finance that are just commonly known sound advice, but we’re all so scared of personal finance that we’re afraid we’re somehow being screwed. Go do the research on your own, it’s great practice, and a good habit. But Vanguard is just the gold standard. It’s the least hype-y thing around.

        My husband had $8K put in Vanguard accounts when he was born, and thanks to a good run of the stock market, it’s how he paid for law school. It’s been solid that long.

        • LadyMe

          I’ve just read too many news stories about how the 80s and 90s dismantled a lot of consumer protection stuff, and how companies use “customers just need to be more financially literate!” as a way to pass the buck from systemic issues to individuals. I definitely have way more paranoia than is (probably) warranted towards the whole financial system, and things like this Wells Fargo stuff doesn’t help.

          Everything I’ve read about Vanguard is great. Just need to get over my own trust issues I guess.

          • MC

            I just read Pound Foolish by Helaine Olen (who also wrote The Index Fund) and that also scared me out of doing a lot of investing – but even she recommended Vanguard! But my big takeaway from the book is exactly what you said – the reason that personal finance is confusing/scary is because it’s designed to be that way, because that is what makes companies the most profit. So no need to guilt yourself over not trusting most personal finance advice – most of it is terrible, particularly when the person/institution who gave it to you is also trying to make money off of you!

          • G.

            I love her Slate column too.

      • heyqueen

        T.Rowe is another great discount brokerage firm.

  • Sweetie

    Personal finance is part of my job, and I gotta say you hit the nail on the head, Meg. Sharing this with everyone I know.

    • Meg Keene

      Aw, thank you. I was hoping I could get it mostly right. I did a bunch of research… some of it even for this article, not just as a weird hobby…

      • JC

        Thanks for the book recommendations, because this actually is my current hobby… :)

  • Lawyer_Chef

    Is there an APW post about how to consolidate finances when you get married? We’re stuck in the spot where we each have our banking systems set up the way we like them, and we don’t want to open a ton of new accounts.

    • LJ

      Seconded. Further complicated by my fiancé being an independent contractor with inconsistent income. I figure we’ll just keep each other “in the loop” with our own finances and keep going as is…. we don’t really feel an urge to consolidate yet, and we don’t own property together.

      • Michela

        My husband makes irregular income as a small business owner and we combined finances before our wedding- it was the best decision we ever made because we had time and space to sort out our joint finances rhythm and have arguments that didn’t end in one of us thinking “was this marriage a mistake??” (I worried about this because I tend to have a fatalistic brain sometimes; that comment isn’t specific to you!) Because T has such inconsistent money flows, we had months to practice before the wedding and got into a really great rhythm that is still serving us well. It sounds like the status quo is working for you, so don’t fix it if it ain’t broken!, but just piping it to say that combining early (if that’s your ultimate plan) might serve you well, too!

        • LJ

          We’ve been living in sin for 4+ years so yeah, I think the “if it ain’t broke” line is good (and I really don’t want to add MORE stress 5 months before the wedding)… but may be good to at least see if it’s worthwhile once everything’s died down.

          • Michela

            I totally understand. You know what is best for you, and you also know what amount of stress you can reasonably undertake. We combined finances about 9 months before our wedding during a slow season at work for both of us and before the wedding planning had ramped up to full effect, which is primarily what made it a successful journey for us. Definitely consider your home/work life before doing this to see if it’s something you can reasonably tackle without murdering each other ; )

          • LJ

            Yeah, I hear pre-wedding homicide is frowned upon ;)

          • Michela

            HA! I guess so… ; )

        • LJ

          PS would you feel comfortable sharing how you found that rhythm? fiancé tends to live in feast-famine style and is totally fine being poor for a month (never misses bills, but some months he lives like a king and other months he doesn’t eat out even once) whereas I prefer to have consistent budgeting, so I am kinda thinking that our “personalities” may be incompatible for joint accounts but that could be me just making excuses haha.

          • Amy March

            How does that work separately? Like, if you want to be able to go out to dinner every Saturday, but it’s a poor month for him, what happens? I don’t think it’s something that needs to be fixed omg right now asap or anything, but it seems like you might want to be on the same page with spending, and on the same page about how much you can each contribute to things. Like, what if you have a vacation planned and then he’s having a poor month?

          • LJ

            We’ve been together for 6 years and it’s worked for us. Like I said, he doesn’t miss bills and that includes savings accounts and things we hold important.

          • E.

            My fiance and I also have very different spending habits and what helps us is having a set amount each month for fun money. The rest is pooled and we discuss how it’s spent, etc, but the fun money we get to do whatever we want no questions asked. For example, this week D wanted to buy a couple things on amazon for the kitchen. I said I didn’t want to spend $20 on things we don’t need, he decided to use his fun money and get them, problem solved.

          • Lisa

            We do this, too. My husband is very much a spender, and I’m a saver. He also has some expensive hobbies (salt water aquarium, fishing), while mine tend to be cheaper (reading books from the library, walking at free parks). Having equal amounts of spending money makes us feel free to do what we want with it. Mine is stashed away for what I think will someday be a solo vacation, and he spends his to the ground almost monthly. It’s helped to make us feel like we both have some control over a small piece of the budget and allow us to do what we want with it.

          • Michela

            Ha! That’s interesting- I am the more risk-averse one of us but also the one who was living feast-famine because I’m the spender, whereas my husband is practically not risk-averse at all but lived very consistently and was the saver. Not sure my experience will be applicable, but I’m happy to share!
            Basically, here’s what we do: I get paid more than he does but he has more earning potential based on what seasons are big for him in his soccer business. Summer, for example, he could bring home $1500 in cash one week in addition to his (meager) paycheck, but fall season? We’re lucky if he brings home $100 in cash. Being risk-averse, I didn’t want to count on that cash at all because it’s totally unpredictable; essentially it depends on whether or not the families who sign up for his training happen to have cash on hand or if they pay online with a credit card. So we created a budget wherein all of our monthly expenses are covered by my paycheck alone. His (meager) paycheck goes towards savings. All the unpredictable cash he brings in goes towards paying down my hefty undergrad and graduate school loans, and sometimes towards one-off things like a weekend in Nashville or birthday gifts. This means that his irregular income doesn’t affect our monthly budget because all expenses are covered by mine. It also means the small guaranteed money we know we’ll get from his meager paychecks will go towards our savings account, which would be practically non-existent if my salary had to cover expenses AND savings. It also means that influx of unpredictable cash has paid down nearly $25,000 in student loans since April (!!!), paid for our pricey Mexican honeymoon, our wedding bands, and a car repair.
            It took us awhile to find our rhythm, but it’s working so well for us right now. Maybe a good thing to consider in your situation is how risk averse both of you are and how your partner will contribute to the household with his irregular income. It sounds like it’s already working for you, but if combining is your ultimate goal, you might want to find a system that removes some of the irregularity for the household but maintains it for your partner since he feels totally cool with that. Maybe he contributes the same amount to joint household + savings accounts each month regardless of his paycheck, but the “extra” can be for his fun stuff. This means your monthly budget won’t change based on his income (which sounds like a win for you), but he can still live feast-famine in his own hobbies with the extra or non-extra (which sounds like a win for him).
            Obviously I’m just a stranger on the internet so what do I know! But that’s how I see what worked for us maybe working for you ; ) Take it all with a grain of salt and know that you know what is best for you.xo

          • LJ

            Cool ideas! Thanks :)

    • APlus

      Consolidating our finances actually helped clean up our accounts a lot, so even though it’s a pain of bank appointments and moving around some of our automatic banking, the whole thing feels a lot more simple now than it used to. We only opened one new account, and that was with a financial investment planner, and I was actually able to close 2 accounts and transfer 3 to the planner.

    • emmers

      I think there’s an open thread about this– can’t go search for it right now, but I remember learning a LOT from that one!

    • Ugh that’s something we need to do at some point. We’ve consolidated the budget but not actually the physical (idk if that’s the right word since I don’t think the bank is literally storing all the dollar bills I have in a vault like Gringotts but it’s the best estimate I have) accounts. So we spend and allocate money according the the budget and then sometimes just move the money around between accounts when the one I pay rent from needs more money, for example. But it would be simpler to consolidate our accounts–or at least have a joint account somewhere.

      • Lisa

        Something that was helpful to us was that we took all of our banking information to the local branch of the bank with which we were planning to open our joint checking and savings account and met with a consultant there. She was able to help us set up the accounts and move the money around between them. I can’t remember if she even helped us move my husband’s money from a different bank or just showed us how to link the accounts so we could do it at home. Then she ordered our checks and debit cards from the desk.

        It was really helpful to talk to someone in person instead of trying to figure it out all at home on the computer. I’d highly recommend looking into setting up an appointment (or even just walking in if you can be reasonably sure of a slow time) to speak with a consultant who can help you.

  • Sara

    I recently decided I need to let myself off the hook with money guilt. I’m not deep in debt – I have a small balance on one credit card, but nothing too extreme, I own stocks, have a good 401k, I own my home, I have great credit and I have a steady job. And yet, every time I decide to go to meet some friends for dinner and then look at the balance on the card again, I get such guilt that I’m not doing enough. I’m currently going through an expensive time in my life (weddings, home buying, dog stuff) and it needs to be ok that I am allowed to treat myself while still being frugal. I’m not running out to buy a new tv or something, but I’m learning that grabbing a glass or two of wine with my bestie isn’t worth the stress.

    • Meg Keene

      You need to get the Mind Over Money book. I’m only starting to dig into it (though I’ve done a bunch of this work one on one with my coach already). But it deals with the shame and guilt issues, and solving the root causes, because until we solve the root causes, it’s just an endless cycle. It sounds like you’re on your way to breaking the cycle, and I have a feeling working on the money scripts playing in your head would be SO HELPFUL.

    • Eenie

      Our issue is so much of our socializing is spent at restaurants! I don’t want to cut that out, but it was a huge part of our budget. We give ourselves the money for a drink or appetizer at our weekly dinner out and that has helped take away some of the stress.

  • Ruth

    I am having a really hard time with this lately. My husband and I both used to work regular, salaried jobs, which made budgeting a breeze, because income was steady. Then we both lost our jobs. Neither of us have been able to find steady, salaried work that pays well – we are both currently freelancing in our respective fields. Freelancing is often painted like this empowering, entrepreneurial path, but in our experience, it sucks. We (particularly he, since he has the higher income skill set) have found some great good-paying gigs, but once they dry up there’s no telling how long it will be till the next one. I have no idea how to budget when our income varies so wildly from month to month. Having a savings right now seems impossible, because we’re basically in the hole, trying to use the flush periods to pay down the debt we incurred during the period of total unemployment (we had an emergency fund which we already used up)
    We are very fortunate in that we have almost 100% equity in our house, which we received as a gift from a relative, and have had to dip into this through a HELOC during lean times, however, I feel grossly uncomfortable living off debt like this, even though we can afford the payments.
    However, the idea of saving or even making a budget feels impossible while being in the red – and I have found financial advice books of no help here. Questions like, “how much can you afford to spend in a given budget area, like groceries etc…” feel mute when our fixed expenses (property taxes, car loan, health care costs etc…) are often greater than our income. We’ve thought about selling our house and moving to a part of the country that is cheaper, but that feels like giving up on ever finding steady work in our respective fields, particularly for my husband, who has a very specialized skill set (TV production) and NYC is basically where it’s at for that. It feels like freelance / contract / hourly unsteady work is becoming the norm for more and more Americans – but it seems like all the budgeting books / software etc… still assumes you get a regular pay check, and I’m just at a loss here.I am having a really hard time with this lately. My husband and I both used to work regular, salaried jobs, which made budgeting a breeze, because income was steady. Then we both lost our jobs. Neither of us have been able to find steady, salaried work that pays well – we are both currently freelancing in our respective fields. Freelancing is often painted like this empowering, entrepreneurial path, but in our experience, it sucks. We (particularly he, since he has the higher income skill set) have found some great good-paying gigs, but once they dry up there’s no telling how long it will be till the next one. I have no idea how to budget when our income varies so wildly from month to month. Having a savings right now seems impossible, because we’re basically in the hole, trying to use the flush periods to pay down the debt we incurred during the period of total unemployment (we had an emergency fund which we already used up)
    We are very fortunate in that we have almost 100% equity in our house, which we received as a gift from a relative, and have had to dip into this through a HELOC during lean times, however, I feel grossly uncomfortable living off debt like this, even though we can afford the payments.
    However, the idea of saving or even making a budget feels impossible while being in the red – and I have found financial advice books of no help here. Questions like, “how much can you afford to spend in a given budget area, like groceries etc…” feel mute when our fixed expenses (property taxes, car loan, health care costs etc…) are often greater than our income. We’ve thought about selling our house and moving to a part of the country that is cheaper, but that feels like giving up on ever finding steady work in our respective fields, particularly for my husband, who has a very specialized skill set (TV production) and NYC is basically where it’s at for that. It feels like freelance / contract / hourly unsteady work is becoming the norm for more and more Americans – but it seems like all the budgeting books / software etc… still assumes you get a regular pay check, and I’m just at a loss here.

    • Ashlah

      I can’t know for sure if YNAB is the solution for you, and it won’t magically make it okay when your expenses are greater than your income for the month, but it is designed to work with the money you have on hand. I’ve heard a lot of success stories from people with constantly varying incomes. Your situation sounds really hard and stressful, and I’m so hoping things turn up for you soon.

    • SarahRose472

      “Freelancing is often painted like this empowering, entrepreneurial path, but in our experience, it sucks.”

      I feel you hardcore on this, and how all finance advice seems to assume a regular income. We have lived on an extremely variable income a couple of years…I tried YNAB also and in principle, it should be able to accommodate varying income, but in practice I got too discouraged by the fact that the budget was simply telling me a fact I already knew, which is that we didn’t have enough money and needed to borrow or run balances on our credit cards.

      • Amy March

        I think that’s the bottom line. A budget can absolutely help you make choices about where to allocate your money, but when the bottom line is that you cannot afford your lifestyle, it’s not going to ask or help you answer the big picture questions like do we get a roommate, do we sell, do we rent this place out and move temporarily, how long are we going to keep looking, etc.

    • emmers

      Ugh. I’m sorry! That is rough! Since you mention having some flush periods where you try to pay down debt, one tiny suggestion is to set aside some of your money (like $500 or $1000) during those periods, even while you’re still throwing the rest to debt. We’re paying down debt too from some crazy circumstances, and having an emergency fund helps us not add to the debt when the inevitable emergencies happen. Obviously your mileage may vary (since if you have fixed costs that are exceeding your budget, that is just rough), but just one thing to consider for the flush periods.

      • MC

        And in case the idea of saving $500 or $1000 sounds intimidating – I’ve had periods (like when I was in AmeriCorps for a year) where I saved only $20-$50 at a time and it still gave me a nice cushion for going into less debt. Again, it’s not always possible, but I know some people who don’t save anything because they don’t feel like they have “enough” to save – any amount is enough!

  • justme

    I grew up in a family that was very midwestern in our lack of consumerism and reuse of things. I’ve been told many times that I was the only kid someone had ever met who looked at toy and clothing prices and said hmm, this one is too expensive I don’t want it THAT much. So maybe that is why I just don’t understand why people make money so difficult. Spend less money than you make. Max out retirement (put it in retirement year funds). Then have a decent savings put away, then pay off loans. Then save more. This was how I saved thousands of dollars a year while in grad school without trying to.

    I’m not sure you need books and programs for this. These are just people trying to make money off you when the point is to save money. And like don’t you have enough books and things to do already anyway?

    (And my personal pet peeve is people suggesting that buying a house is a good way to save money, or earn equity, or something, that is not true, buying a house is a good way to buy a house and nothing else, I mean did no one learn anything in 2008 for goodness sake?!)

    • Amy March

      I think that all sounds very nice for you, and it is fantastic this is something you find easy. It’s also, sincerely, wonderful when you can spend less than you make, but isn’t reality for everyone. It’s not a given than putting a little away every month ever amounts to decent savings, or that you can both max out retirement and buy food.

      You probably don’t need books and programs, because this isn’t your problem and you got a financial education at home. That doesn’t make it simple for everyone. I think of it like Weight Watchers- are plenty of people able to maintain a healthy weight without it? Absolutely. Is it a really useful tool for those of us who struggle with it for whatever reason? For sure.

    • Jessica

      You probably don’t mean to, but this is a super money-shaming comment. Not everyone in the midwest was taught those lessons or values. Not everyone was taught about retirement, or can make ends meet and save everything.

      People also have different priorities, and you should respect that. Some people are more into stuff, and that is OK.

    • justme

      I should clarify, that as with math, I think a substantial part of the problem is that there are a lot of people who make money off of pretending this stuff is hard. Like interest and things like that are all shrouded in mystery because people make money off of pretending they are mysterious. . . And obviously a lot of people profit off of pretending that buying houses is good for you. It just bugs me to see the same attitude promoted over and over again.

      • Amy March

        I’m not seeing that attitude promoted here at all. This is a post about how this is doable, and achievable, and here is information and resources to help you do it. And it is also hard for many people to figure out.

        • Meg Keene

          Also, I’m not making any money off this post. Unless you buy a book on Amazon though our affiliate link, then the company might make $0.20 ;) These are just resources that I think are helpful.

    • Meg Keene

      I think it’s great if you don’t need anything to help you with finances. That probably means you have a healthy relationship with money. But a lot of us don’t have that, and do need resources. (I also grew up as that kid, and while it helped me save money, it also caused problems with how I approached money.)

      Also, being able to save money is a lucky (possibly midwestern!) thing. We live in an area becoming more expensive all the time, where our daycare bill is significantly higher than our mortgage. We save money, because we earn good money, but for most folks in expensive areas, doing so is not easy.

      But beyond all that, learning about investments is important. Turns out 401K’s are not always the best investment vehicles, for example. Yes, max out whatever your company will match, but beyond that, they might not be best for you… but everyone uses them. So doing the legwork on investments is a good thing.

      • It’s not solely a Midwestern thing, it’s a low cost living thing. I grew up in a big Midwestern city, I live in a big Midwestern city where affordable housing is nonexistent.

        “Spend more than you make” is easy when you make a nice salary, and you don’t have to spend 50% of it on housing, and another 30% on childcare. And there’s a lot more of that type of stuff happening than the original commenter is admitting.

      • Kara e

        Yup. Money is “simple” in some ways, but it isn’t in others. I’m really good at “saving” (I also saved enough money in grad school to come out ahead + take a 2 month break before starting my real job) – full funding + a cheap place to live majorly helped. But I am really not so great at “investing” since it may not be there when I need it – particularly high risk investing (which leads to….high rewards). It was tough for to acknowledge that I HAD to money to invest because I had adequately saved for an emergency — and that I really needed to do so or I would lose against the markets. I quite literally told my brother (a financial sales guy) to pick me three funds for my roth because I was so stressed about picking a good option.

        This attitude totally ties in with the findings from study a few years ago (summarized here): http://www.cnbc.com/2014/08/20/helping-women-bridge-the-financial-literacy-gap.html

    • Lmba

      Having been extremely broke in the past, and very not-broke in the present, this comment seems incredibly simplistic to me. The idea that someone should obviously and easily be able to save thousands of dollars a year while in grad school – without trying! – well, there are certainly some very lucky people for whom that is possible. And if those very lucky people pair their luck with smart choices, then they will be in great shape, as it sounds like you are.

      But here’s the thing: not everyone has access to low-interest loans, or affordable tuition, or a parent’s house to live in while in school, or scholarships, or lucrative TA work (wages vary WIDELY), or whatever. And not everyone lives in an affordable location, or has only themselves to support, or is looking for work at a time when the job market is favourable, or has an equal chance at getting hired in the first place, or can take advantage of low-interest rates when buying a home, or whatever. The idea that, because it is easy for some people to save $$, it is difficult to understand how someone else may find it challenging is… An idea that demonstrates very limited understanding of the varied financial realities people experience.

      To say the least.

    • heyqueen

      I agree with you. Money is really simple, but a lot of people don’t see it that way. I grew up with very educated upper middle class parents who taught me about money and allowed me to foster an extremely healthy relationship surrounding money and credit cards. I know that’s a huge privilege that gives me a leg up on like 90% of people in this country. A lot of stuff that seems like common sense to you and I is way over the heads of the average American. We really should be teaching the basics of money and investing to kids before they graduated high school. There are a lot of people who ARE just trying to make money off people, but there are also extremely valid and helpful resources with books and podcasts. All things you can download for free or check out in your local library.

      Also, money shaming? Is that really a thing?

      • Amy March

        I just don’t understand how you can with a straight face claim that money is really simple, and then in the next sentence acknowledge that it’s only a great education you got about money that made it feel simple for you. I’m not sure if either of you intend this, but it really demeans people who struggle with money to declare that it’s simple.

        • heyqueen

          I think I qualified my statement by admitting that I have some privilege in my education with money. Maybe I wasn’t clear enough?

          • Amy March

            I thought you were plenty clear! It’s just that you seem to think money is really simple, and I disagree.

      • Marcela

        I think financial concepts are simple and implementation is the hard part. There’s a lot of misinformation out there that complicates things as well.

    • Violet

      I think your apparent confusion may lie in getting caught up in the difference between simple and easy. You say this stuff isn’t difficult, and sure, I agree the basics of personal finance *can be* relatively uncomplicated, or simple. (Though once you get into interest rates and stuff, we are talking about at least middle-school level math, so, you know, YMMV when it comes to what constitutes “simple.”) That does not make them easy to implement in practice, though. Lots of things in life are fairly simple: spend less than you make, brush your teeth daily, get enough sleep, check the weather before heading outside to see if you should bring an umbrella, eat the same amount of calories as you burn, if you don’t have anything nice to say, don’t say anything at all. Etc. But actually doing all those things within the constraints of real-life is where it gets hard.

      Maybe you don’t struggle to implement the basic guidelines of personal finance. But can you think of just one thing in your life that you know what you *should* do but struggle in practice? Maybe even because of circumstances beyond your control? Now just apply that here. Unless you are literally a perfect human being, I’m sure you’ll be able to come up with an example that helps you emphasize with (even you still can’t fully understand) people’s money struggles.

    • ElisabethJoanne

      Another factor that makes money “complicated” or “simple” for different people is just personality. My siblings have the same parents (highly educated, upper-middle class, small business owner) as I do, but took in a lot less informal financial education than I did, just because they’re not as interested in numbers and laws as I am. On the flip side, they are more musical and athletic.

      • emilyg25

        Yes! My brother is a saver, always has been. Likewise, I’ve always been a spender. When we were kids, when we’d get allowance, I’d run right out and spend it on crap. He saved up and bought a Nintendo and a giant trampoline.

      • Lisa

        Great point. Some people are just more impulsive or conservative than others.

        Also, I’m so happy to see you here! I was thinking about some commenters from my early days at APW and was wondering how you were doing.

    • Caitlyn

      You seem confident that finances are quite simple and you understand them – yet your comment about real estate investments and what happened in 2008 completely misses the point. The main issue in 2008 wasn’t that homes weren’t good investments. It’s that people were being allowed to purchase homes when they could not afford them because of really shady mortgage industry practices. SO many people that home prices were skyrocketing way above what they were actually worth. The bubble burst. It’s now much more difficult to get a mortgage and home prices are actually much more in line with what they are worth. Not saying ALL homes are good investments, but I am saying that your claim that “buying a house is a good way to buy a house and nothing else” is really simplistic and frankly downright false. My home was an AMAZING investment that I am incredibly proud of. It took me years of single minded focus to be able to make this purchase. It will change the course of my family’s finances for years to come. So it’s a personal pet peeve when people suggest that buying a home is never a good investment.

  • emilyg25

    I have a question about retirement accounts. My husband and I both work at places that offer a 401k with matching (technically mine is a 403b, but same diff). So we throw all our retirement savings at those. But would it be better to instead invest only enough in those to get the match and then use the rest of the money to fund a Roth?

    • Nicole

      That depends a lot on your income, age, and how/when you plan to use the money, as well as how much you plan to save. The 401K reduces your tax liability now, which is great if you’ll be in a lower tax bracket when you retire. The ROTH is great if you expect you’ll be in a higher tax bracket when you retire than you are now. It also has an annual limit of just $5500, so if you’re saving more than that, you’d need to put it into the 401K anyway.

      • emilyg25

        It’s complicated because I’m 30 but my husband is 50. I expect we’ll be in pretty much the same tax bracket when I retire because while I’ll make more than I do now, he’ll have retired.

        • Amy March

          Do you have a financial adviser? That’s a different enough retirement threshold that it might make sense to talk to a pro.

          • emilyg25

            I get one through my work. Just called and made an appointment!

          • Kara e

            Nicole = good advice. And just make sure it’s a fee-only advisor! Ask about stuff about mandatory withdrawals and all that too. Also, eligibility for a ROTH caps out around 70, so it it isn’t the best vehicle for everyone. My org has really low fees on our 403b, so I max it out and don’t use an IRA for now.

          • Katharine Parker

            In 2016, caps on ROTH eligibility are $116,000 for single/head of household, and $183,000 for married filing jointly.

          • Kara e

            Thanks, Katherine. I really should have validated that one! I think that was what I was making when we were last eligible.

          • heyqueen

            Seconding an advisor that has a set fee. You don’t want someone making money off you via commission and pushing stuff on you that you don’t need.

            Here’s a link to NAFPA that will help you find one in your area. Good luck!

            https://www.napfa.org/

    • Lisa

      JL Collins suggested the following to maximize savings in his book:

      1. Fund any employer retirement program to capture the match
      2. Fund a Roth/Traditional IRA to the full amount annually
      3. Invest leftovers in Vanguard mutual funds

      The issue is that unless you know that your retirement plans offer lower fees, you might end up losing out on money by investing there. I contacted my company recently (TIAA-CREF) and found out their fees are about 1.12%. Compare that to .18% at Vanguard, and that money really adds up over time.

      • Lisa

        Speaking of, this reminded me that I’ve been meaning to cancel my automatic 403(b) GSRA contribution so that I can fund something with lower fees instead. Heading off to do this right now!

  • savannnah

    My fiance and I are in a weird but im sure common situation. When we were making like 50k (or less) together, we never had CC debt or needed a budget, we just worked with what we had and were careful. Now that we make 150K a year it’s become so much more complicated and fraught. Yes, we have a budget, 401Ks, Roth’s, mutual funds, savings accounts, wedding account and emergency funds- but we also have $12,000 in consumer debt and I am constantly budgeting and re-budgeting. When there was less money, savings and priorities were clearer, and now it all seems cloudy.

    • Lisa

      Lifestyle inflation is totally a real thing that can creep in unexpectedly. I’m being careful to watch our budget right now because my husband is making more money, and I want to be sure we’re still focusing on our top priorities and not overspending because we feel like we suddenly have more.

      • savannnah

        I’ve been reading up a lot on it and I think part of my struggle is that we make a lot more money right now but we also live in a much more expensive area (not as an upgrade but part of the new jobs) and so our budget ‘feels’ tight now when I know it’s not because I can go into the grocery store and not think too much about food prices, which used to give me lots of anxiety on our previous salaries.

    • Amy March

      I think that’s definitely common. As your income increases it’s easy to think “oh yeah I can afford to spend a little more” on literally everything in your life, until all of a sudden things are out of whack. And there’s less motivation to say “nope, can’t afford this at all” when you’re making enough to pay the interest on the consumer debt without immediate hardship etc.

      • Michela

        I totally feel this dynamic. We’ve started telling ourselves, “we can each have our ‘thing’, but we can’t have ALL the ‘things’.” Right now my thing is treating myself to coffee mid-morning because it gets me out of the office in the job I hate and feels like a tiny treat. But I can’t have the coffee and the spontaneous shopping trips and the expensive make-up and the weekly drinks out with friends and etc. etc. etc. That mantra seems to help us avoid that increase on everything in our lives that you mention.

    • Violet

      Oh gosh, I’m sure that’s very common. When you don’t have any discretionary money, there is very little decision-making about what to do with money. The answer is (almost) always “no.” Once your income goes up, you have that many more decisions to make about what to do. We’re now in a position of having to decide how much to put where, and it feels like it’s possible to make a lot more mistakes than before, when it was just “Pay the bills, save the remainder.”

      • MC

        YES. This is where I am now, too, and this is a really helpful way of thinking of it. Now that the answer isn’t always “no,” but it’s not always “yes,” there are so many more things to think about.

    • Marcela

      I worry about this so much. Right now we live on my salary while my husband is in school, but come June he’ll be working and our household income will at least double if not triple. I worry about what that means for our savings rate.

      • savannnah

        Yeah, It feels bizarre because we are saving/have locked away more money than I ever had before but we also are spending too much.

        • Amy March

          Would it help to take a chunk of those savings, pay off the consumer debt, and stop spending on credit cards? Not, like, forever, but as an initial re-calibration about what you actually have available to spend?

          Idk, obviously I know nothing about your actual situation at all, it just struck me that you have all kinds of savings- I think you can consider the 401K, roth, mutual fund, savings account, wedding account, and emergency fund all savings of a sort so that’s 6 different ways you are saving, and yet you still have consumer debt.

          • Nicole

            Consumer debt is often really expensive because of interest rates, so I’ve heard people say, “that’s an emergency!” to explain why you might use an emergency fund for it. It doesn’t address the spending too much part, but once you figure out that so that you’re not spending too much in the future, it is probably worth throwing everything you can at paying it off fast.

          • savannnah

            We did discuss this- I’ve never had this issue before but my fiancé has been bailed out by his mom for a similar amount earlier in life and I kinda want us to pay it off month to month so we don’t do it again (like feel the pain) instead of bailing ourselves out. That might seem crazy but we’ve helped ourselves out by transferring the debt into zero interest accounts until the end of 2017, which is our deadline for paying it off. We also stopped used the credit cards unless its as a filter for our debit cards for rewards like airline miles. I’m hoping that helps us have a different framework around the credit cards and our spending habits.

          • Amy March

            I don’t think it sounds crazy! Just potentially risky, if you don’t make the target.

          • Lisa

            By the sound of it, they could still pay the balance off out of the emergency fund though if they don’t meet the 12/17 target though.

  • WorkingThruMoneyIssues

    I have a lot of shame around this topic, and money is by far the number one issue of conflict in our marriage.

    When money can cover the bills and some extras without much effort, our relationship is easy and wonderful. And when it can’t, it feels like a minefield. And it’s a whole lot about our differing mental relationships to money from our origin families (which are both problematic in their own ways).

    I also have a lot of shame about our relationship to credit cards. I admire everyone here who diligently uses credit cards for regular expenses and then pays them all off at the month…we have two credit cards nearly maxed out that we’ve been running a balance on since January.

    It’s a long story (sudden, prolonged drop in income without any cash savings = debt) and we are in the process of straightening things out, but we have more work to do. Both in terms of the money itself and continuing to work out our relationship with money.

    • emilyg25

      I can’t handle credit cards. I maxed mine out in college and had to enroll in a debt management plan to get my finances back in order. I still have a really hard time controlling myself with them. You’re not alone.

  • AGCourtney

    Thanks for writing this, Meg! I love the finance posts on APW. I’ll check out some of those books.

    I’ve always prided myself on being really good with money – and while I still am, I’m trying to make the next step from just being frugal and saving to preparing more for the long-term, i.e., investments. So this was really timely!

    I’ve been thinking a lot lately how grateful I am that we’re actually financially comfortable right now. (We don’t make a lot, but we live in a non-urban area in the Midwest, so the COL is much lower.) I grew up very poor, so on Thursday, being able to get a couple things at IKEA (a pillow, a little train set for the kiddo) and go to Panda Express afterward without a trace of anxiety just brought me such joy. We’re evicting my dad, so that rental money is gone, and the last of the food stamps ran out in August, but I know we’ll be fine. It’s such a relief compared to how I grew up (my sixth grade counselor suggested my mother to not discuss financial issues in my presence because I was frequently panicking that I wasn’t old enough to get a job) and how I was in college (on scarcity mode in an effort to minimize student loans and maximize saving for the house we now live in.) Financial contentment is a new, fun thing to experience.

    I will say YNAB works really well for us. Our free student key expired a few weeks ago and we’ve been twitchy without it, so we’re going to try nYNAB and see how we like it.

  • Jess

    This makes me feel a lot more comfortable with forcing the “Let’s meet with a financial planner” conversation.

    We’re in an ok spot with money day-to-day, but the “figuring out what we want to save for and how to save for it” conversations are really tough.

  • joanna b.n.

    My biggest question, and one we intend to take to a financial advisor as soon as we can figure out the whole system of picking one, is what is the point of investing in our situation? We are saving hardcore for emergency fund/a down payment for a house, we have retirement savings plans, and then the rest of our excess is going to paying off student loan debt. I can’t imagine wanting to divert money from any of those towards an investment. So is investing really just intended for once you’ve already hit those three areas sufficiently?

    • LJ

      Depending on the investment, you can withdraw for the house downpayment when you need it – and it may even have notably higher returns than your current plan.

    • LJ

      Also, a LOT of people’s RRSPs (retirement savings in Canada) are in the form of investments.

    • Amy March

      So, you are investing. In your retirement savings plans. Right? I think it’s important to invest for retirement, but if you’re doing that and saving I don’t think you necessarily need to divert money into even more investments.

    • LadyMe

      My understanding is interest rates matter. Obviously you want an emergency fund ASAP. If you pick long term investments, you should be able to get 6-7% interest. If your student loans are charging you 8% interest – pay the loans off first!!! If you have a good student loan rate like 4-5%, go ahead and invest. It’s why I’ve been waiting to invest until I can finish refinancing my student loans from their 8-9% interest.

      • LJ

        “avalanche method” of paying off debt encourages putting money where the highest interest is after the minimum payments are done.

        • heyqueen

          I think the avalanche method is the absolute best. I know proponents of Dave Ramsey really love the snowball method ie paying down your smallest debts first so you can have the moral victory, but I just cringe at all the extra interest you accrue with the higher value debs, and it gives me an ulcer.

          However, at the end of the day, the goal is to pay off the debts regardless of method.

          • LJ

            Much like diets/nutrition, the one that’s best is the one you can stick to :) I agree re avalanche though, it’s nice to know that you’re not paying more than you have to.

          • flashphase

            I used to think avalanche was the way to go, but paying off one small student loan before tackling the massive consolidated one gave me a real feeling of I CAN DO THIS!!! rather than feeling demotivated by chipping away at a huge amount of loan debt where it felt like I was never getting anywhere.

        • flashphase

          Jumping back in for one question –

          • Ashlah

            That’s such a personal decision, whether to consider student loans a joint expense or an individual one. From a financial standpoint, it definitely makes sense to focus on his higher interest loans first. In our case, for anecdote’s sake, I paid off my loans on my own (during our engagement), then chose to help him pay off his loans. He felt weird about it, but I felt like it was a joint burden. Because our finances were still separate, the deal we made was that I would match whatever he paid. Once we combined finances, his student loan payment became a true joint expense. (And now they’re all gone, hooray!)

            If we’d had fully joint finances earlier, we probably would have focused on his loans first as they had higher interest than mine.

            If you’re comfortable viewing them as joint debt (whether before marriage or after), my suggestion would be to continue making the minimum payments on yours, and throw any extra payments at his to save on interest.

          • flashphase

            This is so helpful, thanks! I mostly think of the loans as ‘our’ expenses – after all, those loans helped us get the jobs we have today and we both benefit from those salaries – but I’m not 100% there emotionally! Perhaps after we get married and have joint accounts I will be :)

          • flashphase

            Thanks to this thread, we had a conversation about this last night! Turns out my FH feels strongly about paying off his loan debt – as a sort of badge of honor and an ‘adult thing I have to do.’ But he wants to help pay off my student loans after we get married so that we can discharge some of our debt more quickly. Feels like a win-win :)

          • Lisa

            I completely agree with @disqus_SU83Haapqj:disqus here. If you consider them to be joint expenses, you should concentrate efforts on the highest rate loans first.

            For us, once we were married, our financial futures were tied together. I view the loans as “our” expense that we have to decide how to pay off. However, I view all money that comes into our house as “ours” and that needs to go directly towards family accounts and priorities. If your finances are more separate, then it might make sense to pay the loans individually out of your own accounts.

    • Lisa

      Some people invest their emergency funds/house payments in the market or purchase CDs and only keep enough on-hand to cover another month or two’s worth of expenses. (Mr. Money Moustache advocates this approach.) This would give you a better interest rate than a traditional savings account, assuming you don’t need the money right now and can let it grow over several years. Otherwise, it sounds like you’re investing in retirement already and are paying down high-interest student loans. Unless you can get a higher rate for investing (8% is standard over time) than the interest rate of your loans, it’s better to pay those down first before directing money towards asset growth.

    • Rowany

      The other thing to note is the default investment vehicle your company puts you in may have higher fees and expense ratios but with no improvement in yields. It’s good to understand investing and look into what funds your company offers and switch to index funds if possible. Spending an afternoon checking that out can have a huge impact on your retirement funds.
      It’s also good to set aside some money into Roth IRAs in your situation, even just a little bit, since eventually your income may be above the contribution limit.

      • ART

        Yes – and a lot of the employee retirement account companies do a good job of putting those expense ratios several clicks deep on whatever your online interface is, especially with Target Date funds which are not single mutual funds but a basket of mutual funds, each with their own expense ratio. I was horrified by the offerings in my 401k, other than the index fund.

        The other thing about Roth IRAs is that in addition to being over the income limit someday, there’s also the annual contribution limit to the account (regardless of how you invest it), so if you miss this year, that’s $5500 you can never get into that account down the road, even if next year you have a spare $11,000 to deposit (that’s extreme but I hope illustrates the point).

        • Katharine Parker

          The eligible year for Roth IRAs ends April 15 of the following year though – so if you get a windfall before April 2017, you can deposit $5500 for 2016 and $5500 for 2017!

          • ART

            Yes! That’s true. I have mine on auto deposit and I check in early April to see if I didn’t hit the max for the previous year and just ask Fidelity to do it for me. Works great.

    • emilyg25

      I prefer the Dave Ramsey method, where you pay off all debt before you start seriously investing. Once your student loans are paid off, then you can invest the money that was going to that.

  • JC

    Books! You glorious, money-planning, analyzing, budgeting books! Just what I was hoping for when I saw this was a finances post.

  • Rose

    I do just want to say that there are reasons for keeping finances semi-separate that aren’t related to divorces. We do that–some shared accounts, some separate. I know that there’s no legal meaning to it, but it helps us to feel like we’re each in control of our spending. I don’t worry when she buys something that seems unecessary to me, because I know she can handle not overspending her accounts, and I don’t feel guilty spending money on myself, because I know it’s coming out of my pot. If our financial situation changes–one of us looses a job, or one stays home with kids, or whatever–of course we’ll adjust how we share our finances. I don’t see that using one system now locks us into “separate forever”. We are committed to building a life together, including financially, but at least for now we can do that just fine with semi-shared accounts.

    • heyqueen

      I really like the joint accounts but also maintaining a personal account for “fun money” or savings beyond joint contributions. Like you said, it takes the guilt out of it.

    • emilyg25

      Yeah, we do joint accounts for almost everything with small allowances in our personal accounts every month. We also each have an individual credit card. But all our expenses like mortgage, groceries, eating out, insurance, etc. come from our joint account.

  • Things to work on…

    I got the bond price question wrong – I thought they were talking about new bonds, not the bond market.

    Anyway, I’m pretty financially literate. I had a 6 month emergency account when we got married + almost 6 figures in retirement savings. And no debt. Our 30 year mortgage is on track to be paid off at least 12 years early and we’re going to be ok for retirement. Our kid’s 529 is decently well-endowed.

    But, after 4 years we still do not have joint banking. We have access to most of each other’s accounts, but have kept it separate (thanks, inertia and banking privacy rules), which means I never have the whole picture of where we are on a day to day basis – and it makes me anxious when I have time to think about it. We’re really got to fix that. And up our charitable giving game (the one area where we aren’t quite on the same page). And also, YNAB and Mint both have failed to work effectively for us – they aren’t able to be nuanced enough– and mine doesn’t play nice with my banks. Open to other tools for budgeting and planning.

    A great article on financial risk risk aversion in women:

    https://www.washingtonpost.com/news/parenting/wp/2016/09/19/how-parents-can-help-their-daughters-avoid-the-financial-gender-gap/

  • Kara e

    I know that this is at least partially a blurb for GYST, but many large companies offer some sort of legal/financial advice package as a freebie for employees and includes living will and last will and testament templates for free. Ours is WorkLife4U (or something like that) and my hubby’s company has something similar. If your net worth is under around 2M and your situation is relatively uncomplicated, I’ve been told you don’t really need something “special.”

  • Cellistec

    I always love the personal finance discussions on APW! That’s what got me hooked on YNAB, for starters.

    I manage the money in our household, and what stresses me out most is the credit card cycle. Basically, we travel a lot, partly fund our travel with our credit cards, and pay them off so aggressively that we don’t have enough cash left for regular expenses, which we then end up…putting on our credit cards. I know the answer is probably to travel less, or to do the travel-hacking thing I never got a taste for, but travel is what makes my husband feel like he can survive his job. And to be fair, I have a hard time saying no when friends and relatives invite me to go on a trip with them. So it’s a choice between guilt + money stress vs. guilt + resentment, apparently.

    • Amy March

      I think it’s a choice between spending more than you have, and saying no to things you can’t afford? If you don’t want to say no to the travel, you have to say no to the day to day things. I don’t think travel has to be automatically what gets cut, which is why my next trip is booked and my car is 12 years old :)

      • Cellistec

        Yeah, that’s a good point. I mean, it’s hard to say no to groceries, but we do have earmarked budgets for alcohol and coffee, so maybe that’s a place to start. ;)

        • Lisa

          It might help to look at what your fixed monthly expenses are (what is necessary to survive like rent and groceries) and what is flexible. Travel could be lumped into either category depending on how you view it. However, if it becomes impossible to cut your flexible accounts any lower, and you’re still overspending each month, you might have to revisit the necessities and determine which ones you can live without. Could you live on rice and beans? Move to a smaller apartment? Travelling less is also an option, but it doesn’t have to be the first fixed expense that gets cut.

          What I like about YNAB is that it forces us to discuss our priorities. Those are what get funded first in our budget. There might be some months that there is less or no money getting funneled into toiletries or clothing because it’s more important for us to have a nice dinner out or go camping. Maybe it’s time for another discussion like that?

          • Cellistec

            That’s the great thing about YNAB- we can see our fixed costs easily, and they get prioritized. We’re not buying booze instead of paying the utilities, for example. But since we use our credit cards to fund much of our travel, AND we don’t log our credit cards in YNAB, it’s easy to ignore the mounting debt until it gets intimidating. So maybe we should bite the bullet and put the travel into YNAB too. Ugh, what a thought.

          • Lisa

            We have a “vacation” category, and after rent, it’s the single largest-funded category in our budget. Travel is a priority for us so anything directly related to that goes into that category. We used it to buy tickets to Seattle for a friend’s wedding this winter or to pay for camping sites at a state park. It’s important for us to log all of those transactions, too! We treat our credit cards like cash so anything that’s being spent needs to come out of the budget.

          • Ashlah

            Absolutely! Treat travel savings just like any other bill and prioritize it in your budget. Maybe you’ll still decide that going into debt for it is okay (or maybe you’ll figure out you can save enough that it’s not necessary), but I imagine it’ll at least help you take on less debt when you travel if you’re holding yourself accountable in your budget.

  • HarshTruth

    I have a lot of shame around money, so thank you for the suggestions on books dealing with that Meg. I grew up in a family that felt middle class but was probably more lower class – like we had a house but my parents had insane credit card debt trying to give us kids the things they didn’t have. I didn’t learn anything about finances from my parents other than “pay the important bills first and figure everything else out later”.

    As an adult, I still haven’t conquered my money issues. I’m a high earner, but I live check to check. I don’t even have a month’s salary saved, but I’ve got a few thousand in savings & a couple of retirement accounts. I have 2 credit cards with balances higher than I like, but I have 3 others that are fully paid off each month. I still rent. In a lot of ways I feel like a financial failure, even though from a salary perspective, I’m doing great.

  • Kayjayoh

    What has been very difficult for me was moving to a very expensive city shortly after getting married. My wages went up quite a bit, but the cost of living (and especially the cost of activities that I enjoy) went up even more. My husband and I have mostly been dividing the costs of everything pretty evenly, but I am starting to get to the point where I need us to sit down and evaluate how this works, without guilt. Right now, a huge chunk of my paycheck goes toward household stuff, then toward paying for the hobbies that got expensive when we moved, and then I end up with very little left over for anything else. But I also contribute quite a bit to the household in terms of the chores/emotional labor. I keep the budget, pay the bills, do the taxes, etc. So it may be time to make our household $$ contributions no longer 50/50 in light of that.

    The tricky thing is figuring out the dollar value/percentage of our household economy my labor is worth. And figuring out any adjustments to our monthly budget following this. (Fortunately, we are about to refi our mortgage in such a way that we will be saving about $200 a month for the life of the loan, and making up the closing costs in about 3 years.)

    • Amy March

      Do you need to figure out the dollar value your household labor is worth? This seems like the perfect opportunity to actually go fully joint, and think of everything as “our” money and “our” expenses.

      • Kayjayoh

        That’s a possibility, but it isn’t the only option. As such, I like to be able to think about it from all angles.

    • Sarah

      My partner and I measure our contributions to our family in terms of time/effort, not dollar value. i.e. currently we work similar hours so we split domestic and emotional labour fairly evenly, even though he earns tonnes more than me; last year, I was working longer hours (but still earning less) so he did more of the housework. Since we contribute equally to the household, we deserve an equal share of the money we as a team earn – so we each get the same amount of “pocket money”, and the rest of what each person earns covers the household expenses etc.

      Not saying this is the one best way to do it, this is just our way of thinking about it that makes sense for us. But if you’re in a situation where you’re both working full-time but you’re also making a lot of non-financial contributions yet ending up with very little of your own money, it could be a helpful way for you to think about it too.

    • Lisa

      It sounds like you’re still keeping all of your money separately if I’m reading this correctly? Would it make sense to move to one pot of money and evaluate the spending choices based on what percentage of your budget they take up instead of saying whose salary pays for what?

      • Kayjayoh

        We have three pots, actually. Each of us gets our paychecks deposited into the checking accounts we’ve had since forever. (We also have our own savings accounts, likewise since forever.) We also have a joint account that we started when we moved in together, that covers all the “household” expenses: food, utilities, home repairs, furniture, travel we take together… Pretty much all the big basics in life are paid out of that, and we pay into it equally.

        What is left over in our personal accounts is what we use for “me only” expenses. Our own clothes. Classes. Our personal computers, phones, (and phone bills). Gifts.

        It is possible that we might someday switch to having our paychecks go into the household account and then we “pay ourselves” into our personal accounts. But there is going to be some bank switching in the near future, so I’d rather just do all the changes at the same time, rather than have to change my direct deposit twice.

        • Lisa

          That makes some sense; I totally get delaying until you’re already doing the other shuffling around.

          In the meantime, are your salaries comparable? Would it be possible that you only pay in a percentage of your salary based on what it is compared to his (if he is making more)? Are you both equally bearing the “female tax”? (Paying for disposable menstruation products, make-up, bras, etc.) Maybe a re-evaluation of these would be helpful? Or perhaps you could say that instead of keeping whatever is leftover after you each make an equal contribution, you could keep $X (whatever is fair to you both), and then the rest goes into the household pot.

          When we first combined finances, my husband wanted to keep any income that wasn’t our principal income separate for personal expenses. However, this wasn’t a particularly equitable system since he makes about 1/3 of my salary as his principal income and makes significantly more at his “side job” (teaching music lessons/playing gigs) than I do at mine (retail). This inequality meant that I had significantly less disposable income than he did because most of my money was going to paying our living expenses. We had to readjust our expectations and eventually decided that all money would go into one pot, and we would receive a monthly allowance from there for discretionary spending. I know my husband would like to go back to the original strategy because he benefited from it much more than me, but I prefer to have all of our cards on the table so we can make informed choices about our money together.

          It’s definitely an on-going discussion, and I don’t think there’s a permanent or best solution to it. We’ll keep re-visiting what we’re doing and checking in to see if it’s still working over the years.

        • Jess

          This set up is pretty close to what we’re planning on doing! I’m not super concerned about equitable “into the pot” vs “my $” yet, but right now our efforts are really really equal in terms of time & energy, and our pay is pretty well aligned.

          Thanks for the reminder that we should probably figure out how to manage that later, too!

  • heyqueen

    This is semi-related, but I’d love to see like an open thread about couple’s financial decisions and how that affects what they will teach their children about money. With everything that we’ve learned as adults, how are we using that knowledge to benefit kids (if you have them/want them).

    • Ashlah

      That would definitely be an interesting thread. I haven’t talked to my husband much about that, but I actually like the idea of involving the kid (when they’re old enough) in the family budget. (This is assuming we’re still in a comfortable financial position. Otherwise, I would not put family financial stress on a child). I think it could be beneficial to show them the budget categories and help them to understand why we can’t afford X right now because we need to allocate this much to Y. I know some people like to keep the family finances sort of secret from their kids, but I think transparency would make money much less confusing and fraught once they have a paycheck and expenses of their own. I would be very interested in teaching them how to budget their allowance, maybe giving them their own budget file in YNAB.

      • heyqueen

        Transparency with money is so important. I think one reason why people grow up to have a complicated relationship with money results from our parents making it this very secretive affair. People are still holding on to the “it’s not polite to talk about money” adage. Finances are the number 1 reason for divorces. So yeah, we need to talk about money.

      • Michela

        Yup! I also think the language we use to describe these things to kids is so imperative. When my parents told me they “couldn’t afford” xyz, my fatalistic brain would worry we’d be out on the streets in a week’s time. What my husband and I say instead is “that’s not in the budget right now”, which seems less apocalyptic and more intentional. It doesn’t mean we can’t afford that steakhouse dinner; it means it’s not in our budget so we’re choosing not to indulge in it. Maybe kids wouldn’t perceive that nuance, but that small shift in language has been a huge wake-up call for me and my money anxiety.

        • Amy March

          My parents told me “we can’t afford that” all the time. Horse riding lessons? Avocados? Cable? Nope, can’t afford that. It didn’t seem apocalyptic at all- we could afford many things, but not everything.

          • heyqueen

            I think that’s a really good way to introduce the concept of intentional spending to children. Money is a limited resource, but there are a million things you want to do with it. After teaching them to prioritize their “bills” and savings let them know you can only afford to do x things with the remaining money.

          • Michela

            I have a fatalistic brain, so it was apocalyptic for me and created deep money insecurities in adulthood. Everyone is different. That strategy didn’t work well for me, but certainly works just fine for others.

        • GBee

          My parents never used the words “we can’t afford xyz” and I’m thankful for that because I would have took it the exact same way as you. My parents simply just said “no.” Or sometimes they qualified it by saying they are spending money on dance, soccer, school, etc. NOT magazines and clothing items (which taught me about priorities). I think this has served me well in adulthood because it taught me to say no to myself when it comes to unnecessary purchases. For example: even though I *can* afford to spend $5 on coffee every morning doesn’t mean I *should*.

          • Michela

            I love this! I especially love what your parents said about not spending money on magazines and clothes because they chose to spend money on dance and scocer. Sounds like that was a really successful way to teach kids about priorities. Thanks for sharing!xo

          • I really like this idea of “that’s not one of my/our budgeting priorities right now.”

    • Michela

      My husband and I have talked about this at great length. I agree an APW post on this topic would be fantastic!

      I’ve mentioned this on money threads before, but my husband grew up outside of Amsterdam and his parents had a normal-for-the-Netherlands/not-normal-for-America strategy for teaching kids about money. When he was 12, T sat down with his parents for a money summit. They gave him a ledger with all of his monthly expenses (soccer club fees, school clothes, movie tickets and ice cream, etc.) and said “we’re giving you $500 per month for all of these expenses. When you purchase something, write it down in your ledger so you can keep track of where your money is going. If you want to buy that $80 Ajax Amsterdam jersey, that is your choice. Just be aware you might not have money left to purchase new socks when you need them. We won’t bail you out”. For the first year or so, T went over the monthly purchases with his parents, but after that he was on his own. Around 15, he also started paying for family expenses like an evening out for ice cream or amusement park tickets out of his monthly stipend. It was a brilliant way to empower him in his own finances in a way that wasn’t burdening him with family expenses like you mentioned. They hyped it up as a very adult thing, which also meant it was a milestone his younger brothers looked forward to. My husband is SO fantastic with money, he was able to quit his job unexpectedly and start his own business while never going into debt and still adding to his savings account.

      This is quite different from my experience with money growing up. My parents were so tight on cash, I only heard quiet whispers about selling jewelry to cover tuition. This actually gave me intense anxiety surrounding money, so I never had positive experiences with it until we combined finances and I learned how to budget (YNAB is a lifesaver).

      We think we’ll adopt a similar strategy T experienced for our own unborn children. We also think we’ll incorporate them into some family decisions. For example: “We’re going on vacation in two months. We have two options to choose from- we can stay at a house further away from the beach and have more money to do activities, or we can stay at a house on the beach but not have as much money for activities.” This seems (from a non-parents’ perspective, so take that with a grain of salt) a healthy approach to teaching kids about the trade-offs we make with money- cheaper beach house with more activities or more expensive beach house with fewer activities? The stakes aren’t as high as what I heard my parents whisper covertly as a kid (will I get kicked out of school because my parents can’t afford tuition!?) but still gives kids an opportunity to participate in family decisions surrounding money in a healthy, low-risk space.

      • Lisa

        I remember you mentioning this in one of the earlier threads, and I think it’s such a brilliant idea. I’ve seen mentions on YNAB pages of parents who have done something similar with their own children by giving them their own budget to access so they can budget their allowances. I think this is a great next step in that direction.

        My family was never hurting for cash, but I always felt uneasy about the lack of transparency. I knew my dad made decent money, but was it $X or $2X or $10X? How did that affect what we could pay for? (Though my parents never told me we couldn’t afford something. It was usually just that they wouldn’t purchase it for me because I didn’t need it.) Maybe my hypothetical kids won’t care, but I think giving them even a basic overview of the family’s finances might help reduce any anxiety they might have around money.

        • Michela

          I totally agree. I had absolutely no idea how much my parents made, how much our private Catholic school tuition cost, or how much we spent each month on groceries. As an adult now, I thrive on data because it helps me put things into context. Perhaps if I’d had that context as a kid, I wouldn’t have been so anxious. Knowing we had enough to make ends meet (however tightly) would’ve made me much less fearful we’d end up on the streets, which was how I spent much of my childhood. Couple that with a private school setting where most kids lived in extreme wealth made me extremely money-anxious. I’m still unpacking all of that, but YNAB helps a ton!

      • AGCourtney

        I like that! I’ve also introduced low-stakes budgeting to my daughter. For example, we’ve been going to the Renaissance Festival every weekend, and she knows she only has so many dollars to spend each day and has to make choices about which rides to go on and treats she can get.

        Apparently it’s working well: the other week, I mentioned that some hypothetical situation would be very, very expensive, and my daughter nodded wisely and added, “And then we couldn’t buy Hamilton tickets.” (We’ve already bought the Hamilton tickets, of course, but the fact that she made the connection still cracked me up.)

        • Michela

          Ha! That is so great!!

  • Bsquillo

    I love this conversation! I actually (weirdly?) love talking about money, because I find that taking control of it is really empowering. I understand that comes from a place of privilege in being financially well-off enough that we don’t have to stress about money…but that hasn’t always been the case for my husband and I, so I’m really proud of our progress.

    We’re doing pretty well with 401k and Roth IRA investing right now, plus staying on-budget every month and saving up for some larger purchases. I used to be a more flexible budgeter too who didn’t really see the value of strict budgeting tools, but I actually LOVE YNAB now that they’ve added the option to direct import transactions (the inability to do that in older versions always bugged me). YNAB has actually helped me get rid of a lot of spending guilt, because I can firmly know that we’ve saved up enough for larger or unexpected purchases, so we’re covered.

    Our next step will be to balance tackling my husband’s student loans when he completes his degree this semester + trying to start saving for a down payment on a house. I feel like I’m pretty clueless in both those arenas (I have never had student loans myself), so it will be a learning experience for sure.

  • Stephanne

    Does anyone have any advice about how to deal with retirement savings when you don’t have any options through your employer? I’m a PhD student and my partner is an independent contractor, in our mid-late twenties. We are devoted YNABers and will be done paying off our consumer credit card debt within the next year, and hopefully her student loan within the next three to five years, but haven’t done any thinking about the retirement savings. I guess I have been assuming that I will start saving aggressively when I get a hopefully lucrative industry job post graduation, but maybe I’m really missing out by saving for a few years in my twenties. She is likely to be an independent contractor or running her own business forever, so we will definitely have to figure that out.

    • heyqueen

      If you’re within the income allowance, a roth IRA is a good place to start.

    • JC

      Hi! I don’t have any direct advice, although all of the tips in Meg’s article about ROTH IRAs are a starting place. BUT. The state of California just passed a bill to let nearly all employees throughout the state start a retirement account through the government, for those who can’t start an account through their employer. It’s a major progressive move forward, so if you live in CA it’s worth keeping an eye on, and if you don’t, it’s worth keeping an eye on and writing to your local reps!

    • Rowany

      If you get a W-2 for your stipend income, you’re eligible for a Roth IRA. I would recommend opening an account with Schwab, they have very small minimum amounts to start investing, only $100 (to get the best rates with Vanguard, you need >$10k). Both of you could add whatever you can to your Roth IRAs up to $5500 each, but I would also look into vehicles specifically for independent contractors as well, like Solo 401k which I know very little about.

    • Ashlah

      I would also start by looking into a Roth IRA. And in case you need any more encouragement to get started, look at these charts! It’s definitely a good thing to do if you can swing it even a little bit.

    • E.

      I remember someone came to my class senior year of high school and talked about saving and investing and he told us how much we would have by retirement if we saved $10/month. I don’t remember the number, but I remember it was huge! My mom also didn’t really start until her mid 30s and has told me she really regretted not doing even something small like that because the interest really adds up.

    • Lisa

      Married to a PhD student here! Currently we only have a 403(b) and Roth set up in my name, but I am thinking we might set one up in my husband’s name soon so that he has assets accruing as well. If your fiancée is self-employed, she should be eligible for a SEP IRA.

      • Stephanne

        Thanks everyone! It looks like I’m not eligible for a Roth IRA because of the kind of stipend I have (no W2), but it looks like once we’re married she should be able to open one for me. Also, it seems like self-employed people have a lot of options (SOLO 401K etc.) so she actually has a lot of flexibility. I’m so grateful for this article and the amazingly knowledgable APW readership, because now I am actually doing my research!

        • Lisa

          You can also do individual investing by opening an account through Vanguard for the time being so that you’re at least putting something into a high yield account. You could then open the Roth IRA with them once you’re married!

          I highly recommend The Simple Path to Wealth, which I mentioned elsewhere in the thread, because it has great information for people who are new to the idea of investing and different retirement accounts. It really helped me expand my knowledge base and was a pretty quick read!

  • E.

    I have a question about life insurance. I get very basic life insurance through work, I don’t think my fiance does. We’re both 25 and are thinking kids in 3-5 years or so. When should we get life insurance? Now? When we’re married? When we have kids?

    • Ashlah

      Get it now! There’s no reason to put it off, unless you truly, truly cannot afford it. Get it while you’re healthy. It’s cheaper and you can avoid kicking yourself for not already having it if either of you goes through a health scare (trust me, that’s a shitty situation to find yourself in). We each took out enough life insurance that the other could pay for funeral arrangements, pay off the mortgage, and have a chunk left over to deal with the transition into a one-income household.

    • Eenie

      Before you have kids/get pregnant. It is easier to lock down a cheap rate now if you are relatively healthy, you never know what the future holds.

    • emilyg25

      Personally, I’d wait. I got it at 30 and my rate was still really low. My basic policy through work would cover funeral expenses. I didn’t add an additional policy till we had a kid and bought a house. To me, the point of life insurance is to make sure my loved ones can continue their lives without me. Up until we had the kid and house, that would have been easy. Financially at least.

      • Amy March

        Agreed- no one is financially dependent on my, so I see no need for life insurance. And I think it’s terrible as an investment/savings vehicle.

        • Lisa

          Completely agree with this. If it was just me, I don’t think I’d have life insurance. I think my dad used to have small policies on my sisters and me that would just cover funeral expenses. We’re planning on having kids in the future, and it made sense to me that we’d get some policies now while they’re cheaper so that we would have them in case one of us ended up becoming a single parent. We might take out additional policies when we have kids depending on our income levels, but we’re pretty well-set with what we have right now.

      • Caitlyn

        One caveat I’d mention is if you have student loans your parents co-signed for – please get life insurance. My mom co-signed on my private loan (the largest one I’ve got) and my motivation for having some pretty serious life insurance for someone my age with no kids is that if I die – she’ll be stuck with that loan. And at her age it would be financially devastating. (This is NOT the case with federal loans. Those should be forgiven if you die).

    • Kate

      Daughter of a State Farm insurance agent here, who saw waaaay too many people put off getting life insurance and then had a sudden health crisis that made it incredibly expensive or impossible to get life insurance. Also, don’t wait until after you have kids. Do it well before you’re even trying, I just could see it slipping through the cracks so easy when you’ve got such a huge life change ahead of you. I’m well insured for super cheap and it is really nice to know my loved ones will be able to take time off work if I kick it (I’ve also requested they all take a really nice vacation together as part of the healing/grieving process). Shoutout to my universal life policy that I’ll be able to borrow against should I have an emergency down the road (super handy!).

    • Lisa

      I’d get it in the near future. Those employer plans don’t offer much and won’t follow you if you leave the company. If you lock in a great rate now, you might be able to carry that with you the rest of your life. Plus, Meg has written before how her pregnancy complications affected her ability to be approved for life insurance.

      We did this back in December after a post from APW, and we were able to lock in the highest non-smoking health rating. This means that at the end of our 30 year term, we can re-up our policies with the same health rate even if our health has changed drastically in the meantime. We also locked in a lower annual rate because we are so young and health, which means we’ll pay less than if we’d waited a few years. My husband’s plan is also with the same company where we have our umbrella, auto, and renter’s insurance so we get a discount on our other policies.

      • laddibugg

        Can you direct me to the post(s) about Meg’s situation? Not sure what to look for.

        • Lisa

          It’s in a quote on Elisabeth’s life insurance post. Meg was initially denied because of the depression she experienced during her first pregnancy.

          I’d also put a vote out for talking to an insurance agent who represents multiple companies. We talked with ours for two hours, going through all of the health forms bit by bit. She then investigated what our likelihood was to be approved at the rates she had quoted us at the company she was intending to use. Since I had had a medical issue (HPV) at one point and based on her research, she ended up suggesting a different carrier for me than for my husband. My husband is with the same company as our other insurance policies, but I have mine at another that only provides life insurance. I really appreciated our agent’s due diligence to make sure we got the best coverage for the lowest rates.

    • NotMotherTheresa

      Life insurance at your age is cheap, so the sooner the better. Plus, honestly, I think all couples need life insurance, not just those with kids. Dying is expensive, and the last thing you would want to worry about if the unthinkable happened is blowing your savings on a funeral and having to figure out how to immediately downsize to make up for the lost income.
      At least to me, the small premiums I pay are well worth the peace of mind that comes from knowing that if one of us died, the other would have plenty of money to live on until things normalized a bit. We’ll add more coverage in a few years when we have kids, but for now, we have $100k, which should be more than enough to cover all funeral costs, keep the bills paid for quite awhile, and provide a bit of mad money for spending our feelings.

      • Lisa

        I had similar feelings surrounding this. We each have $250k, which could be used to cover funeral and outstanding medical expenses. I also like the idea that we could live decently well on the remainder for a year or two while sorting out any grief issues. We will probably add another policy when kids enter the picture so that we could cover childcare and education expenses, but what we have is certainly sufficient for now.

  • Preengaged

    “Crazy about Money” by Maggie Baker is a similar resource. “How emotional confuse our money choices and what to do about it.”

  • ejnz

    I’m a little surprised and disappointed you didn’t include a paragraph on socially responsible investing when encouraging people to invest… We have huge issues over in the antipodes about our superannuation funds using our retirement savings for growth in companies that deal in ammunition and arms (including weapons banned in Aust/NZ), tobacco, nuclear bomb component makers, gross polluters and others who have breached human rights. I am ALL for investing (I do), but I’m also all for my money being used for ecological, ethical, human rights-compliant purposes, and I’d be wary of a blanket “throw your money in a mutual fund and forget about it” approach, as I believe we have a duty to know that our money is not causing harm elsewhere.

  • Eh

    I am in Canada and I don’t know much about the American retirement savings system (I just learned a bit reading some of the threads below). I have a defined benefits pension through work and I have an RRSP (taxes deferred until withdrawal) to save for retirement. In addition, I have a tax free saving account (income tax paid before depositing it but no tax paid on withdrawals or interest – they can be high interest savings accounts or investments) that is our emergency fund (can’t be joint so it’s under my name). My husband is paying off his student loans (he is almost done) and then, since he is in the lowest tax bracket, he will start saving for retirement by putting money in a tax free savings account.

    I loved that Meg mentioned that it doesn’t really matter if you keep your money separate that legally (unless you have a good prenup) it’s merged. We have individual and joint accounts. The main reason for the individual accounts is because we had automatic billing/direct deposits set up prior to getting married and it seems like a lot of work to switch them over. We manage our money as one unit, it’s just divvied up into a whole bunch of accounts.

  • Great resources for brides and grooms as they start to plan their lives together. It is so important to discuss these topics before marriage and make sure you are on the same page when it comes to finances and planning!

    Debi
    https://SoCalWeddingResources.com

  • It is very important for the groom to give the bride the right dresses and jewelry for the marriage to work. http://ow.ly/m0mA304t5Rj

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