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10 Ways for Couples to Master Their Money

One of the most powerful tools you have to tackle and master your finances is not some fancy calculator or new app, but your spouse. You two are in this journey together and that means using this opportunity not just increase your net worth, but to actually becoming closer.

10 Things You Two Can Do to Build Your Net Worth

When I first started Couple Money, I shared some tips on building a financial plan together. Now older (and hopefully just a little bit wiser), I’ve adjusted my suggestions and added two more. Whether you are newlyweds or have been married for a few years, there are ten things you two can do together that will build your net worth.

  1. Create and share a list of all your debts and assets. This is a difficult step for most people because it can be scary to see where exactly you stand financially. Resist the urge to minimize or feel overwhelming guilt about the numbers. The point of this step is not to place blame, but to get a starting point. Owning up to mistakes can be productive, but only if you use it as motivation to change your money habits.
  2. Work out long and short term goals. Now that you two have an idea of where you are, take some time to just talk about your goals and dreams, nothing else. This is the fun part – the two of you can work out what you’d like to do and where you would like to be next year, in five years, and beyond. Do you want to travel? Do you want to start a family? Have you thought about becoming business owners? Whatever it is, talk about it, in detail. The more you can see it, the more likely you two can work towards it.
  3. Have joint accounts. If you haven’t already, have a joint checking and savings account for your bills and mutual goals (like a house down payment). Make sure the accounts are accessible to both of you. Whether or not one handles the day to day deposits and withdrawals, you are both accountable.
  4. Create a spending plan together.  This is the step where the two of you allocate your income to reach your goals. The easiest way we’ve found for getting  there is by automating our payments and transfers.  Use your bank or credit union’s bill pay system to handle all of your regular bills, debt payments, and savings.
  5. Make paying off debt a priority.  Think of your debts as dead weight, slowing you down on reaching your goals. Cut down drastically so you can eliminate your high interest debts (like credit cards) as quickly as possible. Begin with your smallest debts and move up to larger ones so you can get motivational boosts as you knock out each debt. Use debt snowflakes to speed up the process.
  6. Build an emergency fund. Prepare for the unexpected and relieve some stress in your marriage by having a financial cushion such as an emergency fund. Try and save $1,000 or one month’s worth of expenses and go until you both are comfortable with your buffer.
  7. Keep your essentials affordable by being conservative.  One of biggest favors you can give yourselves is having a low overhead for your necessities. For us, that meant looking for places that we could afford with one income. That gave us some peace of mind and the second income was used to take care of debts and increase savings.
  8. Drive used cars. If  you have to own a car, take the time to find a dependable one within your budget and if at all possible, avoid car loans. If you already have one, make paying off your car loan early a short term goal.
  9. Do a monthly review. With your system in place, schedule a time each month to check on your progress. Talk about what went well and what didn’t the past month and think of ways you can improve. The goal is communication, not arguing.
  10. Celebrate each win. Finances isn’t just about the numbers. When you two reach a goal, like paying off that department store credit card or saving $1,000, take some time to acknowledge the occasion – take a weekend trip, have a party, or just dance. The point is that every accomplishment deserves recognition.

There you have it – a handy list of tips you two can use to grow your money faster.

Thoughts on Building Your Finances Together

I know of course that these tips are not the only thing you can do, so I’d love to get your feedback on how you have done it. How have you worked together to accomplish your financial goals? What helped you to reach them?

Photo Credit: Danumurthi Mahendra

Keeping Tabs on Our Retirement Accounts

Over the last few years as we’ve been working together and I’ve been sharing our progress on Couple Money, you may have noticed a few constant themes coming across in several posts, two of them being automate your finances when possible and save for retirement.

I think that one of the most helpful things we have done as a couple is creating a financial system that basically takes care of the essentials so we are freed up to  spend more time on people and activities that matter to us. As working parents, we would honestly rather do other things than looking over everything continually.

Stressing over finances can take a toll any family, so automating our finances is both a way to reduce needless noise and build our net worth. Our retirement accounts are pretty much on autopilot and it has made things much easier to manage.  For those interested in looking under the hood, I want to share what we use.

Set It and Forget It

I know everyone is different, so what works for us may not work for you. There are some people who love to constantly track every peak and valley of the market, getting alerts on all the news of the day.

Neither of us are like that.

We are the type who have no problem reading books, articles, and talking with others to come up with an investing plan. From there we want to be able to have automated contributions based on our plan and have access to check on our accounts as needed (which is hopefully once a quarter).

When we were devising our plans for the 401(k) and the Roth IRAs, we were looking at passive investing and in particular index funds. My husband’s job offers a match with their 401(k) so we made sure to max his contributions to take advantage of  this wonderful benefit. The down side is the 401(k) has limited options, so we choose a few solid funds.

With the Roth IRAs, we have a bit more freedom so we are able to get the accounts to our desired asset allocation. In general, I based mine on David Swensen’s model.  The general asset allocation Swensen recommends includes:

  • Domestic Equity (30 percent)
  • Real Estate Investment Trusts (20 percent)
  • Foreign Developed Equity (15 percent)
  • U.S. Treasury Notes and Bonds (15 percent)
  • Emerging Market Equity (5 percent)
  • U.S. Treasury Inflation-Protection Securities (TIPS) (15 percent)

Since I have decades before I expect to draw money from this account, I don’t really have much in the way of bonds and the more conservative investments so I have a bit more in foreign developed equity than in treasury bonds.

investing for future

Using Vanguard and Betterment for Our Roth IRAs

I’ve written the process of open an IRA with both Betterment and Vanguard so if you are thinking about using either please check out my reviews. I highly recommend both companies as we’ve been happy with both their services. So far we haven’t had any problems, which has made investing that much easier. Both of these companies suit our personalities and allow us to painlessly sock away money.

Betterment is great for my husband as everything is automated for him, including rebalancing his portfolio. For those just starting out or with low balances, you may want to try Betterment as most of Vanguards fund have a minimum of $3,000 (the big exception are their target funds).

I love Vanguard because they have numerous funds that have low fees, meaning more of your money goes towards growing for your benefit. They also are considered the leader in their field, offering a ton of resources and research on investing.

Either one you choose, you can easily grow your portfolio by signing up for automated contributions. If you’re interested, you can sign up for a new account at Betterment * here or Vanguard here. It will probably take you 20 minutes to set up and open.

 Thoughts on Setting Up Your Retirement Portfolio

Like I mentioned earlier, what works for us may not be your cup of tea so I’d like to know how you two manage your retirement accounts? How did you set it up? What companies do you use? How often do you check your accounts?

Disclaimer – I am an affiliate of Betterment. 

Photo Credits: Behavior Gap and Chris Potter

Republic Wireless: No Contract Moto G for $149

If you’re trying to manage your bills, one area where you may be able to save some significant money is by switching your cellphone provider. With many couples, paying for an unlimited family plan for 4 people can set them back about $180-$200/month. How would you like to cut that bill down in half,  $100/month?

Starting next month, Republic Wireless is selling the Moto G (starting at $149) , a very capable smartphone. Customers can choose what cell phone plan works best for them, including:

  • Unlimited talk, text, and data on WiFi only – $5/month
  • Unlimited talk and text on WiFi and cellular, and unlimited data on WiFi – $10/month
  • Unlimited talk, text and data on WiFi, plus talk, text and data on 3G cellular – $25/month

The icing on the cake is that are no contracts or termination fees. With the Moto G coming out and the Moto X (which is 4G LTE compatible) that they offered this past fall, Republic Wireless is fast becoming an attractive options for families looking to drastically cut their cell phone bill without sacrificing service.

More Smartphone Choices

I’ve mention before that I believe Republic Wireless has some fantastic deals on cheap smartphone plans. When I signed up with them, they had the Motorola Defy XT. It’s a reliable phone (I still use it), but it was far from the top tier, fast as lightening phones that many people want and for some people, it was a deal breaker. I know this because when I mentioned the plan prices, people got excited and asked questions, but when I showed them the phone, they were less enthusiastic.

When the Moto X was released on their network, people were curious, but the hefty price tag with buying a new phone ($299) was a hurdle for some. Now with a $149 option for a good smartphone, I think more families should take another look at switching to Republic Wireless. The money saved can be pretty significant.

If you’re interested in using Republic Wireless and getting unlimited talk, text, and data, then sign up today.

How Republic Wireless Works

For those who haven’t heard of Republic Wireless  and are curious about how they are able to offer such low prices for unlimited plans, their  ‘secret’ is hybrid calling.  Hybrid calling has your phone use Wi-Fi for calls, web, text, and all things mobile and if there isn’t Wi-Fi available your phone uses the cellular network. They are a mobile virtual network operator (MVNO) of Sprint.

They offer seamlessly transition between wi-fi and celluar so you shouldn’t notice anything when you’re on a call if you move between one and the other.  I’ve used my phone and have found it and the service works just as well as ‘conventional’ phone providers in my area.

Thoughts on Republic Wireless

I’d love to hear from you about good cellphone providers. Who do you use and why? For those who are on Republic Wireless already, what do you think of their services?

Photo Credit: Republic Wireless

Disclaimer: I’m an affiliate of Republic Wireless, however it was only after I had been customer for some time.

How Much Should You Tip?

I was catching the news this morning and one of the stories caught my eye - how digital transactions affect tipping for services. I thought it fascinating that businesses had seen hikes in the amount of tips collected when they use services like Square to handle their transactions.

Lately I’ve noticed more and more business leaving out tip jars and other hints at the register. While I certainly understand that employees are trying to maximize their pay for service, I sometimes get frustrated because I’m trying to figure out what’s appropriate (and that’s even before the digital tips).

The Basics – Tipping Customs

Like most people, I knew about how much to tip a waiter at the restaurants, but didn’t know much about other services. In general, I tip 20% when I go out to eat at a restaurant unless the service is sub-par. Having been a server I know that they give some of that tip money to the hostess or the busboy.

For everything else, I’ve either had to ask friends what they tip, searched online, or just asked the person themselves. To help simplify things, I’ve rounded up some of the customary tips for services that many people use throughout the year. (Please let me know if I’m missing something by leaving a note in the comments so I can add it to the list.)

  • Barber/Beautician: 10-15% for barber while 15%-20% seems customary for beauticians
  • Barista: No customary gratuity, but I’ve seen people leave their change from their purchase
  • Bartender: $1/drink
  • Hotel Bellman: $1-2 per bag
  • Hotel Maid: $2-$5 per night
  • Parking Valet: $2-$5
  • Pizza Delivery: 10% of your bill
  • Shuttle Drivers: $1-2 per bag
  • Taxi Driver: 10% of your fare

I’m just highlighting some of the more common amounts suggested, so please don’t be surprised if it higher or lower than what you thought. I also want to note that you should check your bill to make sure you’re not paying for gratuity twice (unless you believe the service deserves such a tip).

Tipping in the Digital Age

Going back to the news story, the report highlighted that businesses switching to a service like Square seemed to have dramatically increased the amount of tips they receive. One reason mentioned is that there are default amounts given that take the guesswork out for customers. The coffeehouse featured in the story showed how easily someone could tip $1 or $2 as they sign their receipt.

Swiping your card and having a suggested tip makes it easier to go ahead and pay. Some studies have noted that people tend to tip more when using credit cards instead of cash and to be honest, I’ve noticed that I’ve been guilty of that too. (That’s one reason I’ve been using Simple as my personal checking account, so I can better track my money and save more.)

Another explanation given was that some customers feel guilty leaving no tip. Jeremy Lyman, co-founder of Birch Coffee shared his take on the tip boost.  “I feel like sometimes people actually do feel bad pushing ‘no tip’.’” I can certainly understand that, but at the same time, I don’t believe every service deserves a tip. If I get a regular coffee with nothing special, I don’t feel like tipping. However if I have a special order, then I will leave some thing. I don’t like the idea of being pushed into tipping.

Thoughts on Tipping

This is a topic that can vary greatly by region, so I’d love to get your take and feedback on it. What are your thoughts on tipping? What services do you usually tip? Do you think some shops are pushing tips more than they should?

Manage All Your Bills with Finovera

For years, Mint has been my favorite – allowing me to get a snapshot of our finances and giving me a way to watch our spending in an easy and free way.

Finovera – A Comprehensive Financial Solution?

Now, though, there’s a another option out there – Finovera. The company is hoping to take money management a step further – giving users not only the ability to see their budget, but also manage their bills  AND store their financial documents in one place.

Blogging about personal finance, I’ve seen various companies try to provide a practical solution for money management so I was a bit hesitant to check this out as Finovera had been in private beta until this past fall. However what they were offering intrigued me to I decided to check it out.

I looked online and dug around to see what they were about and was curious to see if they were as comprehensive and handy as they advertised.

After chatting with their senior product manager to answer some questions I still had, I will say that I believe Finovera can address a need to keep family finances organized.

Finovera Features

This is most definitely a comprehensive tool. With Finovera, you can do so much with your budget and bills right off the bat.finovera bill managementKnow your bills

After you link your bills into Finovera, it pulls 12 months of history and tracks averages. That gives you a snapshot of where you are with your monthly expenses.

For utilities like electric and gas, you can see if your bills sky rocket during the winter and/or summer, making it easy for you to plan accordingly (and also optimize your home).

As they add more and more companies to their list of partners, Finovera becomes even more convenient and useful for users. Even if your current provider is not in their database, Finovera allows you to link online and offline accounts.

Stay on top of your budget

Finovera makes it easy to set up alerts for when you are spending more than normal. This is a handy tool as you can make adjustments immediately for the next month.

Store your important financial documents

In line with their vision of giving you one spot to manage your finances, Finovera gives users a digital filing cabinet (currently with no size limit) to store documents such as bank statements, tax returns, and other important records.

They plan on expanding what you can upload (see below for details about their mobile app) so you can easy find what you need.

Bank level security

If you’re worried about security, just know that Finovera uses a 256 bit SSL encryption technology for its security, the same as banks.

Mobile Coming Soon

Later this month Finovera will be launching their mobile app, which will give users the capabilities of uploading to their digital even more easily through their smartphones.

I think will make the service that much better and could be a way to de-clutter your file cabinet this spring while still retaining the documents you want.

Thoughts on Finovera

I think the biggest endorsement I can give with this product is that I signed up for it myself. I think it’s a wonderful tool that can many couples manage their money, bills, etc easily.

How about you? What do you think about online solutions like Finovera? Do you think your family’s finances could benefit having everything in one place?