The Social Marginal

So I’m busy forming a new company or two and transitioning some contracts at the moment, so don’t have a lot of spare time to write, but I’ve been keeping up my normal sporadic reading throughout the day though, so here are some posts I’ve found interesting in the financial blogging spectrum…

MasterYourCard writes about recession-proofing your savings - Good layman readable overview on what is and isn’t insured in case your bank fails.

Get Rich or Die Trying writes about donating your plasma for extra money - OK, I admit, I’d never do it (they won’t take my blood anyways, not that I had any nasty diseases or anything), but I guess if you’re really scraping by some honorable extra minimal income for yourself to pick up.

Saving Savvy by a Future Millionaire writes about his learning about Passive Income - Definite lesson that all should learn and something everyone should strive to achieve.  Financial freedom is a wonderful thing.

Pinching Copper writes about how there are no victims in the housing bust - I couldn’t agree more.  I get tired of hearing everyone whine about getting suckered into something based on their own ignorance and greed.

No Debt Plan talked about his toothpaste paying him seventeen cents - There are some very frugal people out there, not that it’s a bad thing…

That’s about all that piqued my interest for one reason or another in the past couple days.  Until I’m able to dedicate time to writing again, I’ll update everyone on what’s keeping my interest at least.  Listening to the Fed hearings this morning/afternoon was interesting as well.

I know it seems like common sense and that you probably believe that you already are aware of your overall financial future, but are you really?  With this post I aim to pose that question to you, not necessarily give you a formula for an answer or a full plan to implement, but rather to motivate you to research and create such a plan should you not already have one.  I will assume that you’ve already dealt with all irresponsible debt before moving forward.

A good number of the members of the Baby Boomer generation are heading towards retirement age without retirement funds to support them in retirement, thinking they are going to just have to work the rest of their lives (see increased IRA contributions with age, etc. and consult a financial planner if you’re one of these people, there might still be a way ‘out’).  Then we have the GenXers who are hitting their thirties and for the most part (at least ones which work in the corporate world or are self-employed, which is the demographic I would be refering to) which have been contributing to 401ks, IRAs, and various other retirement programs for almost a decade now and if they continue responsibly to be on track to retire whether or not social security payouts are around when they hit 55 (or 59 if you plan on living a nice, long life).  And between both groups we have the issues with Debt to Asset ratios.

If you currently contribute to your 401k, IRA, have an emergency fund, and your assets equal a higher dollar value than your debt, then you are on a fairly good path and keep it up.  But the majority are not, and these people need to look into these options.  Whether you are working and 25 or 55, if your employer matches 401k or IRA contributions, take them, it’s free money.  If you don’t have an emergency savings fund for events that may come up, regardless of how great your credit available is, build one, I like to use six months of total expenses as a general rule of thumb in a high yield savings account.  Do you even have a high yield savings account?  If not, create one, send me a message at cinder@socialmarginal.com with your name and email and I’ll be happy to send you a code that will allow you to get a free $25 with a minimum of $250 opening deposit (ING is where I keep my personal savings and have had no problems with it), but there are many other banks and do research regarding the entire company rather than just the rate they offer before you decide on one to utilize.

Not many younger people realize how much money they’ll accrue over 20-50 years if they can just afford to contribute $25-$50 a week or even month to a high yield savings account with compound interest and all, do the math, you’d be surprised.  So if you’re still relatively young, you still have plenty of time to start building that future, but don’t wait (the earlier you start, the more you’ll have), do your research and do it now.  If you’re around 55 and still working, you still have opportunities to contribute to that will augment your social  security as well. 

If you’re 59+ and living off social security and no other auxilary income, well, hopefully you’re making it work, if not, try and find some alternate income that doesn’t add a lot of stress to you, like jobs working from home, and get at it (Sorry, not much advice on that one).

Not all that helpful, but there are a thousand articles (Google is your friend) that will explain what you ’should’ do and different opinions on it, this is just a reminder that if you’re not seriously planning for your future, you need to get off your butt and do it.  If you have a financial planning blog or article that you’d like to reference pertaining to this situation, please do submit it to the comments on this post for others to use.

So I sit and ponder in my massage chair this morning (it’s where I ‘wake up’ and write from) why my Fiancee and I never fight about money or finances.  For many couples it’s a staple of their relationship and has been the downfall of many more, but I can safely say that it won’t be of ours.  Why?  Because we share everything, hide nothing, and we trust eachother completely when it comes to the finances.

It started when we moved across the US together, we didn’t have a lot of financial accounts and such in both of our names, but now that we are here, we are both on all of each others bank accounts, credit cards, etc.  You see, when we moved back here, we needed a home and a responsible loan to go with it.  I could qualify for a mortgage easily, and her, not having an established job (she was moving back here to start one), could not.  So I ended up getting the mortgage for the house we found in my name and I chose to trust her enough to put both of our names on the actual deed with survivorship rights.  This was a big step, and it opened the door to complete financial trust.  From that point on she made sure that I was named on every bank account and financial related product she had, and vice versa.  We had opened the doors to not only a new house and a new chapter in our lives, but also to complete financial trust.

 In day to day activities, I handle one hundred percent of financial activities for both of us, whether it be keeping track of the checking accounts, contributing to both of our IRAs, or just watching the savings and the stock portfolio.  My fiancee is fine with that, she trusts me with it even though a large part of it is her money, she would even if I chose to tell her nothing about what I did.  But I do tell her what I do with our money every day when I get a chance (I try to summarize it as to not make it so boring), I let her know what stocks were purchased and what money was moved to high yield savings accounts or to this or that so that she feels that she is active in the managing of our finances, and I always ask her if there is anything that she’d like me to do with the money that I haven’t already.  This method works very well for us and I suspect will last indefinitely, we’re lucky that way, we’ve already jumped the financial hurdle in our relationship.

Another thing I did, and something which I recommend all partners that are financially adept in a relationship with a less financially adept individual, is to educate them on finances.  Discuss it with them, buy them some books, magazines, whatever they’ll read.  Constantly show them articles about stocks in magazines pertaining to companies that interest them already, it’ll open them into reading and learning about that company’s business side, understanding market terms, and then wanting to expand and know about others.  No matter how stubburn the partner is (trust me, mine was stubborn to start with) about not wanting to educate themselves on the matter, with persistance, it does work.  And most of all, after they start doing so, start asking them what they’d like to do with your money (and actually do it!), make them feel as though their new knowledge is not wasted and that they’re making a difference in your finances.

So to sum it up; trust each other, share everything, be completely open about finances and discuss them often, educate your partner in business and economics if they aren’t already, and most of all include them in investment decisions.  Sounds pretty much like common sense, huh?

 There are a lot of areas of our relationship where I’d say that we aren’t the best role models, but this is one where I can safely say that we are.  I hope you apply what you’ve read to your relationship and make finances an open, exciting topic in your relationship rather than a taboo that is to be avoided.