marriage

3 Money Arguments That Can Hurt Your Relationships

Emily Guy Birken — Mon, 04 Nov 2019 08:00:07 +0000

Money has a funny way of sparking a number of disagreements, arguments, and even lifelong grudge-matches. No two people are going to see eye-to-eye on every aspect of money management, and since finances can be such a volatile topic, any money misalignment between two people can cause a great deal of friction.

Unfortunately, money arguments can often be much harder to navigate than your garden-variety disagreements.

Here are some of the most common money arguments you may have to deal with, and how you can nip them in the bud before they interfere with your relationships. (See also: 4 Money Fights Married Couples Have (And How to Avoid Them))

Friends with expensive tastes

We've all had the experience of not feeling like you can keep up with high-rolling friends. They might propose going out to eat at Cafe Riche where cocktails are $25 each and the entrees don't even have prices listed — while you were hoping to share a pitcher of beer and a plate of nachos at the local dive bar where no one blinks when you pay with sofa-cushion change.

It can feel awkward to ask your monocle-wearing friends if you can change the venue, but going to their preferred spot to pick at the cheapest side salad on the menu is a recipe for resentment. Especially if they suggest splitting the bill evenly at the end of the night.

You may worry that you're in for a fight no matter what you do, since pointing out the differences in your spending habits can end with hurt feelings. However, it is possible to get ahead of these potential arguments before they become a problem.

To start, you could simply state out loud that you're working with a tighter budget than you'd like, so you're hoping to have fun on the cheap. If that doesn't feel comfortable — not all friends are at the "sharing their financial reality" level of intimacy, after all — then consider suggesting fun activities that are free or cheap, and simply bowing out of the reservations at Chateau du Moolah.

Finally, if you do end up tagging along to some of the expensive restaurants, ask for separate checks when you order, rather than wait for the awkward moment at the end of the meal. (See also: 5 Friend Types That Can Hurt Your Finances)

Misaligned spending priorities

A surefire path to an argument between married or cohabitating couples is when one person spends money on something the other person thinks is unnecessary. Whether the money is going toward education, a new gadget, groceries, or clothes, one person may feel that the other is being completely irrational. The spender might feel like the saver is either a buzzkill or unsupportive, while the saver may think the spender is irresponsible and doesn't care about their future.

This kind of argument can be easily averted with separate fun money funds. Making sure each person has their own fun money can allow them to make purchases the other might see as unnecessary, without it becoming an issue.

It gets much thornier when larger spending priorities are misaligned. If you and your partner cannot agree on how much to spend on things like education, career needs, food, or the like, then having separate funds cannot solve the problem.

This is when it makes sense to talk about the basis of your spending priorities. If you feel strongly that you should pay for your child's education and your spouse disagrees, taking the time to talk about what those actions would mean for each of you can help you figure out what you're each trying to accomplish. Knowing the why behind your spending priorities can help you find common ground that will lead to a compromise. (See also: 4 Ways Couples Can Tackle Money Goals Together)

Loaning money

One of the most awkward money issues you can face is when a friend or family member asks to borrow money. You may find yourself feeling anything from shame at being unable or unwilling to help financially, to resentment for being asked in the first place. And if you do decide to loan money, you may find yourself silently judging every financial choice they make while you wait for repayment, and wondering when and how you can ask for the money back.

The best way to nip arguments about loans in the bud is to set clear expectations in advance.

To start, that means saying no if you're unable to extend the loan. If you're not in a position to lend money to your loved one — whether it's your financial situation or your emotional situation — then you need to tell them that you can't help them that way. Don't say you can't afford to loan them money, since that can be construed as an invitation for your would-be borrower to question every purchase you make. You can make it clear that you do care about their situation by asking if there are any non-financial ways you can help.

If you do decide to loan them money, treat it like a formal loan. Tell your borrower that you require a written contract with the repayment terms spelled out, including what will happen in case of a missed payment. There are free templates for promissory notes available online that can help you draw up the contract. Having this in place will make it clear to your borrower that you're treating the loan as a serious transaction. These boundaries will also ensure that you preserve the relationship.

If your loved one feels affronted by these terms, remember that you don't need to manage their reaction to your financial requirements. They are the potential borrower, which means you, as the lender, get to set the terms of the loan.

Don't let money get in the way of your relationships

In a perfect world, money would never come between you and your loved ones. But in the real world, money disagreements can cause a great deal of resentment and distress. However, setting firm boundaries and talking openly about your priorities can help you keep money arguments from turning extremely ugly.

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This article is from Emily Guy Birken of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

How to Get Your Spouse on Board With Budgeting

Emily Guy Birken — Mon, 15 Jul 2019 08:00:06 +0000

Money is the most common cause of stress in relationships, according to a study conducted by The Harris Poll, and fights about finances are often cited as the reason for divorce. Couples struggle to get on the same page about their finances because they don't have a shared budget or regular conversations about money. Unfortunately, avoiding the budgeting discussion will do nothing to improve your money stress or your bottom line. It doesn't do much to avert fights about money, either.

But even if you know all this, your spouse may not be willing to embrace the joys of budgeting. In fact, just bringing up the subject could prompt your partner to leave a person-size hole in the wall as they make a hasty exit.

Here's how to bring a spouse on board to the necessities of budgeting if they're reluctant to try it. (See also: 4 Money Fights Married Couples Have (And How to Avoid Them))

Start by dreaming big

Budgeting is really all about figuring out how you can have the things you want most in life. But most people think of budgeting as deprivation and spreadsheets, which is no one's idea of fun.

So to get your unwilling spouse on board with budgeting, start by having conversations about what you both want in life. For instance, you might ask your partner what they would do with a million dollars. Not only will this conversation be fun — it's thrilling to think about these kinds of dreams — but it also provides a great jumping off point for starting a budget.

After your big dreams conversation, you could open a new savings account specifically for the trip to Egypt your spouse has always wanted and start putting aside $5 a week. This shows your spouse that you're taking their dreams seriously, and that a cruise up the Nile is more than just a fun fantasy. Once there's a real trip or other goals that you're working toward, it can be a lot easier to get a reluctant spouse excited about budgeting. (See also: 5 Steps to Successful Budgeting)

Work solo on a budget, but ask for input

In every marriage, there are tasks that one spouse takes over because the other spouse isn't interested in handling it. Maybe she handles all the lawn care while he does the grocery shopping and cooking. So there's nothing wrong with creating a budget by yourself if your spouse has made it clear that they're not interested.

However, even if your partner says they want nothing to do with budgeting, it's still very important to make them part of the process. Put together your monthly spending plan solo, but ask your partner for their opinion after you're done. Not only will this show them that you care about their input, but they may also have a different viewpoint of various spending categories. For instance, if your partner handles the cooking, they may recognize when you have over- or under-budgeted for grocery shopping.

In addition, you can potentially ask your spouse if there are any places to trim the fat that you hadn't thought of. If you've already started setting aside money for a big dream you share, this will make this request even more motivating, since your spouse will recognize that you're trying to reach that dream faster. (See also: 11 Budgeting Skills Everyone Should Master)

Let your budget work its magic

While budgeting is much easier if everyone is on board, you can still improve your bottom line and reduce your stress while working by yourself. Even if dreaming big and asking for input don't motivate your partner, seeing a budget actually work can make a big difference.

For instance, let's say you and your spouse find yourselves stressed and scrambling every six months when it comes time to pay for car insurance. Since you've started implementing your budget, you've decided to put aside $75 per month toward that bill. When it comes due, instead of feeling overwhelmed and panicked like you normally do, the amount of money you need is already set aside and ready.

Simply sharing this win with your spouse could do a lot to bring them around to the benefits of budgeting. This is especially true if you used to have arguments or stressful scenes every time this bill came due.

Celebrate the wins together

Pointing out the ways that things are improving is a great method for encouraging your spouse to take ownership of your budget. For instance, if you spend less on dining out because you're making more of an effort to cook at home, you could ask for their input on how to celebrate. You might say:

"Check out how much we saved this month by cooking at home! I'd like to put most of it toward our credit card debt, but let's think about how we can enjoy some of this saved money. What do you think we should spend it on?"

Sharing the benefits of your budget with your spouse, even if they haven't done the same budgeting work that you've put in, can help make it clear that your budget is a joint endeavor.

From reluctance to excitement

The majority of budgeting fears stem from a sense that it will be both boring and limiting. Bringing your spouse on board means showing them that budgeting offers both fun and freedom. Consistently focusing on big goals, doing the budgeting work yourself while always asking for input, letting the budget do its job, and sharing the wins can all help your foot-dragging spouse to embrace the budget.

In time, your spouse may even say those three little words everyone wants to hear from their sweetheart: "You were right."

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This article is from Emily Guy Birken of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

4 Ways to Come Clean When You've Been Financially Unfaithful

Denise Hill — Thu, 25 Oct 2018 08:00:11 +0000

Financial infidelity is a real thing. It can ruin relationships and financially devastate families. You've probably heard stories of people hiding accounts, buying big ticket items without their partner's knowledge, or cleaning out a joint bank account. Infidelity ruins trust and robs the relationship of financial stability and security.

But what happens if you're the one who's been unfaithful? How do you correct the issue and change course? And most importantly, how do you win back your partner's trust and repair the damage?

Addressing your financial unfaithfulness starts with honesty — which is a tough and scary thing to do. Here are a few ways to come clean after financial cheating. (See also: 8 Signs You're Committing Financial Infidelity)

Understand why you've been unfaithful

Before you drop the bombshell on your partner, it's a good idea to take a moment and understand why you did it in the first place. You really have to become introspective and do a bit of soul searching to understand your motives.

The key is to be honest with yourself.

Your reasons could be deep-seated issues that stem from your childhood. Or, they could be a simple momentary lapse in judgment and self-discipline. You could be driven by fear, lack of trust, or maybe you've just been given bad advice. It's important to unearth your fears, hidden control issues, or whatever is driving you to exhibit this behavior.

It's also important to remember and convey to your spouse that your reasons don't excuse your behavior. Understanding facilitates correcting the behavior, but it doesn't absolve the wrong or heal the hurt. (See also: 4 Money Fights Married Couples Have — And How to Avoid Them)

Repent with remorse

When you do reveal what you've done, be upfront and open. It's important that you don't try to downplay or sugarcoat your actions. And don't blame your partner for driving you to do what you've done. Your partner's actions may have contributed to your decision to be dishonest, but the onus is on you.

It's also important that your confession is accompanied by a sincere and heartfelt apology. Most people need to see or feel remorse in order to begin the process of forgiveness. Showing remorse places you in a posture of humility and displays that you understand — to some degree — the depth of your actions. Give your spouse space to be angry and don't allow their anger to make you angry.

Of course, the more egregious the infraction, the more you may need to apologize. Spending the grocery money on shoes can be wiped away with a simple sincere apology. However, stealing your partner's identity to finance a motorcycle you've kept hidden in a storage shed across town requires more than a shoulder shrug and flippant "Sorry."

Implement accountability and transparency

After you have confessed your financial infidelity and apologized to your spouse, you need to add some sort of reassurance that this won't happen again. At the very least, assure them that you are working to correct the issue. And that requires more than just a verbal statement.

Most people are inherently good, but the fear of consequences and having to account for your actions also keeps you on the straight and narrow. Every time you think about robbing a bank, you might think about The Shawshank Redemption and quickly reconsider. Accountability gently nudges you in the right direction. Accountability is your friend.

Adding an accountability component provides a safeguard for both you and your partner. It shows that you are truly working to correct the issue. It can be something as extreme as adding your spouse to your bank and/or credit card accounts, or simply allowing them to review your statements with you each month. The key here is to do something that requires you to be accountable and transparent to someone else, and that provides some sort of preventive measure to stave off future occurrences. (See also: 4 Money Challenges That Will Strengthen Every Relationship)

Write your spouse a note

Communicating difficult things to someone you love is not only gut-wrenching, but it can also be tricky. Especially if it's something that will hurt them. Writing your spouse a letter explaining yourself is a great way to get things out in the open and start the conversation.

This is especially true if verbal communication is difficult for you or if your partner is explosive or talks over you. It allows you to process your thoughts and explain exactly what you've done and how you feel in a clear and concise way. Keep in mind, it shouldn't take the place of a face-to-face conversation — it's merely a way for you to analyze, process, and explain things in a controlled environment before sitting down to talk further.

When penning your letter, make sure you follow the steps previously outlined. First, ensure you understand why you committed the infraction. Then, explain exactly what you've done in detail. Take full responsibility for your actions and explain your reasons for making the choices you've made. Make sure that you express remorse and sincerely apologize for your actions. From there, you want to propose a plan of action that allows you to be more accountable to your partner and ensure that this type of thing doesn't happen again. You also want to give your spouse room and permission to feel hurt, betrayed, and angry.

Financial infidelity is serious and can ruin a relationship, especially if the infidelity is continuous. Your reasons for coming clean shouldn't be to rid yourself of guilt or to tell on yourself before your spouse finds out. It should be done because you understand that you've wronged your partner and want a relationship that is open and honest. (See also: 5 Money Conversations Every Couple Should Have)

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This article is from Denise Hill of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

4 Money Challenges That Will Strengthen Every Relationship

Denise Hill — Tue, 26 Jun 2018 12:41:09 +0000

Mixing love and money is tricky. In fact, a recent study conducted by Dave Ramsey and Ramsey Solutions found that money is the second leading cause of divorce. Infidelity is number one. The study concluded that debt, communication, and attitudes about money and spending habits keep couples broke and disgruntled.

Money challenges are the ultimate team-building activities for couples. When done correctly, they can expose areas of pain and fear, open or improve lines of communication, and help you become a more disciplined unit.

Whether you are newly married, been together for a while, or are on the cusp of divorce, engaging in a financial challenge — as a couple — could improve or even save your marriage. The challenges themselves aren't magic. You have to commit and do the work. They can, however, assist you in revamping how you view and handle finances as a pair.

Here are a few money challenges that every couple should try. (See also: 4 Ways Couples Can Tackle Money Goals Together)

1. One Income Challenge

The One Income Challenge is a doozy. This isn't the type of challenge you wake up one morning and just begin. No, this one takes preparation and planning — which is what makes it such a great challenge for couples. The goal is to get your overhead and bills so low that you can live off just one income for at least one or two months. That doesn't mean that you only spend from one persons' paycheck — the goal is simply to save the sum of what one of you brings in monthly.

This challenge will not only save you a ton of money, but will also fling open the doors of communication. You have to talk during this challenge to ensure things are paid on time and both parties know exactly what they are allowed to spend. It really takes a concerted effort to do this. It will also allow you to see what you could accomplish if you could reduce your overhead and live off one income long term.

Becoming a one-income household is also something you could aspire to in the future. So, if you can't live on one income today, make it your goal to be there this time next year or in two years. Even if you never reach your goal, you're still way further than you were before you started. Your wallet and your marriage will benefit from your efforts. (See also: How to Go From Two Incomes to One)

2. The Cash Only or No Credit Challenge

The Cash Only Challenge is less extreme than the One Income Challenge, but it's still very difficult — especially for those who rely heavily on credit. During this challenge, you only spend cash for everything that is not drafted automatically or requires you to pay online. The goal is to pay with cash as much as possible for the duration of the challenge.

The reasoning behind this challenge is that paying with cash causes you to plan and to think about purchases before you actually buy something. With cash you can only spend what you have. Overspending is not an option. Paying with cash will also help you track expenses easier and it will develop your discipline muscle. If you allocate $250 for groceries but spend $75 on shoes, you only have $175 left for groceries. Once the cash is gone — it's gone.

A great way to modify this challenge for those who are wary of carrying cash is to only use your debit cards. Take all of your credit cards (your spouse's too) and put them in a drawer. Only spend what you actually have in your bank account. This modification lowers the degree of difficulty, but it still remains challenging. (See also: 5 Money Conversations Every Couple Should Have)

3. The 50/50 Challenge

I read about this challenge on CoupleMoney.com and I fell in love with the concept. The concept of the 50/50 Challenge is twofold: spend less and earn more. You and your spouse should work to reduce your monthly cost of living expenses while simultaneously figuring out ways to earn more money during the challenge.

This challenge will not only do wonders for your savings, but it is also the ultimate team-building exercise. You learn where you can cut and how you can bring in more during lean times. Together, you and your spouse can set savings and earnings goals and find creative ways to cut costs and earn a little extra. You can organize a yard sale, sell stuff online, or get side gigs. The possibilities are endless. (See also: 14 Best Side Jobs For Fast Cash)

4. No Shopping Challenge

The No Shopping Challenge is a pretty popular money challenge. The goal is for you and your spouse to eliminate any unnecessary spending. During this challenge, you buy only the basics. This means forgoing luxuries such as dining out, getting your hair done, and anything else that is not an absolute necessity. You take your budget down to its bare bones.

A twist that my husband and I like to add is to write down every single thing we are spending money on for the month. So, in lieu of writing "groceries," we would actually add the entire grocery list to our list of expenses. And if we forget to list something, we do without it for the month. This really improves communication and ensures that you are working together and planning every dollar you spend.

You can modify, rework, and mix and match any of these challenges to fit your particular situation and lifestyle. The goal is not to follow a challenge verbatim — the goal is to do something that takes you out of your comfort zone and changes your perspective about money and marriage. (See also: 8 Steps to a Blissful Matri-Money)

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This article is from Denise Hill of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

How to Agree on the Perfect Home With Your Spouse

Ashley Eneriz — Mon, 04 Jun 2018 08:30:17 +0000

Buying the home of your dreams can be a thrilling process — until you find out that you and your spouse cannot agree on anything. House hunting with someone that has different tastes or priorities can slow down the process and make every home you look at a disappointment.

Here's how to find the perfect home for you and your spouse, even if you can't agree on every little thing.

Make separate wish lists

You and your spouse should both write out your 10 must-haves for your new home. If you have more than 10 items, narrow it down so that you focus on the highest priorities. Let's be real: You can live without a claw foot tub in the master bathroom, but you might be at your wit's end if you have to deal with a small, cramped kitchen.

Once you both have your lists made, highlight any items that are matching. If you can find four to six matching items, you are off to a great start. Those should be the items you focus on. All non-matching items on your list then need to be rated as "must-have" or "nice to have, but can live without." This will allow you to narrow down your search and save time when looking for the perfect home.

Determine the big non-negotiables

Some things are non-negotiable, such as price or neighborhood. If you know that you can only spend so much money or that you only want to buy in a certain area, it helps you both to get on the same page. I recommend sitting down and agreeing on a maximum budget before even starting the home tours.

When you are dealing with hundreds of thousands of dollars, going $20,000 over budget for your dream home may not seem like a big deal, especially when you have 30 years to pay off the debt. However, in addition to adding cost to your monthly mortgage payment, going over budget can also add tens of thousands of dollars in interest over the life of your loan. It is important to know exactly how much you will be paying each month for your mortgage, as well as an estimate of yearly property taxes. (See also: 8 Signs You're Paying Too Much for Your Mortgage)

Find the compromising points

When you and your spouse have two conflicting must-haves on your list, talk through them. Listen to why they want a certain item and share your feelings about why you do not want the item. For example, if your spouse wants to live close to the city so the commute to work is shorter, but you don't want to be close to the city for safety reasons, you should both present your side of the argument respectfully. Figure out if there are any other pros or cons to the situation. For example, perhaps living closer to the city also means more traffic and higher home sale prices.

Be willing to compromise on issues that aren't that important or can be remedied. For example, if your spouse is adamant about having an extra bedroom for an office or home gym, and you couldn't care less either way, respect that it is important to them. On the other hand, if your spouse wants a swimming pool but you are unsure because you have an infant, you may be more open to the idea if the pool comes with a secure gate. (See also: House Hunting? These Features Will Save You Big Over The Long Haul)

Look at the potential, not the actual

When you look at homes, there's a good chance that only a small percentage will be anything close to what you consider your dream home. Even if you find your dream home, there is an even bigger chance that the home will be out of your budget. The solution? Stop looking at houses as they are and start honing in on their potential.

If you or your spouse have items like "granite countertops and stainless steel appliances" or "office with built-ins" on your list, realize that these features can be added to almost any home. Gaining a Pinterest-worthy bathroom or a backyard with a deck to entertain and lush grass are also things that can easily be done for another $10,000 to $15,000. However, wish list items like a big kitchen, two-stories, nice neighborhood, or three-car garage are harder (sometimes impossible) and costlier to add after you buy a home.

It is also important to realize that many homes just need quick cosmetic changes to become desirable. You have to look past poor paint color choices, neglected yards, gross flooring options, and clutter. When my husband and I looked at the home we live in now, I was discouraged by the size of what were to be the children's bedrooms. In pictures and in person, the rooms looked tiny because the owner had queen-sized beds in them and large dressers. It wasn't until we moved our furniture in that we realized the rooms were bigger than most standard bedrooms. (See also: 9 Modern Home Improvements That Add Thousands to Your Listing)

House hunting can be exhausting, but don't let it ruin your marriage. Be willing to talk through the process and don't be afraid to bring a trusted, unbiased friend to help you narrow down the choices.

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This article is from Ashley Eneriz of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

How a New Marriage Can Survive Student Loan Debt

Matt Bell — Tue, 29 May 2018 08:30:47 +0000

It's a very common scenario. Girl meets boy, they fall in love, and decide to get married. They're excited about starting their new life together, but they're also weighed down by student loan debt — a lot of student loan debt. As they drag that heavy ball and chain into the future, what steps can they take to tilt the odds of marital and financial success in their favor? If that's your situation, read on.

1. Understand the details

Good communication is essential to the success of any relationship, and while money can be a tough topic, you'll get your marriage off to a great start by getting accustomed to talking about your finances. You might as well dive right in and start with your debt.

No matter which one of you is bringing debt into the marriage, both of you should know exactly how much debt. You should also be clear about the interest rate, the monthly payment amount, and how long those payments will continue.

That will help you to both manage your expectations about when you might be able to buy a house, how much you can spend on vacations, and all the rest. (See also: The 7 Worst Money Mistakes Married People Make)

2. Be one in debt

Marriage is about oneness, unity, and teamwork. You're not becoming roommates; you're becoming husband and wife. So, if one of you was wealthy and the other was not before getting married, after you get married, both of you will be wealthy. By the same token, before marriage, if one of you had debt and the other did not, once you're married, both of you will have debt.

When my friends Scott and Karen Coy got married, Karen had more than $50,000 of nonmortgage debt. Scott jokingly referred to it as "a reverse dowry." After getting married, Karen often expressed how bad she felt about "my debt." But from day one, Scott would correct her, saying it was "our debt."

It took them six-and-a-half years to become debt-free. All that time, they rented even though they would have preferred to buy a house. It took great patience and perseverance.

Karen says she will always remember the day they made their last payment. It was as if a huge weight had been lifted from their shoulders. And looking back, she says the way they navigated the journey — together — created an inseparable bond in their marriage.

3. Consider being two in taxes

If you were using an income-based repayment plan before getting married, how you file your taxes after you get married will matter greatly. If you file jointly, your payment amount may go up. That's because income-based repayment plans require you to "recertify" each year by submitting your income tax returns to your loan servicer, who will now make decisions based on your joint income. So, you may want to consider filing separately, in which case most student loan plans will use just the borrower's income as the basis for recertification.

However, filing separately may make you ineligible for certain tax credits, so proceed with caution. It would be best to consult with an accountant or run some what-if scenarios with tax-planning software.

4. Figure out the implications for your budget

Before deciding where you'll live after you get married, create a post-marriage cash flow plan. What works best is to fill in your financial commitments first. How much of your joint income will you save and invest? How much will you give to charity? And how much will you need to devote to debt repayment?

Then you can see how much you can afford for rent or a mortgage. I usually recommend committing no more than 25 percent of monthly gross income to the combination of your mortgage, property taxes, and homeowners' insurance. If you rent, devote no more than 25 percent to your rent and renters' insurance.

A student loan payment, however, changes the math. I recommend that the combination of your housing and your student loans together make up no more than 25 percent of your monthly gross income. So, you should figure out what percentage of your monthly gross income your loan payment amounts to and subtract that from 25 percent. The answer is the percentage of gross income you could devote to housing while you have student loans.

If your student loans amount to an especially large percentage of your gross income, that may end up being overly restrictive. So, you'll have to adjust other spending categories downward, such as entertainment, clothing, or vacations. (See also: 3 Simple Ways to Split Bills With Your Spouse)

5. Prioritize early payoff

The early years of your marriage present a great opportunity to speed up the process of getting out of debt. If you want to have kids one day, your pre-kid days will be the most financially flexible time you may ever experience. Make the most of it by making extra payments on your loans.

Debt can be a roadblock in the pursuit of financial goals such as buying a home, and it can be a hindrance to a happy marriage. So, consider building your lifestyle on just one income and putting most of the other paycheck toward your student loans. By living an especially frugal life in the early years of your marriage, you'll be setting yourselves up for long-term success. (See also: 7 Ways Paying Off Student Loans Early Can Boost Your Finances)

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This article is from Matt Bell of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

6 Ways to Boost Your Partner's Bad Credit Without Risking Your Own

Mikey Rox — Tue, 08 May 2018 09:00:13 +0000

You can't help with whom you fall in love — and that's never more annoying than when the object of your affection has royally effed up their credit. Nobody's calling it quits over a few past financial mistakes, but the situation will need to improve if you two are planning a future together that includes buying a home, starting a business, or other major money-based life decisions.

Since you're now in this together, you have a responsibility to do what you can to make sure you start your joint life on the right foot credit-wise. Here's how.

1. Help your partner review their credit report to flag and report errors

If your partner has terrible credit, it's likely that they don't know how to pull their credit report, flag errors, and report them to the appropriate authority to have them removed or updated. That's where your expertise (or even elementary knowledge) of how credit reports work comes in. Flagging and reporting credit errors is the first step in getting their situation back on track and under control. Once that's squared away, you can move on to the bigger issues. (See also: How to Read a Credit Report)

2. Provide positive reinforcement instead of bailing them out

It's easy to throw money at a problem to make it go away — especially if you have extra cash to spare and the person you love will benefit immensely from your generosity (at least in the short term). But I urge you to avoid opening your wallet to deal with your partner's bad credit. Instead, provide encouragement that they can manage their debt on their own.

They created this situation, after all, and the only acceptable solution is that they work it out without your financial assistance. Help them in other areas, like navigating their credit report, but don't shill out dough to dig them out. The only thing they'll take away from that scenario is that you'll always be the sucker who pays for their poor judgment.

3. Establish a cash allowance that you'll both adhere to

You can't take your adult partner's credit cards from them (even though you might like to), so an easier-to-swallow solution is to jointly stop using credit and instead switch over to an all-cash budget. If they feel like you're both in this together, they'll be more willing to comply. You might have to make a few sacrifices along the way with your cards not available, sure. But if it helps condition your partner to spend and save smarter, forgoing the treat-yo'-self impulse buys you're used to will be worth it. (See also: How to Put Your Spouse on a Budget Without Ruining Your Marriage)

4. Brainstorm actionable ways they can start chipping away at their debt

Sit down together and come up with ideas about how your partner can start paying down their debt faster. That may involve asking for a raise at work; picking up a part-time job; working a few side gigs, like driving for a ride-sharing service and pet sitting; selling off unwanted or unused valuables; downsizing their lifestyle (maybe it's time to move in together so both of you can save?); and canceling all frivolous monthly expenses, like subscription services and memberships. (See also: 5-Day Debt Reduction Plan: Pay It Off)

5. Schedule autopays on pay days

Help your partner set up auto-payments that coincide with their paydays so the money goes straight from their checking account to their debt accounts, leaving them little time to start a spending spree before handling their financial responsibilities. (See also: 5 Ways to Automate Your Finances)

If your partner doesn't like the idea of auto-paying bills, maybe they could get on board with a regular money meeting where you both sit down each week or month to discuss your budget and bills and make payments in each other's presence. It's a way to keep each other accountable, build trust, and establish good money behaviors. Either of these options will make sure the bills are getting paid on time.

6. Discuss secured credit card options

If your partner's credit score is weak, you can help improve it by encouraging them to open a secured credit card. Secured cards are fairly easy for anyone to get because the risk to the bank is low. That's because the cardholder puts down a deposit that's typically the same size as the credit limit (which will be low to begin with). If the cardholder defaults on the payments, the bank keeps their deposit.

Secured cards are great for building credit because your payment activity is reported to the credit bureaus, just like any other credit card. "After demonstrating consistent payment history, your credit score will steadily improve," says certified financial adviser Lou Haverty. "You could consider applying for a regular credit card when your score is in the high 600 to low 700 range."

I took my boyfriend to the bank to get a secured card after he moved in with me because I wanted him to start rebuilding his weak (but not necessarily bad) credit. This was an important step for us to take early on because I want him to have decent credit if we decide to buy a house together a few years down the road. Sometimes that's how long it takes, so there's no time like the present to start working the system. (See also: The Best Secured Cards)

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This article is from Mikey Rox of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

7 Life Choices That Are Actually Financial Decisions

Tim Lemke — Fri, 04 May 2018 08:00:11 +0000

Life is filled with decisions, some of which can seem very consequential. You will make choices about your career, living situation, relationships, education, and your family. Emotion will be a big driver of your decision making in these cases. But these big life choices should also be viewed with a financial lens.

Whether we realize it or not, some of the key moments of our lives are actually financial decisions in disguise. Let's take a look at the major life choices that can impact your finances.

1. Choosing a college

In an ideal world, we'd pick our college based on the quality of its education, the beauty of its campus, and other factors having nothing to do with money. But most of us also look at the expense. College is costly and is not getting cheaper. It's possible for a family to drop more than a quarter of a million dollars for a four-year degree, potentially saddling a student with loans that will take years to pay off. Thus, the college choice is increasingly one that involves financial considerations.

What is the cost of tuition and housing? Is it better to attend school in-state or out of state? Should I attend a public or private university? Do I qualify for grants or scholarships? Will I be able to get a part-time job and attend school at the same time? These are the questions that often trump all others. (See also: How Much Is Too Much to Pay for College?)

2. Choosing a college major and career

So you've decided to pursue your passion and study to become a marine biologist. This can be a noble and satisfying profession. But have you examined what a marine biologist earns? Are jobs plentiful and stable? Do you know whether you'll need to remain in school for years to get an advanced degree?

It's fine to go after a career that you think will bring you happiness, but it's sensible to also take financial matters into account. There has been renewed talk about the "return on investment" for various college degrees. Like it or not, a business major is more likely to earn a high salary than someone who majored in English Lit. The potential earnings for a college major are especially relevant for those who expect to have heavy student loan debt upon graduation. (See also: 5 Jobs That Pay Over $50K and Don't Require a Bachelor's Degree)

3. Where to live

When I first started out in my career, I had dreams of grabbing my own apartment and living it up in the city. Then I got my first measly paycheck and realized that I had to think differently about my living situation.

When you think about the area of the country or the community you wish to live in, you may consider the weather, the cultural attractions, and the proximity to friends and family. But there's also a good chance that you're examining the job market, the cost of housing, and the educational system. And those are financial considerations. You may like the idea of moving to the mountains of Wyoming, but change your mind when you realize there aren't many jobs in your field of choice. You may be drawn to the lifestyle of the San Francisco Bay Area, but may reconsider when you look at the cost of living. (See also: Here's How Much Life in the Big City Will Cost You)

4. Getting married

Yes, marriage is about love. But it's also about combining each others' assets and debt. It's about setting up a joint bank account. It's about filing taxes jointly and taking advantage of tax breaks. It's about creating wills and buying life insurance. It's about being on the same page in terms of spending and budgeting and deciding whether to lend money (again) to your spouse's deadbeat cousin. It seems unromantic, but getting married is as much a monetary decision as an emotional one. (See also: 9 Surprising Ways Marriage Can Make You Richer)

5. Having children

It costs about $13,000 a year to raise a child, according to the U.S. Department of Agriculture. That means you'll shell out nearly a quarter-million dollars before a son or daughter turns 18. The expenses are seemingly endless. Food. Clothes. Education. Activities. Stuff. Children will add joy to your life, but remove money from your bank account. If you are considering having a child, have you taken the financial realities into account? (See also: 7 Signs You're Financially Ready to Start a Family)

6. Caring for elderly parents

We want what is best for our parents as they age. We want to ensure they get the best quality care and are happy in their environment. If our parents can no longer live on their own, it may be time to examine assisted living centers, in-home nursing, or other options that can vary widely in cost. You may also choose to have a parent move in with you, which can drastically change your own household budget.

Decisions about elder care can also impact your career. What if you have to take time off work to care for an elderly parent? What if you are forced to leave a job because it does not offer the flexibility you need to be there for Mom or Dad? These aren't just emotional decisions, they're huge financial ones. (See also: 6 Financial Steps to Take When Your Aging Parents Move In)

7. Retiring

We all want to reach a certain age and simply say, "OK, I'm done working." It'd be great to hit age 63 and simply walk off into a life of travel and leisure. But the ability to do that must come with the knowledge that you can afford it.

Retiring requires long-term planning to accumulate enough wealth so you can stop working. It may also involve a review of Social Security benefits to determine whether it's more financially advantageous to retire later. The key here is to think of retirement as a financial decision from the get-go. Set a target age for retirement and develop a smart and comprehensive financial plan to get there. With proper financial planning, you can retire when your heart and mind tell you to. (See also: 4 False Assumptions That Could Threaten Your Retirement Years)

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This article is from Tim Lemke of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

4 Ways Couples Can Tackle Money Goals Together

Denise Hill — Wed, 02 May 2018 09:00:08 +0000

The "relationship goals" meme revolves around the idea that — at least in the world of social media — your relationship is envied by singles and mediocre couples everywhere. And whether you realize it or not, a big part of having a successful marriage and reaching that "goals" status is figuring out the financial aspect of your relationship.

Money itself isn't a homewrecker. It's other issues — like communicating about money, your relationship with it, and your values associated with it — that cause problems. Establishing a strong money management system within your marriage can be tricky. Here are a few things you and your spouse can do to set and achieve financial goals as a couple.

Establish financial core values

Like it or not, your spending habits directly reflect your values. You say you want to save and get out of debt, yet you eat out five nights a week and upgrade to the latest gadget as soon as it hits the market, despite the cost. And while you may feel that lack of discipline is to blame — and it is to some degree — the truth is you don't value saving enough to actually do it.

As a couple, you should sit down and write out the core values that will govern your lives together. Most of these values may not directly relate to money, but they all relate indirectly. For example, if you value open and honest communication, that should trickle down to your finances. You have to commit to communicating openly and honestly about spending habits, earnings, debts, etc. And you shouldn't "hide" money from one another.

Be honest with your spouse and yourself when establishing your value system. Some things sound nice, but they may not be a part of your value system. And that's OK. If your spouse values something — such as saving — that you don't, be flexible and compromise a bit. The same is true if you have a "spender" spouse who values spending money on entertainment. You've got to give a little. You value what you value. There shouldn't be shame or judgment attached to it. The key is finding balance and learning how to get your spending habits to accurately reflect your value system. (See also: 8 Things I Learned About Money After Getting Married)

Have joint financial goals

The second thing you and your spouse should do is establish financial goals together. An easy way to do this is to look at your life goals — long- and short-term. Align your finances with those goals.

As a couple, what do you want to accomplish? Do you want to retire early? Live a debt-free lifestyle? Have a small army of children? Travel the world? Care for aging parents? Start a business? Go on a second honeymoon? Once you've established your life goals, your money goals will emerge naturally. You and your spouse just have to fill in the details.

How will you save to afford that Jamaican getaway? Will you get side gigs, cut back, or follow some other plan for saving? The key here is to align your financial goals with your life goals. And then work diligently to achieve them. (See also: The 7 Worst Money Mistakes Married People Make)

Assign money management roles

After you've established your core values and set some financial goals, it's time to address the details of handling your money. A great way to relieve tension and help ease the financial power struggle is to assign money management roles within your marriage.

One of the best things about marriage is that you have a teammate. In most marriages, one spouse enjoys certain activities, while the other spouse doesn't. One may be a cleaner and the other one loves to cook. One loves yard work and the other is a decorator. One may be a planner and the other one likes to live spontaneously. The point here is to make the most of each other's strengths and preferences.

Assigning roles and tag-teaming your finances is a great way to make each other feel valued and quickly accomplish your money goals. If you are a shopper and your spouse loves to budget, allow them to manipulate the numbers while you make it work in the grocery store. Both tasks are equally important. Shopping — which is different from just buying stuff — is an underrated skill. Budgeting, saving, and shrewd shopping are the trifecta of good financial stewardship and will accelerate your journey to achieving your financial goals. (See also: 3 Simple Ways to Split Bills With Your Spouse)

Have at least one joint account

Having a joint bank account is more intimate than sex for some couples. It's a big step and the ultimate sign of trust. It puts you in a place of vulnerability. And being that vulnerable can be tough.

The key is to take baby steps toward your goal of sharing the same account. It begins in your own mind. Examine fears, perceptions, and past experiences that have left you skittish in this area. See what you can do to talk yourself into being open to the idea.

Once you're open to the idea, it's time to engage in honest communication about it. It can be a very difficult subject, but you have to have the conversation.

Once you've heard each other's fears and misgivings, you can move forward and establish ground rules and procedures. You could create an account together just to pay bills or strictly for saving. See how that goes and move forward from there. There is no one-size approach to mixing love and money, but you do have to be open-minded and at least give your partner an opportunity to earn your financial trust.

Sharing an account can do wonders for your marriage and help you reach your financial goals much quicker. When done correctly, it creates an atmosphere of transparency and accountability. It also promotes the team concept.

If you've established your core values, established long- and short-term financial goals, and have clear roles, making the step to sharing an account will be much easier. Again, this is a difficult bridge to cross for a lot of couples. Remain patient with yourself and with your spouse. And do what is best for your marriage and situation. (See also: 6 Things You Should Know About Joint Checking Accounts)

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This article is from Denise Hill of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

Why You Should Stop Keeping Your Money Problems to Yourself

Max Wong — Thu, 05 Apr 2018 09:00:06 +0000

It's hard to talk about difficult money problems. But keeping it all to yourself makes it harder, and more costly, to get out of debt. Don't believe me? Here are some things you are missing out on by staying silent.

An honest marriage

Secret bank accounts are not just for Don Draper. In a 2017 poll by CreditCards.com, 5 percent of respondents confessed to financially cheating on their partner in the form of secret bank accounts and credit cards. When extrapolated to the entire U.S. adult population, that means 12 million people are hiding secret accounts.

Obviously, getting caught in a financial lie by your romantic partner is going to breed general mistrust. And even if your spouse isn't technologically savvy enough to suss out your money dalliances, if you ever need to file joint taxes or pool your resources to secure a mortgage, all your secrets will be laid bare during a routine credit check or audit.

A lack of transparency can thwart your relationship and your goals. Squabbles over money are the number one reason for divorce, and unfortunately, new romances rarely begin with a discussion on how to save for retirement. Many couples discover each other's debt only when it becomes an obstacle too large for one person to manage.

Lying about your money problems prevents you from working as a team and efficiently leveraging shared assets. Couples who communicate regularly and honestly about money not only have a better shot at maintaining a happy union, they have a better chance at achieving financial goals because they are on the same page about things that can dramatically impact their lives — like saving for their kid's college fund or paying down a home loan. (See also: 5 Painless Ways to Manage Money With Your Partner)

A community of friends

If you keep your financial problems secret, you deprive yourself of moneymaking or money-saving opportunities your social network could provide. A lot of people get tremendous pleasure out of helping others. Let those people help you by giving them a problem to solve. For example, someone you might know may have the perfect job for you.

If outing yourself to your friends and family as a poor person is too hard, reach out to like-minded strangers. The internet is full of websites, blogs, forums, and other communities that are great for sharing resources. More importantly, an active community can come up with solutions custom-tailored to your situation.

Mental health

There are numerous ongoing studies that show the link between poverty and mental illness. But if you have ever been poor, you don't need scientific proof that poverty degrades mental health or that money really can buy happiness. You know first hand that poverty leads to depression that, in turn, makes it harder to rally against poverty. It's a vicious cycle.

Self-care groups like Debtors Anonymous can help with managing the stress that comes with financial dysfunction. In addition to providing a safe place to emotionally vent, these groups also offer targeted programs for small business owners, people who have financial problems due to under-earning, or compulsive shoppers. (See also: 9 Ways Money Does Buy Happiness)

Debt reduction

Be proactive about calling your creditors. Your creditors already know all about your debt, so there is no downside to reaching out to them. Actual, feeling humans work at credit card companies, insurance agencies, banks, and even the IRS. Let those people help you find a path back to creditworthiness.

Talking honestly with creditors lets them know the context of your financial problem and also your willingness to pay down your debt. Debt collectors are more likely to go soft on someone who they know is paying down debt from a self-inflicted disaster than they are on someone who won't answer the phone.

Beyond peace of mind, letting bank fees and fines stack up just makes it that much harder to get out of debt. Even if you can't break your cycle of poverty immediately, often you can get a little relief just by calling and asking for help. Did you get dinged with a $35 overdraft charge? Call your bank. Most banks give a once-a-year opportunity to erase one bank charge. Screw up your tax paperwork? Call the IRS. If your money woes came from an honest filing mistake, IRS workers actually have a lot of leeway when it comes to reducing fines, sometimes back to a zero dollar amount. (See also: 5-Day Debt Reduction Plan: Pay It Off)

An authentic life

Ask yourself: Are your problems with money really about the money? I have many friends, who, even though they make a much larger salary than I do, are never happy. They spend an inordinate amount of time fretting about how much less they have than our even richer friends. They also waste a ton of money purchasing the trappings of wealth rather than actually investing their money to build actual wealth.

Personally, I am willing to admit that I get a little emotional lift when people compliment my too expensive, but so adorable shoes. Sadly, I never feel the same burst of satisfaction when my tax accountant compliments my 401(k). So, I know the tyranny of sameness, and that sick desire to match the (often imagined) wealth of the people around me. (See also: 4 Money Lessons You Can Learn From the Joneses)

Are you keeping yourself poor? Not just financially poor, but emotionally, intellectually, or even spiritually poor? Would an honest conversation about your finances actually destroy relationships with your friends and family? Would taking a pay cut to take a job that you love make you feel more stressed than keeping a higher paying job that you hate?

Even if life has dealt you a bad hand, what do you gain from suffering in silence and isolation? Nothing, which can make your debt burden all the more difficult to bear.

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This article is from Max Wong of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

9 Surprising Ways Marriage Can Make You Richer

Tim Lemke — Mon, 19 Mar 2018 09:00:06 +0000

Marriage can be a wonderful thing, and not just because of the potential for lifelong companionship. Tying the knot can be a great financial decision, too.

When you get married, you'll be eligible for some key tax breaks, and there are a number of other advantages that will ultimately help you build wealth. Take a look at these examples of how marriage can make you richer.

1. There's a larger standard tax deduction

Under the 2018 tax law, every married couple filing jointly is eligible for a standard deduction of $24,000. That's nearly double from the previous law and exactly twice the standard deduction for single people. This standard deduction is more important than ever, as the new tax law does not allow for as much itemizing of deductions. (See also: 12 Things You Should Know About the New Tax Law)

2. You may save on taxes if filing jointly

Much has been said about the so-called "marriage penalty" in which couples could face a higher tax rate if they file jointly. But in truth, this was not an issue for most people, and the new tax law makes it even less likely that married couples will be penalized.

In fact, in most cases under the 2018 tax law, there won't be much difference between your taxes if you file separately or jointly. But it could be very advantageous for couples to file jointly if one spouse makes considerably more than the other.

To illustrate this, let's say you earn $37,000 in taxable income. Under the 2018 tax law, you'd be in the 12 percent tax bracket and pay $4,440 in tax if filing separately. Now let's say your spouse earns $190,000 per year and pays $60,080, based on the 32 percent tax bracket, also filing separately. If you file jointly instead, you'd report a combined income of $227,000 and would be in the 24 percent tax bracket. You would pay $54,480 in tax, a savings of nearly $10,000.

3. You have more buying power

When you get married, you are pooling financial resources. If both of you have assets and income, then you have greater ability to make purchases. It means you may be more likely to afford a down payment on a home, and have more ability to handle the monthly mortgage. It means you may become more attractive to lenders, though it is worth noting that you will still each have separate credit scores.

4. You can contribute to an IRA even if you don't work

If you want to contribute to an individual retirement account (IRA), you must have earned income. But there are exceptions, most notably in the form of a spousal IRA. With a spousal IRA, each spouse can have their own IRA, as long as one of the spouses has earned income. For most people, the limit of contributions on each account is $5,500 annually, so the total contributions allowed for married couples doubles to $11,000. The only catch to a spousal IRA is that couples must file their taxes jointly. (See also: 4 Ways Couples Are Shortchanging Their Retirement Savings)

5. You can receive Social Security spousal benefits

When you file for Social Security benefits, you can file for your own benefits or under your spouse's. Even if you did not earn any income during your life, you can receive benefits through your spouse. Usually, spousal benefits are up to half your spouse's normal Social Security benefit. You'll also be able to receive spousal benefits even after your spouse passes on.

6. You may spend less on health care

There is considerable evidence that being married can make you healthier. Married couples look out for one another. They keep each other on track regarding diet and exercise, and a spouse is often the first person to notice when you appear unwell.

The Harvard Health blog reported in 2016 that married people tend to live longer, are less likely to be depressed, and have fewer strokes and heart attacks. The report also cites studies showing that married people have better immune systems. This potentially means that your health care expenses could be less than if you remained single.

7. You can get health insurance through your spouse

If one spouse has access to health insurance through his or her employer, they can add a spouse to their plan. This is very helpful when one spouse is not employed or is not offered health insurance through their job. In most cases, family plans offer savings over plans for individuals.

8. Auto insurance is cheaper

Generally speaking, auto insurance companies will charge less to married couples than single people. That's because they tend to see marriage as something a more mature person does. Of course, it helps if both drivers have good driving records; if your spouse has a worse driving record than you, you may not see any savings.

An analysis from Carinsurance.com revealed that married couples can typically see savings of 10 to 15 percent in most states. It's worth noting that insurance companies will offer discounts for multiple cars, as well.

9. You can inherit assets from your spouse without a will

To be clear, no one is suggesting you should celebrate when your spouse passes away. But it's worth noting that when you are married, you are usually entitled to inherit their assets, even if you don't have a formal will drawn up. Note: Crafting a will is still a very good idea. (See also: Here's What Happens If You Don't Leave a Will)

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This article is from Tim Lemke of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

What You Need to Know About Divorce and Credit

Dan Rafter — Wed, 07 Mar 2018 09:00:09 +0000

Breaking up a marriage isn't cheap. According to Bankrate, the average divorce costs $15,000, but a contentious divorce can run up to $100,000. Beyond the legal fees, former spouses also frequently must face new financial strains after ending a relationship. One spouse, for instance, might now have to rent an apartment or pay a new mortgage while also paying big dollars in child support or alimony.

Divorce can be tough on your credit score, too. Just because you're divorcing doesn't mean that your former spouse can't still hurt your credit. If your ex doesn't pay a credit card bill on time, your credit score could tumble — by as much as 100 points — if that particular card is still in both of your names.

Fortunately, it is possible to rebuild your credit score after a divorce causes a blow. Doing so requires the same basic financial habits that helped you build a solid score in the first place.

Divorce and your credit

When you divorce, you'll likely work with an attorney to divide the assets and debts that you and your spouse shared. This can be a complicated process, even for a professional. In the best case scenario, you and your ex will reach an agreement about who will pay which debts. If that doesn't work, the court may decide this for you.

Once your divorce is finalized, the court will provide you with a divorce decree. This document is filled with information, including a list of who will pay what debts now that your marriage is over. Here's the problem, though: A divorce decree won't protect you should your ex not make payments on accounts that you and your former spouse jointly owned.

Say you and your ex took out a credit card account together. Your divorce decree might state that your ex is responsible for paying down this debt. But if your ex stops paying on the card, and the card remains in your name, too, your credit score will take a hit. That's because your creditors still view the debt on this account as the responsibility of both your former spouse and you, no matter what your divorce decree says. Creditors don't "care" what your divorce decree says. They will only look at what's in your credit agreement.

Missed payments on mortgage loans, auto loans, and other joint accounts can also wreck your credit score. (See also: Spouses and Debt: Who's Really on the Hook for Those Bills?)

Get rid of joint accounts

One of the best ways to repair any damage to your credit score following a divorce is to eliminate any joint accounts you shared with your spouse. They should now be in your name, or your spouse's name, only. That way, if your former spouse misses a payment, it won't hurt your credit score.

Doing this can be tricky. If you and your ex have a joint credit card account, your best bet is to pay down that account off as quickly as possible and close it. Closing a credit card account can inflict a minor blow to your credit score, but in the case of a divorce, closing a joint account is usually worth the hit.

If you and your former spouse share an auto loan, you might be able to refinance into a new loan that is solely under the name of you or your spouse. The same holds true for a mortgage.

Refinancing, though, isn't always possible. If the new loan is to be under your former spouse's name only, your lender can only count that person's income when refinancing. If your ex's income isn't high enough to qualify for a new loan, a refinance might be rejected.

In this case, you might have to sell the car or home in both your names. You can use the funds from these sales to pay off any other joint loans, and eliminate the possibility that a missed payment by your ex will slow your efforts to rebuild your credit score. (See also: How to Protect Yourself Financially During a Divorce or Separation)

Rebuilding after the damage

There are no quick fixes for a credit score that has taken a dive. The fixes that are available take time and discipline.

First, once your divorce is final, make sure to pay all your monthly bills on time. If you're a few days late on a credit card payment, don't panic. Payments aren't counted as officially late and reported to the national credit bureaus until they are 30 days past due. If you've missed your payment by a week, send it in before you hit that 30-day mark.

Secondly, immediately start paying down as much of your credit card debt as you can. The lower the debt on your credit cards, the more your credit score will rise.

Be careful, too, how you manage your credit cards moving forward. Never charge more than you can afford to pay off in full every month. And once cards are paid off, keep the accounts open, even if you don't plan on using the card. Keeping your credit utilization ratio low (the amount of credit you are using out of your total available balance) will also be a huge help to you. Your credit score will be higher if you are using less of your available credit — say, under 30 percent — and you can achieve this sooner by leaving your paid-off credit accounts open.

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This article is from Dan Rafter of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

How to Build Financial Stability After Divorce

Toni Husbands — Tue, 20 Feb 2018 09:30:09 +0000

Financial instability is a reality for nearly three-quarters of this country's 25 million divorcees. A study by TD Ameritrade surveyed 2,000 participants to examine how they're coping financially after a divorce or death of a spouse. As it turns out, people facing the end of a marriage are struggling — 75 percent of divorced Americans feel less than secure financially, and half are worried about running out of money in retirement.

The average cost of a contested divorce — which can range from $15,000 to $30,000 — also throws many divorcees' finances out of whack. And it doesn't end there. Additional costs such as separate household expenses, counseling for children, and taxes or fees to sell marital assets can quickly add to the financial burden. (See also: How to Protect Yourself Financially During a Divorce or Separation)

Healing after a divorce is no small feat, but digging yourself out financially is possible. You just need a strategic plan.

Assess your assets

There is no doubt that your standard of living will change after a divorce. It's important to realistically acknowledge what you can handle financially. It may be necessary to sell a family home and downsize to maintain a workable budget. While challenging, especially if there is an emotional attachment to the home, life after divorce presents a new reality that must be addressed head-on. (See also: 5 Money Moves to Make the Moment You Decide to Get Divorced)

Seek professional advice

This is an essential step for anyone facing an unexpected change in their financial situation. Objective, third-party advice can help you avoid making knee-jerk or emotional decisions that have long-term negative consequences. A financial professional who specializes in assisting divorcees can help you deal with typical questions and decisions that people in your situation face.

Adjust your budget

A divorce will likely decrease the overall income you've been accustomed to enjoying. Once you've established a plan for the essential items like housing, it will be time to take a closer look at the luxuries you enjoyed as a married person.

This also relates to expenses for your children. Often, parents try to maintain the same standard of living for their kids to minimize the impact of a divorce. Moving to a less expensive house, downgrading a luxury car, or making cutbacks to family travel plans can help you recover financially.

Evaluate career options

Depending on your age and/or situation at the time of the divorce, you may have been out of work or planning on retiring soon. In this case, you may need to adjust your career aspirations. Re-entering the job market, investing in additional education or training, or postponing retirement are all reasonable considerations to ensure long-term financial stability after a divorce.

Automate your savings

There are many things to handle during a divorce, and saving money may feel like a bottom-tier priority. But that couldn't be further from the truth. You need savings now more than ever. The TD Ameritrade study found that almost half of divorced couples are not saving or investing anything. That compares to 32 percent of their married peers. If you have a lot on your plate, it's understandable; but give yourself one less thing to worry about by automating your savings. Having money automatically withdrawn from your paycheck and put into a savings account or emergency fund can give you peace of mind without having to think about it. (See also: 5 Ways to Automate Your Finances)

Divorce is tough. It's important to give yourself time to grieve your previous lifestyle and adjust to your new normal. Making these moves can be a smart step to help you springboard into the rest of your life without worrying about money.

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This article is from Toni Husbands of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

3 Reasons Taking a Loan For Your Wedding Is a Bad Idea

Denise Hill — Wed, 14 Feb 2018 09:01:05 +0000

Imagine standing at the altar on your wedding day. Staring deep into your beloved's eyes, suddenly, you are struck by the thought that this one "priceless" moment is costing you over $30,000. And that doesn't include the five-day, four-night honeymoon in Cancun. What have you done?

According to The Knot, the national average for the cost of a wedding in 2016 was a whopping $35,329. And since most couples don't have that kind of cash upfront, many turn to loans to finance all or some portion of it.

Technically speaking, there's no such thing as a "wedding loan." A wedding loan is just an unsecured personal loan where the interest rate is based on the creditworthiness of one or both potential spouses. But kicking your marriage off with debt is a recipe for unnecessary stress and hardship. It can set you back financially before you even gain any momentum in what should be a new, exciting chapter of life.

If you are contemplating using a wedding loan to help you pay for your big day, here are three key things you should consider.

1. You squander your money's opportunity cost

Every dollar comes with an opportunity cost — meaning there are infinite ways that one dollar can be spent. Once you spend the dollar, you lose all of the other potential things you could have purchased with it.

Taking out a loan for a wedding is financial double jeopardy. Not only do you lose the opportunity cost for each dollar you've spent, but you also limit what you could have strategically used your credit for — such as purchasing a home or starting a business.

There are so many ways to spend money, and shelling out copious amounts of cash to pay for a one-day event is a bad investment. Starting your life together with a huge amount of unnecessary debt adds more stress to a naturally stressful endeavor. Marriage is tough. In lieu of investing in a single day that won't appreciate in value, take that money and invest in your life with your partner.

2. You drastically increase the cost of your wedding

We've already established that having an expensive wedding is a bad investment, but taking out a loan to pay for a wedding is asinine. Let's say you take out a $20,000 personal loan for your wedding at an annual percentage rate (APR) of 10 percent. And because you and your fiancé both have student loans, car payments, several thousand dollars in credit card debt, and are looking to purchase your first home, you opt for a 10-year repayment period.

Your minimum monthly payment is going to be $264.30 per month for 10 years. During that time, you will pay over $11,000 in interest. Your $20,000 wedding just skyrocketed to $32,000. Think about that for a second. Ten years of your life and $32,000 spent paying for a five-hour event. That money could have been a down payment for a home.

What's more, according to the U.S. Census Bureau, first marriages that end in divorce do so within an average of eight years. That means if happily-ever-after comes to an end before your loan is paid off, you'll be paying for your wedding and your divorce simultaneously. (See also: How to Save Big on Everything for Your Wedding)

3. Spending big leads to more big spending

Spending big on an extravagant wedding establishes spending expectations. This big spending attitude can quickly seep into all financial decisions and an attitude of entitlement can emerge — because you deserve "the best," which is usually defined by people with extravagant tastes. Now the honeymoon has to be lavish with no expense spared. Your home has to be opulent and in the fanciest neighborhood. Your kids have to wear the trendiest clothes, attend the most prestigious private schools, and belong to all of the "it" clubs. The cycle can consume your marriage.

If you and your spouse-to-be can find a way to be creative and have a wedding that is meaningful, intimate, and budget-friendly, you will establish a better foundation. You will be setting a tone of living within your means and valuing quality over size and quantity.

The essence of marriage is appreciating the little things and making the daily grind adventurous. When you pressure yourself and your spouse to continuously "go big," you add a mountain of undue stress — both emotionally and financially — on your marriage. (See also: People Are Still Spending Too Much on Their Weddings)

A $40 wedding story

I recently celebrated my 22nd wedding anniversary. As I look back and recall my wedding, a smile slowly creeps across my face. We spent $40 on the ceremony and had our reception at Applebee's. Our best friends were there and we had the time of our lives.

Over these past 22 years, I've never looked back and wished we had done things differently. In fact, we have renewed our vows twice since then (we do it every 10 years) and each time it's been a quiet ceremony in our pastor's office. The only people who attend are the pastor and my husband and me. It's intimate, private, and special.

I am not saying you should forgo a large wedding. You have found and are marrying the love of your life. That level of commitment should be honored. But before you pull out all the stops and plan the wedding of the century, pause and assess how you are spending that money. Do you really need to spend $2,000 on flowers? If something isn't important to you and your fiance, don't borrow money to pay for it.

Marriage is a marathon, not a 100-yard dash. Try shifting your focus from having the perfect wedding day to building your life together. Chose to invest in you.

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This article is from Denise Hill of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

4 Money Fights Married Couples Have (And How to Avoid Them)

Emily Guy Birken — Tue, 13 Feb 2018 09:30:08 +0000

When a couple first gets married, while the newlywed glow is still bright enough for strangers to see, it can seem as if nothing can ever get in the way of true love.

But if you fast forward a few years, many couples will find that money has a seriously unpleasant effect on that love. Whether you are shouting at each other over a credit card bill, or living in chilly silence because of one spouse's financial decision, you may wonder why your love for each other is not enough to smooth over the jagged edges of your money disagreements. (See also: 8 Steps to a Blissful Matri-Money)

According to a 2014 poll by Money Magazine, money is the most common reason married couples fight, ahead of household chores, togetherness, sex, snoring, and what's for dinner. These financial fights often seem to follow similar patterns, no matter who the spouses are, how much they make, or where they live.

That means it's possible for married couples to anticipate common money fights, and avoid them altogether. Here's what you need to know about four of the most frequent money arguments, and how you and your sweetheart can avoid them.

1. Disagreements over spending

It's a tale as old as time. One of you is a spender, and the other one is a natural born saver. When the spender comes home with brand-new gadgets and gizmos galore, the saver is likely to blow a gasket. What ensues is an argument about who is a buzzkill and who is irresponsible.

How to avoid this argument

Many individuals make the mistake of avoiding this argument by simply not telling their spouses about their spending. Money Magazine's poll found that a full 22 percent of spouses have spent money that their partner doesn't know about. But while keeping your spending secret might keep the peace for the moment, such secrecy causes much bigger problems down the road.

Instead, couples should commit to having separate fun money funds. This is a great way for each of you to make purchases the other might see as unnecessary, without it becoming an issue.

As long as you and your partner can agree on a budget amount for important-to-me purchases, this strategy will allow you to buy stuff that matters to you without having to fight about it with your spouse. (See also: 5 Money Conversations Every Couple Should Have)

2. Power struggles over money

In many relationships, one partner will believe he or she has the last say on financial decisions. Often, this comes about because of who is the higher earner, although these types of power struggles can also be rooted in beliefs about who is better with money — either because of gender stereotypes or the couple's specific relationship history.

Unfortunately, these sorts of power struggles can really undermine the love between a married couple. When one partner wants to be the ultimate financial authority in the relationship, his or her actions can negate the equality between spouses, which can foster resentment and anger.

How to avoid this argument

It's important for spouses to recognize they are both on the same team when it comes to their money. To do that, they need to start viewing all income as "our money" and all decisions as "our decisions."

If the power struggle stems from the fact that one spouse brings in more money, one way to view things more equally is to sit down together and make a list of what you each do for the overall health of the relationship.

This is a peacekeeping tactic that many marriage counselors advise for dealing with housework squabbles, but it works just as well for dealing with money imbalances. Once the higher-earner sees that the other partner does all the grocery shopping or laundry or airport drop-offs, it can help to put the high income in perspective. The high-earner would be keeping less of their income if each of those nonfinancial contributions by the low-earner had to be contracted out.

If power struggles are rooted in a belief that one person is better with money, consider what would happen if either one of you died. If only one spouse takes care of the marital coffers, the other one will be vulnerable in the event of widowhood. Thinking through these kinds of worst-case scenarios can help spouses recognize the importance of each partner having financial responsibility and buy-in on financial decisions. (See also: The 7 Worst Money Mistakes Married People Make)

3. Reactions to risk

Opposites often attract, particularly when it comes to risk tolerance. Often, the risk-averse, better-safe-than-sorry type and the risk-loving adrenaline junkie fall for each other, because Mr. Safety grounds Ms. Risky while she helps him expand his horizons. Unfortunately, these love matches can cause friction when it comes to financial decisions.

For instance, one spouse may want to invest their savings into the business she is trying to get off the ground, while her husband would prefer to keep that money safe in the bank in case the business fails to launch. Such a couple might find themselves arguing over whether or not he believes in her, and whether or not she cares about his financial anxiety.

Even couples who are both on the same page when it comes to the relative importance of a steady paycheck can strongly disagree about how much risk they are willing to accept in their investments. If he wants to chase returns with every no-fail promise of a tin mine in Bolivia, while she is happier to leave it all in CDs, savings accounts, and maybe a bond or two, there will be some serious fights about the future of their money.

How to avoid this argument

The best way to calm the fears of a risk-averse spouse is to make sure there is an upper limit to the amount of money that will be "risked." For instance, an entrepreneurial spouse might promise to invest no more than 20 to 25 percent of their savings into the new business, which will give some room for growth while also providing the cushion that the other spouse needs to keep from breathing into a paper bag.

Similarly, having a plan of action for investments can help a couple navigate their differing risk tolerances. Such a plan could design asset allocation that will mitigate risk and encourage growth — and potentially leave a small percentage available for the more speculative investments that will please the risk-taker in the couple. (See also: 5 Painless Ways to Manage Money With Your Partner)

4. Disagreements over helping family

One of the toughest arguments between couples happens when a family member asks for money. Whether it's a one-time request because of a truly difficult situation, or it's a family member who regularly wants to borrow money from you, this can cause major stress for a couple.

Often, these types of fights go further than just disagreements about the money — they can become arguments about each other's families and each spouse's expectations of dealing with them. Many a spouse has spent a few nights on the couch because of a loan to a family member.

How to avoid this argument

The best way to avoid this kind of disagreement is to talk about it ahead of time. After you have been asked for money or have already given money to a family member is a bad time to hash out how you each feel about family loans. In particular, the issues you need to agree on are these:

Can you consider any money you give to family in need as a gift rather than a loan?
If it has to be a loan, can you agree to have a legal loan document written up to make sure you are reimbursed?
What is the maximum amount of money you are willing to give or loan to family in an emergency?
Is there a maximum number of times you are willing to help the same family member?
Are there nonfinancial ways you can offer to help if giving or loaning money is not in the cards?

Getting on the same page on these issues before a relative asks for money can help ensure that your bond with your spouse stays strong, no matter how often your shiftless cousin Lenny asks for a couple hundred dollars. (See also: The 16 Cardinal Rules of Loaning Money to Friends and Family)

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This article is from Emily Guy Birken of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread: