finance

10 Countries Where Banks Pay Crazy Interest Rates

Tim Lemke — Thu, 15 Oct 2015 13:00:23 +0000

Everyone in America has been waiting to find out when the Federal Reserve will raise interest rates, which have been down at historic lows for some time.

Think interest rates in the U.S. are shockingly low? Well, there are other nations with rates that are even more off the wall. Some have rates below zero. Some have rates above 25%. (Imagine that — 25% returns just for parking your cash in the bank!)

Here's a look at the countries with the wackiest interest rates — and if you can figure out a way to get a 25% interest rate on your bank deposits, please let me know!

The High End

Savers in these countries ought to be happy — or should they?

1. Belarus

Interest rates in this former Soviet republic have always been some of the highest in Europe, but rates really shot up last year when the government jacked them up to fend off a devaluing of the nation's ruble. The benchmark rate in Belarus is a whopping 25%.

2. Ghana

In an effort to fend off inflation, this West African nation rose its benchmark interest rate to just under 25%, one of the highest rates on the continent. Ghana's currency, the cedi, has been plunging in value as the nation has struggled with debt, according to Bloomberg News.

3. Malawi

On the other side of Africa, Malawi also reports a benchmark interest rate of about 25%. In fact, that's been the average rate since 2001, when rates hit as high as 75%. The mortgage finance rate from the National Bank of Malawi is 32%.

4. Argentina

This country has the highest rates in South America, with a benchmark of just under 24%. Rates have been creeping up for years as the country has faced major economic problems, but they are still much lower than in 2002, when rates topped 90%.

5. Ukraine

Interest rates in Ukraine are so wacky that they now stand at 22% even after two rate cuts. Ukraine has battled a devaluing of its currency, the hyrvnia, that once forced interest rates to above 30%, then the highest in the world.

The Low End

In some cases, savers pay banks to hang onto their money.

6. Switzerland

Rates in Switzerland are so low that it may actually cost you money to "save" there. With a rate of -0.75%, the Swiss must pay to lend. This unusual move was made to cause some inflation (in an overly low inflation environment) and prevent the Swiss franc from becoming too overvalued.

7. Denmark

The Danish central bank started off 2015 by slashing interest rates several times, to the point where they are now also at -0.75%. Many Danish citizens now have to pay interest on any bank deposits. This move to crazy-low rates comes as a response to a sagging European economy.

8. Sweden

While not quite as low as Switzerland and Denmark, Sweden is another European nation with a benchmark rate below zero. The Swedes made the move to lower rates to -0.35% in July, citing deflation concerns and the impact of problems with the Greek economy. With borrowing so cheap, now the Swedes have to battle fears of a possible housing bubble.

9. Japan

Japan's central bank has been trying all kinds of things to get the country's economy moving and fend off deflation, and interest rates now stand at... nothing. That's right, interest rates are zero in Japan, and have been near or below 1% for about 20 years.

10. Bulgaria

It's better than zero, but not by much. The benchmark rate from the Bulgarian National Bank is a mere 0.01%. The head of the bank resigned in June following the bankruptcy of one of the nation's largest commercial banks.

What's worse, high interest rates or rates at zero or below?

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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:

5 Signs You Probably Need an Accountant

Dan Rafter — Tue, 13 Oct 2015 13:00:32 +0000

Do you dread filing your income taxes each year? Does preparing your taxes take weeks of your time? And once you've sent your papers to the IRS, do you have the sneaking suspicion that you might not have taken all the deductions to which you are entitled?

You might need to hire an accountant.

"Hiring an accountant depends on whether your knowledge, time, and money are best spent on bookkeeping, loan application, and tax preparation, or whether you have higher priorities," says Valrie Chambers, associate professor of taxation and accounting at Stetson University in Celebration, Florida. "A business owner who excels at sales should probably use her time increasing sales rather than learning and doing accounting. That strategy is just more profitable for the business."

Here are five signs that you need to hire an accountant.

1. You Owe the Government a Lot of Money Each Year

Taxes become complicated when you work for yourself or run your own business. Depending upon how much you earn, you'll have to pay estimated quarterly tax payments four times every calendar year — January 15, April 15, June 15, and September 15. These payments are supposed to guarantee that you won't owe the federal and state governments thousands of dollars each year in taxes.

But if you find that when you file your income taxes each April 15 you do owe the state and federal government $3,000, $4,000, $6,000, or more, you're doing something wrong. An accountant can help you determine the quarterly tax payments you should be making to ensure that you're not hit with a huge tax bill every April 15.

2. You're Worried That You're Missing Big Deductions

Yes, hiring an accountant takes money. But doing so can also save you money. An accountant can prepare your annual income tax returns to make sure that you're not missing out on any important deductions for your household or your business. Missed deductions can cost you thousands of dollars each year in taxes.

3. It Takes You Days to Complete Your Taxes

Filing your income taxes isn't necessarily easy. But it shouldn't be a draining chore, either. If your life has gotten complicated — maybe you've started your own consulting business on the side, perhaps you've adopted and are struggling to understand how the adoption tax credit works, maybe you're not sure how to deduct the bills for a serious medical procedure — you can bet that your income taxes have, too.

If it is taking you a full week to complete your taxes, it might be time to think about hiring an accountant. You just have to determine how important your time is: Would you rather spend your time earning more money or poring over your tax forms?

4. You Own Rental Real Estate

Renting an apartment or two is a great way to earn passive income. But doing so can also complicate your finances. That's why it makes sense to hire an accountant to make sure that you don't miss any important tax deductions related to rental income, and that you file all the paperwork necessary when working as a landlord.

"There comes a point when personal tax software is not sophisticated enough to take into account the complexities of real estate investments," says David Reiss, professor of law and research director for the Center for Urban Business Entrepreneurship at Brooklyn Law School in New York City. "If a taxpayer has multiple properties that have both a personal and investment component, tax software may not be able to accept all of the relevant inputs and generate the correct output."

5. You've Never Been Able to Balance Your Checkbook

If you're struggled for years to balance your own checkbook — if overdraft charges from your bank aren't a rare enough occurrence — it might be time to invest in an accountant, especially if you've started your own business. It's bad enough to struggle with your personal finances, and you don't want to operate a business that doesn't have its books balanced.

Chambers recommends that you meet with several accountants — she recommends that you only work with Certified Public Accountants (CPAs) — before hiring one. Ask accountants how long they've been in business, whether they've worked with clients at your income level, how much they charge, and what services they'll provide. Ask, too, for referrals from accountants' current clients.

"Meet with the CPA to see if you are comfortable sharing your information with this firm," Chambers says. "CPAs should be forthcoming about their fees. When they are hired, they normally spell out what they will do for those fees in an engagement letter. Finding an accountant who is right for you is part research, part comfort level."

When did you realize that you needed an accountant?

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:

Avoid These 5 Pitfalls When Moving in Together

Amanda Meadows — Mon, 12 Oct 2015 17:00:44 +0000

Moving in with the person you love is a huge step! In fact, it's so huge that we get too swept up in the excitement to really look at the gritty details. These are five things you should never do when moving in together.

1. Don't Avoid Organizing Your Stuff Before the Move

This is one of the most useful things you can do to avoid fights about belongings down the line. You must be willing to self-edit (and to help your partner self-edit) before schlepping all your stuff into a new place where it may not all fit. Clean house and decide which items of yours are most important to keep, so you can make room for the new items you'll acquire as a cohabiting couple.

Remember these key categories: Keep, Sell, Donate, and Toss. Keep items such as any clothing you have actually worn in the past year, or big ticket furniture items you can't spare. Sell items of some value that are either redundant or no longer needed. Donate items like new clothing you haven't worn in the last year, shoes, books, and anything not worth taking time to sell on Craigslist or a yard sale. Toss pretty much everything else! Let your partner have a veto option.

2. Don't Reject Your Significant Other's Red Flags

This can range from extremely small to extremely big issues. To some, a loud snore could potentially be a deal breaker; but harboring an addiction to pills could go undetected for years before finally moving in with someone. It comes down to how well you know each other. What are your partner's triggers and soft spots, and will you be able to work around them?

For some, a series of talks is all you need to answer questions like, "How will our work schedules mesh?" Or, "Can we share a bedroom or do we need separate spaces as well?" Or, "Who will be in charge of the bills?"

There are also elephants in the room that you must address. For example: If your significant other has a child, you will need to be a part of the child's life. Is that something you're ready to do?

Another example: If your partner has a disability, how will it affect your responsibilities to them and the home?

Maybe you're the one with a lot red flags. Don't react defensively – deeply consider your partner's needs and decide if they are workable for you. You can't just hope it will all fall into place.

3. Don't Assume Finances Will Work Themselves Out

Finances are the largest source of stress and arguments in every household. Yours will not be an exception. While you're not legally obligated to each other's money, you do need to share some pertinent information with your significant other before you set up your household system. Are you in massive debt? Are you terrible at managing bills?

If you're the organized one who has their bills set up on auto-pay, you're probably going to be the one to shepherd the other into a better system. Try setting up an automatic monthly transfer from your partner's bank account to yours to ensure you get their share of the rent and bills on time. Don't think of this as babysitting; think of this as an investment of your time and expertise into avoiding future fights when the lights suddenly get shut-off!

4. Don't Let One Person Do All the Housework

This is a tough one that inevitably happens to most new couples. Whoever gets sick of staring at the unending tower of dirty dishes first is ultimately the one who cleans them. That's not fair, but it's really easy to get stuck into imbalanced patterns like this when living together.

Have a discussion, before moving in, about housekeeping equality. Who takes out the trash? Who does the dishes? (Hint: if you don't own a dishwasher, I suggest it's whoever didn't cook the meal.) Who fixes the bookcase when it starts to teeter? These are tasks that have nothing to do with gender or who earns more money. It's usually whoever can do it with the least amount of goading. If neither of you wants to clean, agree to split the cost of a monthly cleaning service and never fight about dusting again.

5. Don't Pretend You're Married

This is a hard one. Many people see shacking up as a stepping stone to marriage, and for many, it is. This is a great time to test each other's willingness to compromise, generosity with belongings, and emotional, sexual, and financial compatibility on an everyday level. This is all invaluable.

But it doesn't mean that you're married. Avoid forming unhealthy, codependent habits with him or her. Your stuff doesn't belong to your partner, nor theirs to you. You have a choice in every decision that doesn't necessarily have to include your partner. You can hang in there and try to make a relationship work, but you can always leave if it isn't going well. That's the whole point, isn't it?

Did you fall into any of these traps when you moved in with a significant other?

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

5 Life Mistakes You Need to Stop Making by 30

Amanda Meadows — Thu, 13 Aug 2015 11:00:30 +0000

Thinking about the big 30th birthday benchmark? I certainly am! Some habits we get away with in our 20s are not so flattering later in life. Here are the five things you need to stop doing by age 30.

1. Maxing Out Credit Cards

When you got that first credit card fresh out of high school, you thought, whoa, $500 is so much money! A few weeks later, you learned how few dollars that really was, and by then you were maxed out. It's a lesson that we would ideally learn once, pay it down, and move on, but many of us don't. Start learning how to manage your debt and resolve to keep a balance of no more than 20%–30% of your credit limit.

2. Avoiding Doctors

When you're 23, you still boast a high metabolism and strong immune system, so you can't possibly get sick, right? This is a lie every young person believes throughout their 20s to get out of paying for health care. Whether you get into a car accident or you need to treat certain communicable diseases, you need a doctor. Thanks to the Affordable Care Act and the limited benefits some employers offer, it's easier than ever to find a low-cost plan that will cover you in case of an emergency. If you're a lucky person who's still under his/her parents' plan, use it before you lose it! Here's how to get the care you need without spending too much.

3. Keeping All Funds in One Account

When you first start out as an adult, banking is something you do when you absolutely need to: paying bills, making transfers, informing the bank you lost your debit card at a bar again. Direct deposit dumps your check into the checking account, and so it stays there — until you drain it dry three days before payday. Start thinking about your other banking options. Tweak that direct deposit to send 10% of your checks to you savings account, and don't touch it. Afraid you will touch it anyway? Look into CDs (certificates of deposit) and mutual funds as a way to make a fraction of your earned income grow over time. This can work as your emergency fund or a nest egg for later.

4. Getting Sucked Into Your Phone

This is hard for Millennials. On one hand, we want to use our phones a lot because all our stuff is there! On the other hand, it causes a big social rift between us and elder generations — including the Gen Xers and Boomers, who are still mostly in charge of hiring us for jobs. This means you must have an "offline mode" switch: Know when you're in the clear to play Neko Atsume on your iPhone, and know when it's time to silence the phone and keep it stowed away (not on the table face-up). It's not only to appease our parents; it's also to help us be more human by staying present to others in real time and charming to be around.

5. Putting Off Your Education

Around 40% of college enrollees (both community and university) end up dropping out before earning a degree, and that's only of those who actually apply and enroll to a college — most people in the U.S. do not have a college degree. Think about that if you are struggling to scrape together enough to live on your own comfortably — the bottom rung is too crowded. College is still indisputably the key to success, especially for these majors. If you're still putting off that degree to jumpstart your career, now is the time. Make your 30s an age of well-earned prosperity.

What habits will you finally break when you turn 30?

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

5 Best Websites to Help You Retire Early

Julie Rains — Fri, 26 Jun 2015 11:00:10 +0000

You've likely heard dire warnings that many Americans may never be able to retire at their current level of meager savings. But you can beat these odds and even retire early if you structure your life and finances properly. And the sound (though sometimes quirky) suggestions of online early retirement sensations like Mr. Money Mustache can help you get there.

If you're interested in achieving financial freedom and independent wealth at an early age, check out his website and these four other early retirement blog favorites.

1. Mr. Money Mustache

An aggressive saver and index-fund investor, Pete, aka Mr. Money Mustache, and his wife retired in 2005 while in their 30s. Frustrated with questions about his money-saving techniques, he decided to share his knowledge through his website.

Mr. Money Mustache dissects the rationale and habits of early retirees, fights against hyper-consumption, and advances the early retirement lifestyle. He doesn't mind being viewed as different or even controversial as evidenced by articles such as "What Does Your Work Truck Say About You?," "Chasing Electrical Demons to Cut Your Power Bill by 80%," and "Great News: You're Allowed to Have Only One Kid!"

As a (tongue-in-cheek) cult leader, he has assembled a significant number of members who bond to his fanaticism for achieving "Financial Freedom Through Badassity." Learn from fellow "mustachians" by posing questions and exploring collective wisdom in his forum, one of the most valuable sections of this website.

2. FinancialMentor

Former hedge fund investment manager turned financial coach Todd R. Tresidder offers a wealth of resources for aspiring early retirees at FinancialMentor. Todd lived simply and invested smartly in his youth while working in the financial services industry, achieving millionaire status and retiring at age 35.

Today, Todd enjoys financial freedom while mentoring others along a path of accumulating wealth, developing multiple streams of income, and experiencing the personal transformation that happens as a result of financial independence. His website contains free resources, which include retirement calculators, articles like "12 Tips to Build Wealth for Early Retirement," and podcasts with financial and retirement experts, such as Wade Pfau, PhD, CFA, and Professor of Retirement Income with the American College of Financial Services.

You can also discover paid resources through the site, such as Todd's 60 Minute Financial Solutions book series that includes How Much Do I Need to Retire?

Todd breaks down and simplifies complex financial topics, and, when appropriate, disavows conventional wisdom. Further, he provides you with actionable steps to achieve financial freedom focused largely on securities investing.

3. The Military Guide

Retired veteran and the author of The Military Guide to Financial Independence and Retirement, Doug Nordman offers finance-related insights for the unique needs of the military community at The Military Guide website. Doug opted for early retirement after 20 years of active service, passing up the opportunity for a bridge career involving transition to the civilian workforce.

In his blog, Doug confesses that he made lots of mistakes in his personal financial life. Nevertheless, diligent and consistent savings, along with a military pension, allowed him to retire early. Today, he spends time surfing in Hawaii, traveling, writing, and promoting his book (royalties benefit military charities).

His engaging and self-deprecating style allows you to learn from his experiences, as evidenced in "How to Get Kicked Out of Tricare" (military health care program). You can also gain knowledge to make informed decisions by considering pros and cons of various retirement-related paths through articles such as "Stay for 30 or Retire at 27?" which references years of service, not years of living.

4. Afford Anything

In the midst of a successful but unfulfilling career in journalism, Paula Pant decided to pursue personal and professional interests on her own terms. She became financially independent at age 30 by parlaying profits from a writing and marketing firm into $1 million worth of real estate investments, which generate passive income that sustains her lifestyle.

At the Afford Anything website, Paula writes about her business ventures and life adventures. She encourages readers to develop sources of passive income based on their strengths and interests. However, she focuses on her experiences in real estate. You can read about entering the vacation rental business as an AirBnB host, plus find guidance on buying and managing rental properties through articles such as determining if a house is a good investment.

At her website, affording anything (though not everything) is emphasized, not necessarily early retirement. However, those who are interested in retiring before 65 should find both inspiration and instruction to become financially free as early as possible.

5. Go Curry Cracker

Supersavers and married couple Winnie and Jeremy explore the world while educating readers on the financial and location independent lifestyle through their blog, Go Curry Cracker. They saved more than 70% of their income for 10 years while working in traditional jobs. During this time, they built an investment portfolio that generates income for their expenses.

At the website, you'll find tips on optimizing your tax situation (including techniques for harvesting capital gains in order to increase the cost basis of your holdings, positioning you for lower taxes in the future) and limiting your fixed expenses through techniques such as car-free living. Mainly, though, you'll get inspiration for aggressively and wisely managing your financial situation so you can enjoy your days in early retirement.

Retiring early may be within your reach. Visit these websites to learn how to live and spend intentionally, invest wisely, avoid wealth-robbing pitfalls, and enjoy life before and during retirement.

Which other early retirement online resources do you read and recommend?

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

3 Pearls of Financial Wisdom From Alan Greenspan

Damian Davila — Mon, 22 Jun 2015 13:01:11 +0000

Known as the Oracle, Alan Greenspan is one of the most widely respected Federal Chairmen of all time due to both his economic knowledge and political savvy.

A familiar face throughout two decades of U.S. history, Greenspan is the second-longest serving Federal Reserve Chairman (1987–2006), just four months behind the top spot. Throughout his long tenure in public service and his prolific career in economic consulting, he accumulated a thorough understanding of how markets work.

Here are the three best pearls of financial wisdom from Alan Greenspan.

1. Beware "Home Bias" in Investments

In his memoir The Age of Turbulence, Greenspan warns investors about their tendency to invest their savings in their home country, even though this could mean passing up more profitable foreign opportunities.

The problem with having a narrow geographical scope for your investment portfolio is that you may undervalue its actual risk. "When people are familiar with an investment environment, they perceive less risk than they do for objectively comparable investments in distant, less familiar environs," he points out in his book.

Diversification is key in order to spread out and minimize your investment risk. Just like you wouldn't put your entire nest egg in a single stock, you shouldn't limit your investments only to the U.S. economy. By including exposure to both domestic and foreign markets, you may be able to ride out bumps in the U.S. economy with price gains in foreign markets, and vice versa.

To keep transaction costs predictable and reduce special risks in international investing, such as currency exchange rates, political events, and different market operations, the SEC suggests you consider the following foreign investment options:

Mutual funds, such as global funds, international index funds, and regional/country funds;
Exchange-traded funds, which unlike an international index mutual fund, trade on a stock exchange;
American depositary receipts, which are certificates issued by U.S depositary banks providing ownership interest in foreign corporations;
U.S. traded foreign stocks, such as Canadian (e.g. NYSE:BMO) or Chinese stocks (e.g. NASDAQ:BIDU).

Consult with your financial planner or retirement plan administrator to find out more details about your options in foreign investments and to determine whether or not those options make sense for your portfolio.

2. Keep "Irrational Exuberance" in Check

You can't talk about Alan Greenspan without touching on the topic of "irrational exuberance."

He coined this term during his keynote address "The Challenge of Central Banking in a Democratic Society" at the American Enterprise Institute's annual dinner in December 1996. Greenspan prepared a pretty dense speech and he wasn't sure what part of it would make the news. The day after his speech the media focused on this bit, "How do we know when irrational exuberance has unduly escalated asset values, which then become subject to unexpected and prolonged contractions?"

For the average investor, the main takeaway is that we have to leave emotions out of investing. When you can't support your investment decisions through cold hard numbers or market fundamentals, then you become a victim of an investment bubble of your own creation. Unsustainable investor enthusiasm often takes place during periods of economic boom. For example, Forbes has called 2015 the "age of unicorns" because there are more than 80 startups with $1 billion or higher market valuation.

When it comes to investing you have to do your due diligence, you can't just wing it or play it by ear.

Greenspan believes that the best way to keep irrational exuberance in check is to study the history of financial markets and learn from the experience of past generations. Improving your financial literacy is a common suggestion from past chairs of the Federal Reserve because "Bearnanke" also stands behind that recommendation. (See also: The 5 Best Pieces of Financial Wisdom From Ben Bernanke)

3. Hold Stocks Beyond Your "Sleeping Point"

Given that Warren Buffett is not only one of history's most successful investors but also one of his dearest friends, Greenspan pays close attention to the investing lessons from the Oracle of Omaha.

In The Age of Turbulence, Greenspan points out that Buffett's favorite holding period is forever. The main reason is that several studies have pointed out the historical average market return of 8.5%. Many investors miss out on that potential return because they sell their positions in times of recession for purely emotional reasons.

"The market pays a premium to those willing to endure the angst of watching their net worth fluctuate beyond what Wall Streeters call the 'sleeping point,'" writes Greenspan. There are many valid reasons to sell your stocks, such as rebalancing your portfolio back to its target asset allocations or materializing losses to offset big income gains for tax purposes.

However, selling down to the sleeping point — taking only the risk that still allows you to sleep at night — shouldn't be relied on to emotionally nix your stocks. Take a cue from both Greenspan and Buffet and remember that the well-documented higher rate of return of equities, even adjusted for risk, exceeds that of alternative investments, provided you're willing to buy and hold stocks for the very long run.

Investing can feel sometimes as the most unpredictable thing in the world. "Markets do very weird things because it reacts to how people behave, and sometimes people are a little screwy," warns Greenspan.

By having an understanding of the concepts of home bias, irrational exuberance, and sleeping point, you're better equipped to keep a methodical investment strategy.

What are other great pearls of financial wisdom from Alan Greenspan?

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

Best Money Tips: How to Be Invincible

Ashley Jacobs — Thu, 02 Oct 2014 19:00:06 +0000

Welcome to Wise Bread's Best Money Tips Roundup! Today we found some amazing articles on how to be invincible, cutting the cost of beauty products, and ways to attract money to you.

Best Money Tips: Financial Tips From Dad

Ashley Jacobs — Fri, 13 Jun 2014 17:00:19 +0000

Welcome to Wise Bread's Best Money Tips Roundup! Today we found some amazing articles on financial tips from dad, managing your money in retirement, and financial goals everyone should strive for.

Best Money Tips: Financial Lessons from "Godzilla"

Ashley Jacobs — Mon, 26 May 2014 09:00:23 +0000

Welcome to Wise Bread's Best Money Tips Roundup! Today we found some amazing articles on financial lessons from "Godzilla," avoiding getting ripped off by a vacation rental, and things to buy at Whole Foods.

Say No! 7 Reasons Why You Shouldn't Get Married if You're in Debt

Kentin Waits — Thu, 12 Dec 2013 10:31:17 +0000

Few things in life bring as much joy as an impending engagement and marriage. The anticipation, the planning, the celebration — the promise of marriage — bring out the very best in friends and family. But for young couples in debt, that promise can be soured by the realities. If marriage is part of your short-term plans, here are seven reasons to avoid tying the knot until you're both debt-free. (See also: How to Stay Married for 29 Years and Counting)

1. Debt Is Stressful

Though the realities of marriage are often clouded by the rosy blush of love, the logistics of partnership can often be a challenge, especially for younger couples. Sharing a space, building relationships with in-laws, and managing new demands on your schedule can be stressful at times. Why add to it by bringing a load of debt into the marriage too?

According to the results of a survey conducted by The American Institute of CPAs, money is the number one topic that couples fight about. Money conflicts outrank fights about kids, career, household chores — even sex. With eye-opening insights like this, getting off on the right foot financially is a big step in the right direction.

2. Weddings Are Expensive

The median price of a wedding in 2012 was $18,086. That means that 50% of couples in the U.S. spent more that $18,086 on their weddings and 50% spent less. Faced with those numbers, being debt-free in all other financial areas, can help couples save for their wedding and avoid tapping a line of credit just to say "I do." (See also: How to Save $5000 on Your Wedding)

3. Marriage Takes Money

Don't assume combining households will always be a money-saving move. After the florist is paid, a piece of the wedding cake is frozen, and the thank-you notes sent, your expenses as newlyweds are just beginning. You'll probably need a larger apartment or want to purchase a starter home, be tempted to buy a few key pieces of new furniture, become more social with other couples, or need another car for separate commutes. And it all takes money. Couples who are in the best position at the start of their marriage realize this beforehand, erase their debt, and are ready to invest in their future from day one. (See also: 9 Expensive Things New Homeowners Don’t Prepare For)

4. Babies Happen

In spite of our best intentions and most meticulous family planning efforts, sometimes babies just happen. And though these new additions to our world are wonderful surprises, they carry a host of new expenses and financial obligations. From diapers to formula and from childcare to clothes, those little bundles of joy cost a bundle, too. Couples who choose to marry only after they are debt-free are much more prepared to handle whatever the world throws (or the stork drops) their way. And as with any partnership, that kind of positive beginning can sometimes make all the difference in the world. (See also: How Much Does It Cost to Raise a Child?)

5. Debt Can Be a Sign of Deeper Issues

Not all debt is created equal. Some debts are the result of circumstances beyond our control; a sudden job loss, health problems not covered by insurance, and other emergencies can put us in the red in short order. Other debt is strategic and constructive; taking out a loan to invest in property or to get a specialized education to qualify for career advancement usually makes perfect sense.

But chronic debt can be an signal of deeper issues like compulsive behavior, lack of fundamental fiscal understanding, or misaligned goals. It's important to understand how you or your partner's debt originated, how you each feel about it, and what each of you intends to do about it. Without this basic information, it's impossible to know if your marriage will be a new beginning or the start of a lifetime of debt servitude and financial struggle. (See also: 5 Money Questions That Couples Should Ask)

6. Debt Is Shared

Any debt held before marriage is the responsibility of the individual who incurred it. But since most couples typically combine accounts and share expenses, old debt has a way of draining new budgets almost immediately. Over time, paying down our partner's debt can build resentment and replace marital bliss with marital stress.

7. Debt Is a Lasso

At the risk of sounding cynical, I have to include this important reality: Sometimes marriages don't work out. Every couple hopes to defy divorce rate statistics when they walk down the aisle, but often in spite of their best intentions and efforts, it's necessary to part ways. Though debt shouldn't prevent a divorce, it often does. Heavy financial burdens and debt can be a lasso that keeps couples tied together and stuck in unhealthy relationships for years. It sounds starkly pragmatic, but it's true: Being debt-free before marriage (and working to avoid high-interest consumer debt during marriage), can make transitions like legal separation and divorce much easier. (See also: How to Rebuild Your Financial House After a Divorce)

Granted, money might not seem like the most romantic topic, but it's an essential one for couples to discuss thoroughly. Paying off debt, getting on the same page financially, and establishing clear and common goals for the future can help set you and your significant other up for a lifetime of success. And when you think about it, isn't that pretty romantic after all?

Were you in debt when you married? What advice do you have for young couples trying to pay off debt before their big day?

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

7 Financial Lessons From Breaking Bad

Tim Lemke — Tue, 01 Oct 2013 10:00:04 +0000

The hit TV show "Breaking Bad" will leave a lasting legacy as one of the most intense and popular shows on television. Watching Walter White and associates descend deeper into meth madness week after week has been truly entertaining. (See also: Financial Lessons from "Sons of Anarchy")

But it's also been educational from a personal finance standpoint.

Suffice it to say, Walter White made a lot of questionable decisions. And while we're probably never going to make a foray into making crystal meth, many of his choices can offer helpful lessons in money management for the average, law-abiding citizen. From preparing for disaster to investing your money and how to deal with unexpected wealth, there is much to learn from the craziness of Breaking Bad. Here are seven lessons to take away from the madness. [Caution: Spoilers Coming]

1. Practice Good Estate Planning

Walter White began cooking crystal meth because he got an unexpected cancer diagnosis. He wanted to pay off his medical bills and make sure his family was taken care of.

There are obviously better ways to plan for a bad event.

Life insurance is something everyone with a family should have. Do you have enough coverage? Look into setting up an annuity or other vehicle that can result in consistent payments to your family if the worst should happen. (See also: How to Buy Affordable Life Insurance)

Another big piece of estate planning is your emergency fund. Do you have enough cash in the bank to get through a tough period? Many financial advisors suggest putting away at least six months of salary.

A Roth IRA is a great way to save for retirement due to its tax advantages, but it also comes in handy in an emergency because any deposits you make can be withdrawn without a penalty.

Take time to review your financial plan. Are you prepared to handle any bad news that comes your way?

2. Get Quality Health Insurance

Health insurance is a vital part of your financial plan, and it's important to review your policy to ensure you're properly covered.

Walter White lived in a pre-Obamacare world. That means his medical expenses may not have been capped. Under the new Affordable Care Act, his expenses would have been capped at $12,700 annually, even if he had the low-cost "Bronze Plan" purchased through one of the new health insurance exchanges. (He also would not have been turned down by insurers for any pre-existing conditions.) (See also: Understanding the ACA’s Health Insurance Exchange)

But even under Obamacare, it's still important to find coverage that won't leave you on the hook for thousands of dollars that you may not have budgeted for. If you get insurance through your employer, review it closely to ensure you're properly covered. If you do purchase coverage through a health insurance exchange, take a look at the Gold or Platinum plans, which have higher premiums but more comprehensive coverage. Being underinsured can still lead to financial hardship.

If you do come down with a medical condition, your employer may offer a health spending account, which allows you to deposit money tax free to help pay medical bills. Keep in mind, too, that unreimbursed medical expenses are often tax-deductible.

3. Talk About Money With Your Spouse

Walter thought he was best off hiding the truth from his wife, Skyler, but he'd have been better off being honest with her from the start.

According to the National Endowment for Financial Education, 31% of American adults who combined assets with a spouse or partner say they have tried to conceal the truth about their finances. Nearly 60% of these adults say they hid cash from their partner or spouse. But that same report also pointed out that in most cases, spouses end up finding out the truth, anyway.

Once Skyler knew about Walt's "business," she was — surprisingly — able to help him. But their relationship was irreparably damaged. The lesson here is that hiding financial truths from your spouse can strain a relationship and cause you to make bad choices. A family's finances are always better off when everyone is aware of the full picture.

4. Do Something With Your Money

Since most of Walter's money was obtained illegally, he had trouble investing it through traditional means. That's why he kept most of his cash under the floor, in storage units, and in barrels in the desert.

But for the rest of us, it rarely makes sense to follow the "under the mattress" philosophy of saving. Most bank savings accounts and CDs will pay you interest and are FDIC-insured. There are also plenty of other safe investments, including bonds, that will protect your initial investment and offer a return. Even stocks are generally safe if you invest in index funds and don't need your money for a decade or more. (See also: How to Get Started With Index Funds)

5. Manage Your Risk, and Don't Get Greedy

Walter White's downfall may have come when he continued to cook crystal meth even when he had more money than he'd ever need. He let ego and pride get in the way of sensible thinking, and continued taking big risks when he didn't have to.

It's tempting to always go after the highest return on investments. But investments with the highest returns often have the highest level of risk.

The lesson here is that if you are ahead of the game in achieving your financial goals, consider taking a more conservative investment approach to protect what you have. This is especially true for folks who are approaching the age at which they plan to retire.

6. Don't Buy Flashy Things, Especially for Your Kids

After Walter's drug money started rolling in, he went and bought Walt Jr. an expensive sports car. This was, of course, a terrible idea for someone trying to keep a low profile.

Even if you come into a lot of money legally, there are better things to do than blow it on an expensive material item. (Especially a car, which declines in value the second you drive off the lot.)

Even ultra-rich people should take time to teach their children about good financial habits. If you feel the need to get a car for a teenager, take them to the car lot and have them learn about how cars are marketed and priced. Let them help you negotiate the best price on a small, reliable, and fuel-efficient sedan. Once it's bought, set up a plan for having them pay you back.

And set a good example — parents who spend money irresponsibly have kids who spend money irresponsibly.

7. Don't Be Afraid to Ask for Help

When Walter needed to launder his drug money, he called Saul. When he needed some bad guys to disappear, he found Mike or some other henchmen. Without some help, there's a good chance Walt and Jesse would have been caught or dead before Season 3.

It never hurts to consult with experts when you are in over your head. If you are confused by how to invest your money, find a good financial advisor. If you have home or auto repairs that you can't handle yourself, hire a guy. It's OK to get help.

Any other financial lessons to be learned from Breaking Bad? Please share them in comments!

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:

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10 Small Business Money Myths to Reconsider

Annie Mueller — Fri, 23 Dec 2011 22:42:09 +0000

Link:

http://www.openforum.com/articles/10-small-business-money-myths-to-reconsider?

Money is obviously something a small business owner thinks about often. How much money do you have? How much money will it cost? How much money can you make?

While money itself may not be your sole aim in building a successful business, money-making is a necessary component of business success. Maybe your motive in business is to help people, or be creative, or change an industry. Or, perhaps, your aim is to make money. It doesn't really matter, because any business, no matter its purpose, must make money in order to sustain itself.

The Plunging-Profit Pattern

Unfortunately, what often happens at this point is a pattern that leads to less profit, not more.

The pattern starts with some long-held belief about money, and about how making money happens. You pull it out, eyeball it, and decide to try it out again. Or, more likely, you don't even consciously note it; you just allow it to control your decisions.

Maybe it's your Granddaddy's voice in your ear, saying that slashing prices is the only way to boost sales. Or maybe it's your old business mentor, giving you his tips on how to cut corner after corner, because that's his version of bootstrapping. Maybe it's your accounting professor, your tax guy, your lawyer, your spouse, your best friend, your own fears.

Whatever old hat it is you're waving around, it doesn't fit on your new business head. It doesn't work, and your profits plunge.

The Problem with Money Myths

Money myths aren't always incorrect. That's the trick, and that's why you keep believing them. Sometimes they do work, so their power over you remains. In fact, money myths are accurate in certain situations, but are not universally true. Applying a limited or faulty money belief as if it is universal or flawless is how small businesses wind up in trouble.

Ten Common Money Myths

Do any of these statements sound familiar? Have you heard yourself saying them or heard something similar echoing through your brain?

Myth #1: "Lowering my overhead (spending less) is the only/best way to increase my profits."

Myth #2: "Debt is the devil."

Myth #3: "Payroll is my biggest expense."

Myth #4: "I can't afford to __________ ."

Myth #5: "I have to offer the lowest prices to beat my competitors."

Myth #6: "Lack of money is my biggest business problem."

Myth #7: "Dumping money into XYZ area of my business would solve my problems."

Myth #8: "I'm doing the best I can with the money I have."

Myth #9: "Cutting jobs/cutting costs/cutting corners is my only option."

Myth #10: "Lack of profit is justifiable because it's a down economy."

Busting the Money Myths

Your job is to see the myths for what they are and are not. They are not universally true, unerringly accurate statements. They are limited. All you have to do is figure out their limitations. In other words, when should you keep the faith, and when should you stop believing?

Use these myth-busting questions to figure out if your money belief works for your current situation.

Why do I think this is true?
Where did I learn this?
What policies do successful businesses have about this money issue?
Is this the only option?
Is this the best option?
What are the alternatives? (There are always alternatives.)
What's the opposite?
What's the long-term outcome of applying this option?
If this were the only thing people would know about my business, would I do it?
What possible positive effects could this have?
What possible negative effects could this have?
What effect am I looking for?

Like it or not, part of your job is dealing with the money and being smart about the money. If the nuts and bolts of money-making don't appeal to you, you'll be tempted to divert to the easiest plan. The easiest plan will be the method that's most comfortable, and that's where the danger lies. Pay attention to your own money beliefs and make sure they're accurate for your actual situation before you act.

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

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