On Sharing Money

It's a well-known fact that I'm a huge fan of Slate. I love it for its fresh take on news, its advice columns, and its interesting blogs and bloggers.

There is a regular column called "Home Economics" about personal finances, and recently there was a 5 part series about a couple deciding how to manage their money together (or separate).

She broke couples up into three types: Common Potters, who have one joint account for everything; Sometimes Sharers; and Independent Operators, who maintain their separate accounts throughout life.

The Mr. and I are Common Potters--we joined our accounts when we bought our house, before we were married, and never looked back. However, the data calculator says that, in our demographic, 50% of people are Sometimes Sharers, 40% are Common Potters, and 10% keep separate accounts entirely.

Check this out:

• Common Potters have, on average, been together 11 years (we're at a whopping two).
• Percentage who are married: 94.1% (got it).
• Average age: 34.5 (our average age is 29.5...close enough).
• Percentage with children: 45.8% (not yet!)

Read the rest of the article here. It's a little different for everyone. What works for you? Let me know in the comments below!

Navigating the home buying process

I have a few friends who are currently shopping for their first homes. I've had a few people ask for my feedback on the first-time home buying process recently, so here are some thoughts. Buying a house is a big deal. Without a doubt, it is the biggest purchase you will ever make (or have ever made in your life so far). For example, my husband and I bought a house in April, 2010. We now have 29 years and 2 months left to go. That's a big commitment. Here are my top five pieces of advice:

1. Figure out why you are interested in buying a home. Do you want to put down roots? Have a stable home in which to raise a family? For investment purposes? Tax benefits? Make sure you find a home that fits your goals, and think critically about how long you are willing to stay in the home. As we've seen in the past two years, it's not always easy or profitable to sell your home when you want to.

Our house as it was being built

2. Make a list of the must-haves for the home you're looking for. Without solid criteria, you are likely to get caught up in the wow factor of a home that might not really be right for you. When we were looking for our house, here were some must-haves on our list: within 20 minutes of the city center, a backyard, enough space for us to stay long enough to have a family, and we weren't interested in a fixer-upper. We wanted a place that was move-in ready, but could be upgraded later.

3. Find a great real estate agent and mortgage broker and ask them lots of questions. We found our broker and agent through referrals from friends. Ask around and find someone who is trustworthy and informed. Everything about buying a home is confusing when you've never done it before. From the offer process, to the inspection and closing, make sure you know exactly what you're signing. A good agent, title company, and mortgage broker should answer as many questions as you can think of. In fact, I still email our broker occasionally for clarifications.

4. Be extremely realistic about your budget. You'll get approved for more money than you should probably spend on your mortgage payment each month. Keep in mind that when your broker quotes you your mortgage payment amount per month, it doesn't include property taxes, homeowners' association fees (if applicable), maintenence, insurance, or utilities. Ask for an estimated total cost.

Also keep in mind that you will undoubtedly come across last minute expenses at closing. Your closing costs are just an estimate until the day before you close. Don't put all of your liquid assets into your down payment. Ask your broker for an estimate of how much cushion is appropriate.  Then, add on any personal costs you'll accrue. For example, we didn't factor in that our brand-new home wouldn't have any window coverings. $1,100 later, we had blinds installed. Also, you may have to break a lease where you are currently living. And, don't forget about moving expenses and deposits on new utility accounts.

5. Be patient. This is the hardest one. You'll get attached to a home and excited about the possibility of moving in. Try not to get emotionally invested to a house until you sign on the dotted line. (I said try. I'm not sure if it's possible for most people!) Consider this doubly important if you are putting an offer in on a foreclosure or short sale. Closing on one of these properties can take months.

All this being said, don't let this scare you away! Although it can be a stressful process, owning a home can be very rewarding. We take a lot of pride in our house, love the sense of permanence, and enjoy the fact that each month, we own a little more of our home.

What home buying advice have you received, or have you given?

Extreme Couponing: Is it for you?

A few weeks ago I came across a show on TLC called "Extreme Couponing". It's about people who are extremely dedicated to collecting coupons and saving money at the grocery store. In some cases, they even end up getting things for free, by combining store and manufacturers' coupons. Check out a clip from the TLC show here. It is truly amazing. Although impressive (and I love that he gave some of his purchases to charity), I was a little skeptical of "extreme couponing", based on the amount of time it would take out of my week to score these kinds of coupon victories.

Tracy with her kids

I was recently put in contact with Tracy Vinson, a mother of two kids in Dallas. She is a big coupon fan, and has saved her family lots of money over the last few years. I asked her a few questions about her coupon quest.

How did you get started clipping coupons and thinking about ways to save your family money?

I tried couponing a few years ago and found it was too frustrating, so I quit and kept paying full price for all my groceries and pharmacy items. About a year ago I started receiving the Sunday newspaper through a special promotion. I saw the coupon inserts and thought I would give it another try. I researched online and through couponing blogs to find out the best method to use my coupons. I slowly started gathering coupons every week and printing them from online websites. It took a few months to get the hang of things and learn my store’s coupon policies, and since I have started I have saved at least 50%-75% on all my grocery & pharmacy purchases.

How much time do you spend per week working on money saving projects?

I clip most of my coupons on Sunday when I have gathered all of my newspaper inserts. Sundays are the days most of the coupon websites refresh their coupons, so I will log on and print out all the coupons I think I will use. I probably spend about 2 hours clipping and organizing on Sunday, then maybe another hour or so during the work week finding other deals that have come out.

How do you stay motivated? Many people want to try and save on things, but they get too lazy to actually clip coupons, or take the time to plan out their shopping trip. 

I stay motivated by thinking back to my previous shopping trips and remembering how much I have saved. I think of it as a challenge each week. It is such an uplifting feeling looking at the receipt and seeing what I spent and what I saved.

What is your advice to people looking to save money while shopping?

Start out slow. Couponing can get very overwhelming and you will find yourself losing motivation. Just give it some time. Also, stay organized; find a coupon organization method that works best for you.

Do you have an estimate for how much money you have saved in the last year?

I am in the process of making a spreadsheet so I can keep track in the future. I usually save anywhere from 50%-75% my grocery bill each week.

What is your biggest money saving/coupon victory?

I have been couponing for just about a year and have had many successful shopping trips, but the one that stands out the most to me is a Walgreens trip I did about 1 month ago. I purchased several items including some food items, cosmetics, shampoo, conditioner and toothpaste. After all sales & all coupons, I didn’t pay anything and I received about $10-$15 in register rewards to use on my next shopping trip. So you could say they paid me $15!


Do you have the dedication to be a extreme couponer?

...and you thought YOUR apartment was small!

We'd all love to have a sprawling, gorgeous, brand-new home, right? Maybe something out of the pages of Architectural Digest? Or the HGTV Dream Home?

But, especially with the housing market as it is, most people are staying put, and thinking of what they can do to spruce up their existing space, instead of moving in to a new apartment or house.

How's this for inspiration: A man in Hong Kong (where space is seriously at a premium!) has taken his 344 square foot apartment, and renovated it with sliding walls, so that he can transform the space in 24 different combinations, creating usable space, storage, and comfort. Planet Green did a video tour of the home recently, and it is truly unbelievable. Watch the video now.

How can you improve your current living space?

Rolling over your 401k

File this one under "lessons learned the hard way."

By the time you've been working for 5-10 years, you've probably changed jobs, been laid off, or moved to a different city and left your old job behind, Did you remember to roll over your 401k?

Back in April 2010, the Mr. left his old job behind, and his employer sent him information for how to roll over his 401k into a personal IRA. We filled out all the necessary paperwork, sent everything in, and assumed it was taken care of.

Fast-forward to December 2010, and he wants to check and see how his account is doing and set up online access. After a few looooong phone calls with the financial institution his IRA was with (who will remain nameless--lucky for them!) he discovered that when he enrolled, they never gave him any enrollment options.  We assumed that his money would roll over into the same or similar portfolio options as when he was at his employer. But no. His money had been sitting in a savings account for the last 8 months, instead of earning any money in stocks or mutual funds.

Basically, the stock market was going up, up, up for the last 8 months, and we made a whopping $1.47.

This commercial that I saw a couple nights ago totally sums up what happened to us:



(Please note that Charles Schwab is not the company I'm talking about in this post. This commercial just summed it up nicely. And I kind of like these half-animated people.)

We've since taken steps to move the money to another investment company, hopefully with better customer service.

Here are some tips to keep this from happening to you:

• Do your research. Find consumer reviews for investment companies. Try Bankrate. They have a lot of great information.
• Do your research, part two. This particular financial institution was in the middle of a merger, and that made it a nightmare to get answers to our questions. We got tossed around back and forth between the two companies just trying to talk to the right people.
• Make sure your new company is keeping you up to date about your investments, We never got a single statement during the 8 months we were with them.
• Figure out your options for changing to another investment company. Once you are at your new job, can you roll this money back into your new 401k? What if you are just disappointed with the service? Can you move it elsewhere? 

Bottom Line: It's your money, no matter how much it is. Make sure the company you choose is going to be your partner in growing your retirement nest egg! 

Discounts on lift tickets!

Skiing and snowboarding are expensive hobbies. A daily lift ticket can cost $60-$80, depending on the resort. Let's say you want to go 12 times/season, and you've quickly spent close to $1,000. However, there are a few discounts to be found. For example, buy 10 gallons of gas at any Shell station and receive a coupon for one free full-price lift ticket with the purchase of another. You can only use one at a time, but you can use the offer as many times as you want. The offer is available at ski resorts along the West Coast including Whistler Blackcomb, Summit at Snoqualmie, Crystal Mountain, Mt. Bachelor, and more.

The only downside is that most of the resorts limit which day of the week, or certain parts of the season it can be used, but it's easy to work around. I love taking the occasional day off from work to snowboard when the slopes aren't so busy--especially since I am still learning.

Bottom Line: Assuming you needed to buy gas anyway, you'll save $60-$80 when you and a friend head to the mountain. The Mr. and I are headed up to snowboard next week. Check out the website for details about the restrictions at various resorts here. Don't forget to have the gas station attendant stamp your receipt. Enjoy the snow!

A word on Mint.com

I try every month to keep an eye on how much money we're spending, compared to how much we're bringing in. However, with a checking account, two savings accounts, 401ks, various credit cards, and our mortgage, it's a lot to keep track of.

Back in my single days, I used Mint.com  to keep track of my finances. As my husband and I started combining our accounts, I lost track of my Mint account, and stopped using it.

Now that we're settled in our accounts and trying extra-hard to save some cash in 2011--we have many out of town weddings to travel to, as well as hoping to take a trip to Europe in the summer-- I decided to make a new Mint account. The best part is that my husband and I can both log on whenever we want to check out our funds, see how much we are spending, or track our investments. Since I've always been the one to manage our finances, it's nice that now he is in the loop without having to ask me a lot of questions!

There are lots of other great features that Mint.com has. My fave five are:

1. Payment reminders: Mint emails me a few days before my credit card payments or mortgage payment are due
2. Long term goals: Mint lets you track specific savings goals and follow your progress.
3. Categories: It divides all of your spending into customizable categories--rent/mortgage, entertainment, travel, utilities, and it shows you all of your different categories in a pie graph. 
4. Accounts: Mint links all of your accounts in one place, and keeps them constantly updated. I can see the status of all of my accounts in one place, without having to log in to each of my accounts online separately. 
5. It's free! 

Oh...and there's a mobile app!