Have you noticed gas prices recently? If not, that means you either live in a major city where you don’t own or need to own a car…or you live under a rock. Gas prices are HIGH! Seriously people, when you have to drive a lot, filling up your tank hits the budget hard! In light of that lovely fact, I thought I’d write a post about buying a car, which might have a car windscreen sunshade, so you can get better gas mileage. This idea is not new, and it comes up every time gas gets expensive. But what are the costs people don’t consider? Is it really worth trading in your existing car for one that sips the gasoline rather than asking for regular refills? Let’s find out together. [Read more…]
Since I’ve been tackling a lot of stressful financial situations in the lives of those I’ve counseled lately and in light of our upcoming baby #2, I thought I’d spend a little time to discuss the question of whether or not you should have life insurance on a stay at home mom. Let’s get a few basics out of the way first:
Strictly as insurance, I do not believe in “permanent” insurance (whole life, universal life, etc.). It is much more expensive than it needs to be as far as insurance goes and since we’re talking about INSURANCE (and not investments), let’s just stick to the idea of looking at term life insurance for a fair comparison in my examples and avoid all that debate for today.
I’m a HUGE advocate of having life insurance on SOME people. Do I need life insurance for Annie (who is not even 3 and brings in no income to our household) – NO. If she dies, we’d be emotionally crushed, but about the only impact to our finances would be the cost of her funeral and burial. A good way to be able to cover that is by getting a rider on an existing policy. It is cheap (per month) and $10,000 or so of coverage should be plenty.
Do I need life insurance on me? ABSOLUTELY – I’m the breadwinner in our family and if I die, Stacy needs income to be able to buy a Rolls Royce (strike) continue a reasonable lifestyle even if I’m gone. So that gets at the purpose of life insurance: replace needed income lost if someone in the family dies. That means if you don’t bring in any income to the family, you likely have no need for life insurance (beyond something to cover your burial). And that gets at today’s question – do families need to get life insurance on a stay at home mom? [Read more…]
Stacy and I have been seeing a commercial on TV quite a bit lately. It is of “the Fonz” (Henry Winkler) promoting reverse mortgages (see the Youtube video here) and talking about how great they are for seniors who want to enjoy retirement. Well, a friend of ours just so happened to ask what a reverse mortgage is and how it works, so I thought I’d give you a run-down of what a reverse mortgage is, how a reverse mortgage works, and whether or not it is a good idea for you. I know, I know, that means there will probably be some controversy, but I look forward to the healthy (repeat, HEALTHY) debate. So let’s dive in.
First, let’s define what a reverse mortgage is. A reverse mortgage is a loan supported by the Department of Housing and Urban Development (HUD) where a homeowner age 62 and above can borrow against the equity in his/her home. An equity release calculator can be used to provide an instant initial assessment of the minimum and maximum sums he/she could borrow. A reverse mortgage is only valid on a primary residence. This loan allows seniors to get a lump-sum amount, monthly payments or as a revolving line of credit. As common sense might tell you based on its name, a reverse mortgage is where the bank pays you money for your house. To keep things simple, we won’t get into the details of how much can be borrowed other than to say you can’t borrow more than the house is worth. [Read more…]
This week I want to keep up my theme of writing about money and marriage. Although I didn’t intend on turning it into a full-blown series, it has been fun to see the interaction it has created with readers and I truly believe it has helped many of you. I know it has helped me to formulate my thoughts well enough to be able to write it all out. This week, I want to write as a husband as much as a financial counselor. I know the demographics of readers on this site tell me it is mostly women who have clicked on here. But if you’re reading this and you’re not a man, you probably know one or two of them and could share this article. Plus, don’t you want to read something you can nod your head in agreement with? One last thing [Read more…]
This week I decided to address another angle of what became a very hot topic several weeks back, “Marriage and Money.” My initial post discussed the concept of “His Money and Her Money” and boy did you have varied opinions on how to handle that one! Then I dug myself in deeper when I wrote about charitable giving when couples don’t agree. I figure I’m on a roll so this week I’ll see if I can redeem myself a bit by sharing some essentials for marital financial bliss.
When Stacy and I got married I was clueless. Yes, I’m admitting in front of the thousands of people who will read this article that I was clueless about so many things related to marriage and how to be married. It was all new to me and I had to learn. I still learn something new every day and thankfully, Stacy has been gracious enough to learn along with me for all these years. Along the way, I’ve picked up some tricks when it comes to marriage and money that I thought might be of benefit to share. Fortunately, I haven’t made all the mistakes (hey, we’ve only been married for 7.5 years!) but I’ve counseled several couples who just plain didn’t get it and were/are headed for disaster. So what are my five top things husband and wife should agree on when it comes to money? [Read more…]
One of the most common excuses I get for people who tell me they “can’t budget” is that their income varies from month to month. Sometimes I hear it from someone who gets paid hourly and sometimes works overtime. Sometimes I hear it from someone who is a commissioned salesperson. Sometimes I hear it from someone who owns their own business and gets paid based on business profits. These are three extremely different situations, but the approach to budgeting is actually pretty similar. Let’s break it down. Before we do, though, let me say one thing about those who are self-employed or partially-self-employed. You must keep your business and your household finances separate. Even if every penny you earn comes from your small business and you are the only employee, keep good records and keep things separate. As you pay yourself a salary, make record of this. This good recordkeeping is the only way you’ll truly know how your business is performing and allow you to make a household budget. For you…and everyone else on a varied income, here’s how I recommend to do your budget: [Read more…]
A common question when someone is trying to get out of debt is how they should balance this goal with the idea of saving and investing for the future. They say something like, “Barry, I really want to be out of debt, but I also really want to be able to have a good retirement.” My response, even though it sounds a little sarcastic is this: who doesn’t want to be out of debt and who doesn’t want to have a good retirement!? So how do you balance those goals, because you and I both know there is only so much money to go around each month.
Let me just hit this one head on. What is important to you RIGHT NOW? Do you really want to be out of debt and on your way to total financial freedom? If so, then your best “investment” while you’re in debt is to [Read more…]
Since last week’s post about his money and her money was so popular (and controversial!), I thought I’d tackle another sensitive subject this week – relationships and tithing/charitable giving. I’ve gotten several questions regarding the tithe and how it applies to us as Christians today. Even though Stacy wrote on what the Bible teaches about tithing a while back, one thing I would like to address is the issue of what to do when your spouse disagrees about a course of action when it comes to giving.
First off, if couples agreed about everything when it came to how to spend their money, it would be SCARY. So let me start by saying it is perfectly okay to disagree about money. In fact, I would encourage you and your spouse to have some disagreements about things every now and then. It will help make sure you actually communicate with each other about what matters to you, and that is always a good thing! [Read more…]
It is common practice among married couples to keep separate checking/savings accounts and then separate out the bills in some agreed-upon manner and operate the household finances that way. They’ll divide things up where he pays the mortgage and his car payment, while she pays her car payment, the electricity and the groceries…or something like that. This concept has never made sense to me, but people will fight and argue until they’re blue in the face that this is the right way to operate a household budget. I believe it is a dangerous way to manage your household finances for many reasons. I wanted to use this post to talk about four reasons separate accounts are a bad idea: [Read more…]
Happy Sunday everyone! I have enjoyed this past week thoroughly and I hope you have as well. Thanksgiving is my favorite holiday of all because it is about food, family, and remembering the reasons you have for being thankful. Period. No gifts, no funky costumes (unless you count your fat pants as a costume). I usually take off the week of Thanksgiving to try to do some deer hunting and this year was no exception. I’m a bit odd when it comes to my hunting style, though. While I am always on the lookout for a nice deer for the freezer, I’m equally interested in the quiet as an opportunity to think and reflect on things that the busyness of life have just kept me from considering. It is a time I cherish each year. [Read more…]