Finance Tips for Married Couples

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Money management is one of the top stressors for married couples, and it's not hard to see why! While monthly bills and old debts are difficult enough to manage as a single person, it's even more daunting to manage as a couple. However, a little financial advice can go a long way. Check out our top finance tips for married couples, and see which strategies you can work into your new life together. You might find that just a few adjustments can have a huge impact on your marriage - and your bank account!

Prioritizing Goals

As you know, communication is essential for a happy and healthy marriage. Financial planning is no different. While some people get uncomfortable when talking about money, setting your priorities with your significant other is crucial when working toward your future goals. Do you aspire to own a house? Do you want to own a business? These are long-term goals that are worth keeping in mind while budgeting. What about short-term goals? Maybe you want to plan a fun vacation together or revamp your kitchen. Set a plan in motion to achieve the life that you want.

Managing Money

One of the most important and most personal decisions is whether or not to combine your money. Some couples prefer to throw all of their money into one account, while others prefer to keep assets separate. Maintaining separate accounts with one joint account is a good compromise that balances the best of both worlds. This allows each individual some financial independence, but also creates a common pool of funds to use collectively for bills and other expenses. However, it's a good idea to weigh the pros and cons of various methods to figure out which will work the best for your particular household.

Handling Debts

Not everyone enters a marriage with perfect credit, but it's important to work toward a stable financial future. If you have past debts, come up with a plan to eliminate those old bills. You may want to work together as a couple, or the debt-holder may wish to take care of debts alone. But either way, it's essential to come to a consensus before moving forward. Additionally, make sure that you prevent debt in the future by living within your means. That means taking it easy on the credit cards and impulse buying. If you need tips, feel free to check our our simple money tips for young couples!

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What is a Debt Snowball?

Credit Cards

Even though everyone tries to make good financial decisions, sometimes a little debt can spiral out of control. Suddenly, you find yourself with a pile of bills and a whole lot of stress. So what do you do? Create a plan! The debt snowball method is a way of tackling your debt in small and manageable steps, so you can easily make progress without feeling overwhelmed. Let's go into the basics of the debt snowball method, and learn how to get out of debt!

Step 1: Make a List

Before you can pay off all your debts, you need to know exactly who and what you need to pay. Make a list of all your debts in order of smallest to largest. For now, ignore the interest rate and just pay attention to the total amount owed. Here is an example:

Credit Card: $1,000 Auto Payment: $3,000 Student Loans: $10,000 Mortgage: $50,000

This list will become your blueprint for debt reduction. From now on, you will pay the minimum payment on every bill on your list - except for the smallest. The smallest bill is your first priority for elimination. That means any spare cash that you encounter will go into paying that bill until it is fully paid off. In this example, you would pay the minimum amounts on your auto payments and student loans. But any money you obtain through a second job, gifts, or budgeting will go toward your $1,000 credit card bill. Once the credit card bill is paid, repeat the process for your auto payment and so forth.

Step 2: Make a Budget

Prioritizing your debts is just one part of the debt snowball process. The other crucial step is to make a reasonable budget. List out all of your expenses for the month. This will include essentials like mortgage or rent, as well as non-essentials like entertainment. Here is an example:

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What is Credit Card Consolidation?

Credit Cards

If you’re up to your eyeballs in credit card debt and drowning in the chaos of juggling multiple payments and due dates, credit card consolidation might be a good solution for getting you back on track.

How Credit Card Consolidation Works

Just like it sounds, credit card consolidation takes all of your credit card debt and combines it into one lower-interest loan. That means you only have one bill, one monthly payment, and the security of knowing exactly what you owe and what kind of progress you’re making.

Your Options

Balance Transfers

Many consumers like to use balance transfers to bring all their debt onto one credit card. This can be tricky, though. You need to have strong enough credit to open up a new credit card account, and you want a new account that has a lower interest rate than what you’re currently paying. There are a lot of alternatives out there that you can apply for. You can often get a new card with a zero interest promotion for a certain period of time, but be aware that there are usually fees associated with transferring a balance from another credit card, and you might be limited on how much debt you can move to the account. Do your homework and make sure you understand what the new annual percentage rate (APR) will be once your promotional period ends.

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Can I Have a Credit Limit That’s Too High?

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Having a lot of available credit sounds good, right? Well, let’s think about this for a second. Lenders are in the business of making money off the interest you pay, so increasing your amount of available credit is a technique for adding to their profitability. But what’s best for your situation?

What is Available Credit?

Simply put, your available credit is the amount that the bank or lender has agreed to loan you. It’s based on your credit limit minus the balance you owe. Lenders decide how much credit to make available based on your income and credit score, which basically tells them how big of a risk it is to lend to you. They look at several factors, including whether you pay your bills on time and if you’ve ever defaulted on a credit obligation in the past.

Should I Increase My Credit Limit?

Sometimes people try to raise their credit scores by increasing the limits on their credit cards or applying for new ones. That’s fine, but it’s important that you understand your credit utilization ratio and how it affects your credit score. That’s the ratio of how much of your available credit is being used. Yes, increasing your credit limits may help boost your credit rating, but if you max out your available credit, you could actually hurt your score. Remember, more available credit comes with more danger of getting into debt you can’t manage.

High-Limit Credit Cards: Are They a Good Idea?

Obtaining a high-limit credit card comes with big responsibility. Does your income support your ability to pay it off? What about your total amount of credit in use? An unintended consequence of having a high-limit credit card is that it can hurt your ability to get other credit, such a mortgage or auto loan. The numbers may appear too risky if a bank sees the amount of credit available to you. There are quite a few credit card options out there, so explore those before jumping into a high-limit credit card.

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Don’t Fall for These Credit-Building Myths

Credit Building Myths

If you’re concerned about ​how to build credit, don’t fall for these myths for improving your credit score. It’s possible to achieve a good credit score, but don’t waste your time focusing on the wrong things. If you can establish a good track record of consistent payments, along with a diverse mix of the types of credit you have, you can ​build up a good credit score​.

Myth #1: Removing Old Inquiries

Every time you apply for a loan, creditors pull your credit report with a “hard” inquiry. This causes your score to go down because it shows you want more credit and more risk. Other inquiries, like offers you receive in the mail or from potential employers, are considered “soft.” You may have heard that if you have more soft inquiries, it can bump the hard inquiries off, but don’t spend time trying to generate more soft inquiries because this is not a major factor in your credit score.

Myth #2: Closing Old Accounts

Although it seems like closing accounts will help improve your score, it won’t, and it could actually hurt it. Why? Because it could shorten your credit history and reflect a smaller amount of available credit, neither of which helps your cause. You want your credit history to be long, and your utilization rate, or how much available credit you’re using, low.

Myth #3: Opting Out of Credit Card Offers

It’s fine to opt out of credit card offers if you’re simply sick of junk mail, but don’t do it with the idea that it will help raise your credit score. These are soft inquiries that don’t affect your credit rating, so it’s not going to make an impact whether you get them or not.

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Bad Money Habits Just Bring You Down

Bad Financial Habbits

Who really wants to be ​bad with money? Sometimes it just sort of happens, and you wake up one day in a difficult situation. If you can swap the bad money habits that creep into our lives for positive habits​, and start making ​good financial decisions​, you’ll be happier and less stressed out.

Living Without a Budget

The idea of a budget hurts, but it’s key for understanding how much money is coming in, what you can spend, and more importantly, what’s left over for saving and investing. Between all the apps and spreadsheets out there, it’s easy to plug in some basic information and start tracking. Weekly and daily updates will help keep you from spending out of control, which will help you avoid the next bad money habit.

Living Beyond Your Means

Overspending is one of the biggest challenges facing people today, with our consumption-driven economy and the fact that we hardly ever pay with cash. If you’re charging basic necessities, running up credit card balances, and borrowing money, you’re clearly spending more than you have. Allocating dollar amounts and holding yourself accountable is the way to do it. And, if you prefer to pay with plastic, use a debit card or pay your credit card off in full each month.

Using Auto-Pay for Everything

Automatic savings withdrawals are a fantastic way to save money because you don’t really feel it. But being desensitized is a bad thing if you’re automatically paying your bills. You need to feel how much money you’re really spending and plan to have enough money in the account. Automatic alerts that remind you to pay the bill are a much better way to do it.

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Smart Short-Term Investments

Short Term Investments

Short-term investments offer you the opportunity to grow your money, while protecting it, too, since you’ll probably want to access it within the next five years. This means contemplating very different vehicles than when you’re investing for retirement and other long-range goals because you don’t have as much time to ride out any market lows. It’s normal to feel intimidated by all the choices out there, and maybe you don’t feel like you have the ​financial skills​ you need for making ​decisions​. Consider these ideas for smart short-term investments that have growth potential, combined with safety and stability. They’ll help you avoid ​investing mistakes​.

Money Market Accounts

Money market accounts are similar to regular savings accounts, and they’re FDIC-insured. When you open this kind of account, you’re investing in the market for short-term debt, so you earn higher interest than a standard savings account. Money market accounts give you easy access to your funds, often via debit cards and checks. Minimum required investments can be in the thousands of dollars, but shop around because there are accounts available with much lower minimum deposits.

High-Yield Savings Accounts

High-yield savings accounts may be available at your local bank or credit union. With rates of one percent or higher, high-yield savings accounts blow away the interest rates on traditional savings accounts, especially the ones offered by online banking institutions. Like money market accounts, they also offer easy access to your funds and are FDIC-insured. The good news is the minimum deposit requirements are not high. The bad news is that the interest rates are still quite low.

Certificates of Deposit

Certificates of deposit, known as CDs, are short-term investment vehicles that put your money away for a set period of time at a specified interest rate. Banks and credit unions offer a number of options for term lengths, usually three months to five years. The longer the term, the higher the interest rate. CDs are FDIC-insured, and the interest rates are typically higher than what you’ll find with a savings account, but you can’t access your money until the term is up without paying a penalty.

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How to Save Money on Car Insurance

happy woman saved on car insurance

Life is just expensive, and auto payments and insurance are one of the biggest monthly costs people have outside of housing. Wondering ​how to save money on car insurance? Here are some tips that can help cut your bill:

Go Shopping

Prices can vary dramatically from company to company, so get several quotes. It’s easy to do online and with a few phone calls. Some state insurance departments publish price guidelines, which is helpful for comparing to see if you’re getting legitimate quotes.

Weigh Your Options

The reason you have insurance is to protect yourself in the event of an accident. Medical bills and legal fees can be astronomical, so consider how much coverage you need carefully. It’s more important to have enough coverage than it is to carry a low deductible, which is more costly. Tweak your quotes to see how much coverage you can get, while at the same time raising your deductible.

Ask for Discounts

Car insurance companies offer discounts for a number of reasons, including time without an accident or ticket, the number of miles driven each year, and multiple cars and drivers. If you live in a lower-crime zip code and store your car in a garage, you might be able to get a lower rate. Teenage drivers will cause your monthly premiums to skyrocket. Sometimes companies offer good grade or driver education discounts, and if your teen is away at college, be sure to update your policy accordingly so you’re not paying for someone who isn’t actually driving.

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Preventing Credit Card Fraud

Credit Cards

You've heard stories of financial catastrophe in the news, so how can you prevent credit card fraud from affecting you? A little prevention and research can go a long way toward your safety. By protecting your sensitive information and maintaining good habits, you can thwart potential criminals from escaping with your hard-earned cash. But first, let's dive into some of the most common methods of credit card fraud that every consumer should know for savvy spending.

Types of Credit Card Fraud

Credit card fraud is an international problem, and the United States experiences the third highest rates of fraud in the entire world! In fact, almost 30 percent of consumers have dealt with this agonizing problem within the last five years. What are the types of fraud that you may encounter?

Phone or Mail Order: This fraud occurs when you make purchases through either the telephone or through mail order catalogs. Online Shopping: Your credit card details may be stolen while making purchases online in an insecure environment or fraudulent site. Online Banking: False links through email, text messages, or malware can steal your bank account information. Face-to-Face: Your card or PIN number may be stolen and used in a physical store.Fraud Techniques

As you can see, there are tons of different avenues that thieves use to steal your credit card information. But there are a wide variety of techniques they can use to complicate matters even more.

Counterfeit Cards: While using a tampered ATM, your magnetic stripe may be copied and used to make counterfeit credit cards. ID Theft: Thieves may steal your personal information and open new accounts, like bank services and credit card accounts. ATM Tampering: A device is installed onto the card reader which steals your PIN and swallows the card.Preventing Fraud

Given the countless scams and criminal techniques used, how do consumers protect themselves against credit card fraud in the United States? The first way to counter criminal attacks is to maintain awareness. A trusting consumer is a vulnerable consumer, so be aware of your security risks every time you whip out your card. For example, avoid making purchases over the phone or through email. Make sure your online shopping sites are secure. And even if the site is secure, try to avoid making purchases when you're using public Wi-Fi. Wait to head home to a more secure location to avoid exposing your sensitive information.

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How to Use Graduation Money Wisely

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When you have graduation money in the bank, it may be tempting to head on a shopping spree. And while every graduate deserves something special for completing such an important goal, we encourage you to think ahead! From college savings to dorm decor, you can put yourself in a great position for the future if you use that graduation money wisely.

Savings

Dropping your graduation money into a savings account may not be the most exciting option in the present, but this smart decision can be a major asset for the future. Consider stashing a portion of your grad cash into a savings account as a small nest egg for the future. You can use that money to cushion the blow if you run into financial mishaps, like unexpected car expenses or tuition hikes. Even a small rainy day fund can prevent major headaches in the future!

School Supplies

If you're college-bound, consider diverting some of that graduation money into your freshman year school supply fund. Get a head start on the crowd by looking for your books early. Used copies sell out fast, and you can save a lot of money by securing your reading list early. You might also think about upgrading your computer before you head out to college. Look for fast, dependable, and portable models over the latest fads. You'll spend countless hours behind that computer screen, so be sure to get one that you can count on.

Dorm Decor

Are you heading into the dorms for your freshman year? Then you might want to pick up some new supplies to make the place a little cozier. Think about supplies like towels, shower caddies, plates, mugs, and other everyday essentials. Don't forget to do a little research to determine what size bed sheets you'll need and what items are allowed in your particular dorm. Many colleges limit items like candles and appliances, so be sure to double check before you shop.

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