Financial Gender Roles

More information from the National Marriage Project distilled in this article, “Five tips for Marital Bliss“, that I found intriguing:

-Make your own homemade goods
-Earn a college degree
-Pay off your credit cards
-Reverse the financial gender roles
-Work outside of the home

Obviously all of these have financial implications. We don’t do so well on making our own homemade goods, but we try; since my husband works in residential treatment, he has many meals there and I find myself cooking for one. We need to be better with leftovers, I guess. The other tips are easier for us, since we both probably spent way too much time in school. In fact, we were both students working on 2nd degrees when we got married.

The financial gender roles aren’t quite switched, since we have separate investments but have very similar investment goals, but we do find that grocery and Target runs that we make together keep us ‘in check’ more than trips we make solo. Or, at least, I don’t browse clothes when he tags along!

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Marriage and money

The National Marriage Project at the University of Virginia took a look into marriage and money with their report on “The State of Our Unions, Marriage in America 2009: Money & Marriage.”

Things I found most interesting are in Jeffrey Dew’s piece, “Bank On It: Thrifty Couples are the Happiest” (pg. 23 of the full report):

When individuals feel that their spouse does not handle
money well, they report lower levels of marital happiness.

Couples who reported disagreeing about finances once a week were over 30 percent more likely to divorce over time than couples who reported disagreeing about finances a few times per month.

In particular, couples who are wise enough to steer clear of materialism and consumer debt are much more likely to enjoy connubial bliss.

Seems that financial disagreements are the major predictor of marriage success or failure, so agreeing on finances and also having more assets than debt is actually critical to marital happiness. Probably something many people knew intuitively, but nice to have research to back up that hunch.

Premature celebration

So last Friday I was excited that my student loans finally seemed to be in one place, but I guess I celebrated prematurely, because yesterday I got a letter stating that a chunk was now at my original servicer. Get that? I don’t. Customer service people I talked to didn’t understand it either. It’s going to be researched by the Federal Student Loan Consolidation Research Department. Doesn’t that sound official?

I got forbearance for one account, and I’m hoping it gets resolved before that runs out; they gave me 12 months, but I’m not holding my breath. I wrote a very scathing letter to the FSA Ombudsman who wrote me back (FINALLY) last week. The last line was:

This is seriously very upsetting and I can’t understand how and why this has happened. If a private business did this to its customers, it would be reported to the Better Business Bureau and have a rating of F-.

Needless to say, I’m unhappy with this development. My loans exist in two places simultaneously. If I could do that, I’d get a job in my second location and pay off these stupid loans in a year.

Ongoing student loan saga

I called this week about my my student loan situation, and they put my loan in forbearance for a couple months to buy me some time until everything had been really consolidated. Apparently it can take 4-6 weeks for consolidation payments to be processed, so my April 18 consolidation date meant I paid double on the same amount in April and May. Ugh! But the forbearance made me feel better, and when I logged into Mint.com this morning, it couldn’t connect with that servicer…

So I went to log-in at the servicer’s site, and my loan is gone! Whew. Glad that’s all taken care of. Now only one payment on my debt means we can pay more on my husband’s debt and have it paid off soon.

Loan consolidation: for better or worse

As I mentioned before, currently we are completely consumer-debt free. That means no credit card debt, no car payments, and definitely no pay day loans. However, we do have student loan debt for our 2nd B.A. (him) and a Master’s (her). Due to the economy taking a hit while both of us were still in school, our lending situation is a bit… complex.

Her: original lender stopped offering student loans one year before graduation, so went with a new lender. New lender sold loans to government upon graduation. Old loans were requested to be consolidated on August 8, 2009. Status: consolidation payments made, but not yet processed, so loans are in two places. Don’t even get me started.

Him: only had one lender to begin with, but half of the loans were sold to the government upon leaving school. The other half were requested to be consolidated in September 2009. The other half then moved servicers (oh, joy), and the original half was consolidated with the old servicer. Huh? So, loans are in two places, as well.

Honestly, at this point, the goal is to overpay the heck out of his, and pay off one of his loans within the year, and the 2nd loan next year, since we are still used to living like students. As for hers, that will take a while longer, but the hope is that the bulk will be paid off within a few years, as well, barring any unforeseen bumps. We’re using the Snowball method, meaning that, once the first loan is paid off, we’ll pay that amount toward the 2nd loan, and so on, until we’re paying a huge amount toward the last loan so it’s paid off quickly. This will save us a huge amount of interest. Student loans at 6.5% when we could get a mortgage for around 5% is awful.

So, how do you deal with debt? Pay off your credit card in full at the end of every month? Hide your head in the sand and hope it will disappear?

No vacations but staycations

I was looking at my accrued PTO (paid time off) today, and realized I’ll be banking quite a lot this summer and fall. And yet, we don’t have any vacation plans other than staying with my parents in their rental cabin for our annual family resort vacation up north on a lake in Minnesota. I was hoping to take a short vacation, possibly to Wisconsin, this summer, but I think we’re going to wait on that trip (to see Madison and Taliesin) for when more of our debt is paid off.

We’re really going to be taking Dave Ramsey’s vacation advice to heart. By really sticking to our Debt Snowball, I think we’ll be enjoying lovely, debt-free vacations in the years to come.

Retirement planning, or, aren’t you too young for that?

I think it’s funny when people comment that I’m too young to be thinking about retirement. Well, I’m probably too young to be fantasizing about moving to Spain and living out my days near the ocean, but I’m not too young to be putting aside some money each month to fund whatever my retirement fantasy becomes as I get older.

At this point, my husband and I only use pre-tax accounts for retirement savings. We each have an IRA (mine’s a Roth, his is a traditional) and have pre-tax savings through our employers. My husband’s IRA is a managed account through his credit union financial advisor, while mine is through Fidelity.com where I chose a mutual fund in which to put my IRA dollars.

We have our reasons for choosing what we did. I am much more savvy about investing and interested in the process, so I’m comfortable choosing my fund and sticking with it in good times and bad (mostly bad lately… oh well). My husband doesn’t like to think about his finances as much, so he’s more comfortable working with a professional and taking his advice.

I mentioned the 401(k), 457(b), etc. accounts in my previous post about budgeting. The really nice thing about those accounts is that we never even see the money. Instead of seeing the money go into the checking account, and then having to set it aside, it’s taken out of our checks before it even hits the checking account. It’s automatic saving, and we’re actually putting the recommended 15% of our income toward retirement savings already, even though it’s not until Baby Step 4 that Dave Ramsey gets us to retirement savings. This is because we know the value of starting earlier rather than later. Check out the impact of time PDF in this blog entry for a demonstration of the power of time.

Playing around with a calculator like this one can give you a vague idea of how much to be saving. I really like the planning tools that Fidelity.com offers, but those are only available if you have a Fidelity account. Even saving a little is better than saving nothing!