Marriage should be good for your finances. Two live more cheaply than one. Couples often pay less for health and other insurance and are more likely to save.

But money problems are also a top reason for divorce.

Because the money talk often isn’t easy, couples tend to skip it or put it off. “There’s more shame around money than any other topic,” says South Dakota planner Rick Kahler. “Couples will talk about sex long before they’ll talk about debt.”

The “money talk” may be the most important talk couples have.

Read the entire article here

Congratulations! You’ve made the courageous decision to commit to financial sobriety. You’ve committed yourself to creating a spending plan, paying off your debt, creating an emergency fund, and fully funding your financial independence.

This probably means you’ve made a conscious choice to downsize your lifestyle. You may be driving a cheaper car, eating out less, shopping less, and traveling less. You may have moved to a smaller house or even a more affordable city. You may have gone back to school to improve your future income.

Whatever you’ve done, it took a lot of courage, focus, and hard work to put yourself on the road to financial sobriety. Here are some reminders to help you stay on that road:

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From time to time I offer financial courses through Community Education of the Black Hills. Classes on the fundamentals of making good investments and how to do your own financial planning usually fill quickly. A class on “financial sobriety”—how to change your behaviors around money and begin making wiser money decisions—had one person sign up. Based on my 30 years of financial advising, this wasn’t a big surprise.

Research tells us 70% of US citizens have no savings and live month to month or are insolvent. Only 9% have saved over $100,000 and just 3% over $500,000. Why is this? The simple answer is Americans have a significant resistance to saving.

Mathematically, the solution to this is very simple. Continue Reading »

“Any way you slice the pie, Americans better come to grips with the fact their lifestyles are going to contract.” That’s the bottom line I’ve gleaned from attending several conferences and listening to some of the nation’s top economists recently.

Basically, the US is spending far more than it takes in via tax revenues, creating an annual deficit. The shortfall is covered by borrowing the money, which adds to the national debt. The Treasury Department borrows the money from two sources: private investors (individuals, banks, companies, and other governments) and the Federal Reserve Bank.

Where does the Federal Reserve get money? They create it with a keystroke, which is the digital-age equivalent of printing money.

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Be frugal. Live on less than you make. Save for the future. It’s my message, and I’m sticking to it.

Just in case you’re getting tired of that message, though, let’s take a look at thrift from a slightly different perspective. For anyone who wants to throw cash around, here are some effective ways to waste your money:

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June is traditionally filled with graduations and weddings, rituals that mark two of our most important life transitions. Whether you are a graduate walking across the stage or a newlywed walking down the aisle, you’re focusing on your future. It’s a perfect opportunity to think about what you need to do financially to provide for that future.

Here, adapted from a column I originally wrote a few years ago, is what I might call “Life Planning 101 for Beginning Adults.” It’s a summary of my best financial advice for graduates, newlyweds, and anyone else just starting out in their adult lives and careers. Here’s how anyone can manage money wisely to create a life with more security, flexibility, and opportunity.

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“Something you keep on buying that just isn’t worth your hard-earned dollars.”

That’s Kristin Colella’s definition of a “money-waster” in her article published March 23 in the online magazine MainStreet.

Colella cited Rick’s recommendation: “Some of the best money a consumer can spend is for a subscription to Consumer Reports.”

Here’s a link to the entire article, How to Spot a Money Waster.

Have you ever seen a Super Bowl ad touting how much money you could save if you bought something second-hand? Of course not. There’s not a lot of encouragement in our culture to buy used stuff. Even the one exception, a used home, is described as “existing.”

Buying used just isn’t cool—that is, unless you’re a wealth builder. Many of them look upon buying used as more of a badge of honor than an embarrassment.

Certainly, there are many items that are best purchased new. Toothbrushes, toilet paper, and underwear come to mind. Yet there’s one thing that’s almost always better to buy used—a vehicle.

Let’s look at a few common myths around buying a new car.

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Guest Post From Kathleen Fox

Lingering in the shower the other morning, thinking deep thoughts as a way of postponing the inevitable moment of shutting off the nice warm water and stepping out into the cold bathroom, I started pondering ways to make cuts in the budget.

Not my budget. Other peoples’ budgets. It’s so much easier to be frugal with somebody else’s money. Not quite as much fun as spending somebody else’s money, but close.

Anyway, it occurred to me that one of the reasons it’s so hard to reduce spending is the way we react emotionally to being told what we “should” or “must” do.

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After a short period of saving more of their disposable income at the depths of the recent recession, Americans are returning to recent historical patterns of spending more and saving less.

Usually this trend indicates “happy days are here again” as the decline in savings means consumers’ confidence is rising. That is not the case today. Consumer confidence is just half of what it was at the peak of the “good old days” of 2007. That year our national savings rate was 2.1%, just above its post-WWII low in 2005 of 1.5%.

As millions of jobs disappeared and consumers hunkered down during the 2008-2009 recession, our savings rate almost tripled. In 2008 it was 6.2%. This thriftiness didn’t last long; by the fall of 2011 our savings rate was back to a paltry 3.6%.

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