What’s the biggest thing to happen to you financially? Here’s what Erin – a self-professed insurance geek who’s married to a network security geek – had to say about our Question of the Month.

The newly married tend to romanticize about how great their lives will be together. I admit it; I too wore the foggy love goggles. And the fantasizing doesn’t stop after the honeymoon. Once you get through the guest lists and thank you cards, you’re onto thinking about your dream house and kids. But the one big thing we tend not to talk about is one of the most crucial elements to a happy marriage – how to combine your finances.

I’ve always been self-sufficient and a stickler about budgets. I owned a modest home, clipped coupons and amassed quite a bit of retirement savings. But my husband wasn’t quite there. He rented, he charged whatever he wanted on “toys,” he ate out often and had a pretty serious coffee house habit. On pay day, he’d put almost his entire paycheck back towards his credit card. He didn’t have any savings for retirement (although he did have a decent sized emergency fund).

After we got home from our honeymoon, I began to update my trusty Excel spreadsheet to factor in our newly combined household income. But that didn’t go over quite as well as planned. Almost immediately, we began to butt heads over what he considered his spending money versus what was to be used towards bills. It took several months, but after putting a drop dead date on “fun money,” my husband and I appeared to be merging into a combined budget pretty well. There were many adjustments, fights and squabbles along the way – but they were well worth it.

We’ve now been married for a little over two and a half years. When he starts to complain about how he doesn’t have extra money to redo his computer lab or buy a gaming system, I bring up his retirement account and remind him that we have other goals in mind now. He nods and smiles, thankful for the reminder.

Think home ownership’s something to aspire to, but still out of reach? Here’s what Sarah, a 20-something Savings Associate

I’m usually perfectly happy renting an apartment – that is, until I spend 4 hours on a beautiful Sunday afternoon watching home improvement shows, imagining all the things I could do to my house … if I actually owned one. I could design my dream bathroom, paint my walls any shade of the rainbow or even build a princess-inspired pool in the backyard (what girl doesn’t want that?).

But visions of home-ownership grandeur aside – I got wondering, could I really afford to be a home owner? What am I really getting for my rent check each month? What do I have to show for the almost 10 years I’ve been renting apartments?

I’ve always assumed that renting a place is cheaper than owning a place. If my air conditioning or heating unit breaks down, I just call up maintenance – for free. I don’t own a lawn mower, a snow blower or any other yard equipment. Renter’s insurance is less than $20 a month. I don’t pay for trash pickup (though I do have to lug it all the way down the hall) or property taxes.

Of course, there are the downsides, too. Parking’s a nightmare if I dare to get home after 6PM. I don’t have curb appeal or a backyard. My bathroom is a hideous shade of yellow, which I can’t change. I can only do laundry when the washing machines are free – and I remembered to get quarters. I carry groceries up 4 flights of stairs every week. I’m convinced the upstairs neighbors installed both a basketball court and disco hall in their living room.

If I want true ownership – and all the benefits that come with it – I’m beginning to realize that I’ll have to make a move. And this time, the move might be more permanent.

A recent study by Trulia shows in 98 of 100 housing markets, it’s cheaper to buy than rent. According to Trulia’s rule of thumb, if the cost of buying is less than 15 times more expensive than renting – buying makes more sense.

Maybe it’s time to change my mind. Maybe buying really is cheaper than renting now. Maybe it’s time to have my own yard. Maybe it’s time to trade the rent check for a mortgage payment.

I wanted to get an idea of how much I could afford to buy – and see if it really is cheaper to buy than rent. Skeptically, I worked some numbers and was kinda shocked with the results. I could have a monthly mortgage payment for the same amount as my rent check. I could go from a shared 2-bedroom apartment to my very own house with no significant increase in monthly living expenses.

That’s some serious food for thought.

So what now? I just signed a lease for another year in my apartment, so I have some time before I can make a move. This year will give me time to research houses, mortgages and save up for a down payment. And it’ll also give me some more time to start dreaming up all the amazing things I can do with a house all my own.

How about you? Are you a renter thinking about taking the home ownership plunge for the first time? Have you already taken it? What’s your experience been like?

Sources:
TIME Moneyland

Here’s what Liz – an LA-based event planner who hopes to be debt-free in 3 years – had to say about our Question of the Month.

Last month, for the very first time in my life, I overdrafted on my checking account. Granted, my life so far hasn’t been that long (I’m 26), but when listing my virtues, “good at managing my money” has always been at the top of my list (along with “I cook a mean steak” and “dogs always like me”). But I was fooling myself. In reality, people who are good with money don’t overdraft on a $150 check, or have their card declined at the grocery store or the gas station. The red flags that had been looming on the horizon were suddenly in my face – I was broke.

I couldn’t remember the last time I had actually followed any of the budgets carefully drafted in my notebook. And when I took inventory of my financial state, I kept coming up in the red. I was 26, living with my mom and had a pile of unpaid bills I liked to hide under a stack of books on my desk. I was living in financial denial. What was supposed to be a tough, but short, transition into financial stability and adulthood had turned into a three-year stall – and the checkout lady telling me my $3.99 transaction was denied was a sign I couldn’t gloss over with a shrug of my shoulder and a quip about the recession. Recession or not, poor job economy or not, odd lunar year or not, my spending was outpacing my earning and instead of building a nest egg so I could move out on my own, I was sinking further into debt.

The next day I called my bank and had the overdraft fees returned and made a list of all my outstanding bills. It was not a short list. I took out my notebook and drafted another budget. I calculated when I’d be done paying my school loans and how long it would take me to save up enough money to be on my own. That was the easy part.

The hard part is reminding myself daily that this is my life now – that spending less than what I make is not optional, but necessary. Reality is not easy. Reality means being a grown-up and facing the facts. All the numbers in my checking account aren’t hypothetical and tax returns only cover so much. For now, my budget is very limited, but I look at my checking account balance often and remind myself that anything that I buy that I can’t afford to pay for in cash is a step I’m taking away from reaching my goals. Reality may not be easy, but denial definitely lost its fun.

Which got your friends at We, the Savers thinking. Can the same be said about time? Can time – that is, more of it – make you happy? Or does more time just give you more opportunity to twiddle your thumbs?

A couple of super smart researchers from Stanford Business School set about to find the answer, and they found that indeed, yes, time can bring about real happiness. “We know that people with meaningful social connections are happier than those without them,” says one of the researchers. “The more time that individuals spend with their partners, best friends and close friends, the happier they are.”

Which all sounds fine and good, but between all of life’s infinite demands, we barely have time to breathe, let alone spend time chatting over a leisurely lunch. So how can we create free time in a never-ending vortex of responsibilities? The trick here is to simplify your life and find ways to accomplish the same goals (with the same level of completeness) in as short a time as possible. And one of life’s biggest necessities (and time sucks) is conducting finances. After all, who in the past hasn’t spent hours sifting through stacks of bills, writing out checks and licking gummy stamps? Or schlepped to the ATM to get cash out to pay a friend? Or even trudged to the mailbox or bank branch to deposit a check?

But that old-school rigmarole is now squarely in the past.

Innovations in banking have changed the entire financial landscape and its effects on customers. Mobile payments like our Bill Pay have helped customers conduct their banking as fast and easy as possible. Just a few clicks on the computer or mobile device and a month’s worth of bills are paid – ba- bam – just like that. Or, with Person2Person Payments, within seconds you can electronically reimburse a friend for lunch or pay your dog-walker for taking Fido for a stroll. But there’s a new innovation in town, and it’s up there with ATMs and debit cards in the rarified pantheon of banking breakthroughs: it’s called remote deposit capture. You may have heard of it (ours is called CheckMate – check out a demo). And it’s destined to change the way people bank forever.

The premise behind remote deposit capture is simple. Instead of mailing in a check or heading to a bank branch to make a deposit, this technology allows the Customer to snap a picture of a paper check (both sides) and upload the image either from a computer or mobile device. It’s a digital deposit that can be conducted in less than a minute. And you can even do it during normal business hours, from the park on weekends – even from bed at 3 AM while wearing your PJs and devouring a pint of mint chocolate chip.

So start whittling away at all of life’s little chores and try to find ways to do more in less time. After all, time’s on your side – why not make the most of it?

What do you think, Savers? Does having more free time really bring about happiness? Or is it just more time to think about all the stuff you have to do? What time-saving tricks do you have up your sleeves?

Sources:
FDIC

How do you define being a Saver?

Here’s what Nick – a Midwestern golfer, reader and Saver – had to say about our Question of the Month.

I define being a Saver as acting like a squirrel. See, a Saver is not someone with a short-term goal that starts out as a New Year’s resolution and fades quickly. A Saver is someone with a long-term savings plan tied to a specific goal. That’s where the squirrel comes into play. A squirrel focuses on its short-term needs (think housing, clothing, and food for humans) while keeping in mind its long-term needs as well (think retirement and college saving for humans). A squirrel works hard in the fall months to find acorns to eat, but also makes sacrifices towards the end of the season by saving a few acorns in preparation for the cold months.

This makes a squirrel a Saver in its own right.

It is easy and convenient to think short-term when making financial decisions. However, it is important to also think long-term to make progress towards important goals, such as retirement. Another way to define a Saver is someone who squirrels away money to meet their short-term and long-term financial goals.

So, have you been acting like a squirrel lately? Share your squirrel-like behaviors with your fellow Savers.

How do you define being a Saver?

Here’s what Michelle – a CPA and budding entrepreneur – had to say about our Question of the Month.

I’ve always had a healthy respect for money. Along with the usual little girl fantasies of princes and ponies, I dreamed of profits. I baked cookies and sold them around the neighborhood. I helped my parents with garage sales and received a percentage for my old toys. Now, decades later, at the age of 37, I’m living blissfully single and collecting a regular paycheck as an accountant for the government. Yet I often daydream about owning a business. Actually, I daydream about a lot of things, including becoming a super Saver. I would define a Saver as both who I am and who I want to be. To have a little fun while I explain myself, I built an acrostic with the word “Saver.”

A Saver…

Saves. It’s the most obvious requirement and the most important. I want to accumulate a 3-month emergency fund. I prefer to break the big savings goal into smaller pieces by focusing on accumulating one month at a time. I set up an automatic savings plan with my ING account to make things easier. Maybe I’ll even get to a 6-month emergency fund this way.

Anticipates. I once watched a documentary about increasing brain power. One of the factors of training the brain was to tap into its ability to anticipate actions. Great athletics do it all the time. And so do great Savers. They know to expect the unexpected and to have financial resources available to meet their needs.

Is Vigilant. I usually keep a watchful guard over my money. I paid off my credit cards. I bought a cute little house with an affordable mortgage. I take my lunch to work and clip coupons. But I’m not perfect. I used to enjoy getting “free” stuff by racking up reward points for purchases on my credit card. I thought I was fine because I could pay off the bill every month. Then I started noticing that my credit card bill was growing and my savings account was shrinking. Everything clicked when I heard a financial planner say that people tend to spend more when they use a credit card. Now I rarely use my credit card. Savers are knowledgeable about where their money goes and strive to limit its outflow.

Envisions. Not only do Savers anticipate the financial storms, but they also plan for the good things to come, like traveling to exotic locales, launching a side business or designing a comfortable retirement.

Rules. Remember that other golden rule: Whoever has the gold makes the rules. Savers get to make some rules. Living paycheck to paycheck is stressful and constrictive. Savers have more freedom to decide whether to fund a child’s education, donate money to a good cause or take a job that they love over a job that merely pays well.

We all have it in us to be Savers. I’m not a super Saver yet … but I will be.

We’ll leave major reform issues to the pundits, but here are some interesting proposed taxes that seem to have some teeth – and may give you more reason to keep your wallet snapped shut.

• Soda tax. Vending machine junkies, take notice. The theory is that by taxing the sugary drinks, the increased price would act as a deterrent, which would eventually help lower the obesity rate. And trips to the dentist.
• Consumption tax. Akin to a national sales tax (in addition to the state sales tax we currently pay), a flat rate would be applied to all purchases. This could add up to some serious beans. It’s been estimated that a 5% consumption tax could bring in a whopping $500 billion a year to the government.
• Online sales tax. It’s been a pleasant loophole that you can avoid paying sales tax on online purchases (unless the retailer has a physical presence in your state), but some think that loophole should be closed up. Especially those brick and mortar shop owners who lose out to the tax-free online retailers.

So what do you think, Saver? Would you be willing to pay any of these or are you more of the mindset that any tax is a bad tax? Tell us what you think.

Source: Time

How do you define being a Saver?

Here’s what Nick, a Chicago wine consultant with a penchant for talking about money, had to say about our Question of the Month.

Being a Saver doesn’t just mean opening a savings account and watching its value increase; being a Saver is a way of life. It goes beyond simply purchasing one less latte a week or only eating out on weekends.

My wife and I recently moved from a small-town Wisconsin to the big city of Chicago. We were moving toward better jobs and higher salaries, but our friends and family kept reminding us about how our living costs would increase. “A trip to the grocery store is going to cost twice as much there as it does here,” they told us. We began to take our spending into consideration and decided it was time to stop living by the seat of our pants. We began to budget not just our weekly “fun” money, but our entire lives.

My wife and I sat down, as many couples do, and wrote our budget. At the time, my wife was still looking for work and the budget was so tight that we could only allocate a measly $25 for savings each month. This seemed fine for the time being – we had already budgeted for all of our needs. What else did we need money for? Aren’t savings just for special occasions like a new car or a trip?

My wife found work shortly after arriving in Chicago. We decided to leave our budget how it was, but increase the amount we put into savings. Okay, maybe we added a few dollars to our “fun” tab, but we became more selective about how we used money.

Our budget was humming along nicely and our savings were increasing. We even set up a savings goal for a late summer trip. Everything was looking great, until February came. Taxes had to be paid, the dog needed her yearly immunizations, I had to visit the doctor and our car was towed. Ugh.

Because of the positive net cash flow we had built, we were able to afford these expenses. By not increasing our grocery, entertainment, restaurant or shopping budgets when my wife got her new job, we increased our cash flow into our checking account. This allowed us to pay off these unexpected bills without having to deplete all of our savings (we are still planning on taking that trip).

Being a Saver means financial peace of mind. It is more than growing a savings account. Budget surpluses and positive cash flow are just as important as your vacation fund. After all, how will you be able to relax by the beach if all you can think about is your empty wallet?

Well, maybe not. Think about it. It seems like you hit the jackpot, but really, are these free prizes actually free?

A spin of a wheel, a lucky guess or a drawing from a hat can make a person the proud owner of something they never dreamed of being able to afford. But Frugillionaire explains that even with the purchase price covered, these gifts can still cost the recipient some major moola. The cost to run and maintain a new boat, car, or even the cost to install new kitchen appliances can make some prizes a little less desirable. And any added prestige or pleasure a new McMansion or a lottery hit might actually get outweighed by not-so-lucky things like higher taxes, maintenance expenses and general headaches.

Moral of the story? Scoring some free loot may mean fees to boot.

We admit that it’d be pretty sweet to win gas or groceries for a year or maybe a contest that pays your bills for a few months. But most “free” things in life probably aren’t.

So tell us Saver, what’s the coolest thing you’ve ever won, only to find out that it’s still costing you today?

How do you define being a Saver?

Here’s what Ramona – a non-profit accountant and freelance writer who’s still paying off her ridiculously huge student loans – had to say about our Question of the Month.

This is how the day starts: wake up, shower (maybe), get dressed, make tea, not always in that order. The little things don’t change from day to day, if I can help it. No matter the details, I bet your morning routine has also been burned into your brain through repetition. Scientific studies are confirming that this is how our brains work: if we do something a number of times it becomes automatic, habitual.

A Saver is someone who saves money in the same way: out of habit.

Luckily, saving is a habit that you can teach to yourself. Every example in my life has told me I should spend my money now, while I’m alive to enjoy it. My (non)saving habits reflected that attitude throughout my 20s and I had the credit card debt to prove it. But I managed to turn into a Saver.

Becoming a Saver is easier than quitting smoking (great way to save money, by the way) and easier than starting to ride your bike to work (another great Saver trick). How do non-Savers become Savers? I reward myself by buying awesome things with some of my savings. But nothing helps like having a plan.

I managed to divide and conquer my finances like this:

1. Set up multiple bank accounts;
2. Name them and set particular restrictions, i.e. Bill Paying Account, Emergency Savings, Spending Money, Savings for a Life of Leisure;
3. Follow the rules for each account, i.e. Put the total amount for monthly bills in an account, automatically, every month and set up automatic bill payments. And never take money from Emergency Savings.

It took some work at first. Saving can be brutally slow. I had some fun flubs while adjusting the timing of automatic payments and savings deposits, based on when paychecks came in and when bills were due. Overcoming the urge to use my credit card when I don’t have cash in the bank is still a beast. But no matter how you pick up the habit, once you are a Saver, a Saver is what you will be for as long as you live.

And the longer you keep it up, the easier it becomes. I now resist frivolous spending so I have more money to save. It drives me crazy to use my savings to pay my credit card bill, but I do that before incurring interest, which is the opposite of saving. Saving more money and watching it grow is its own reward. Living within my means has turned into living the life I want to live – complete with exotic vacations.

How much does it irk you when your morning routine is disrupted? Automatic coffee machine failed to start automatically? Savers are people who get that irked feeling when something interrupts their saving habits, and then they become determined to save more.