Monthly Archives: June 2016

Financial Tips for Newlyweds

Financial Tips for Newlyweds

Before you stand at the altar, it is important to know where you stand financially as a couple. You aren’t just joining together your hopes and dreams, but also combining your money habits, spending patterns and even past debt.As both the average marriage age and student debt loads rise, it is likely at least one partner will enter the marriage with significant debt. The average student loan debt is now more than $25,000, and the average credit card debt is almost $5,000 per borrower. These debts can cause significant stress on a new marriage. Revealing all debts early can ease the stress, and help the new couple start paying it down as soon as possible.

Getting married does not automatically make you responsible for debts incurred by your spouse before the marriage. Your partner’s debt will only show up on your credit history once you are added to the accounts. However, the debt will still affect you when it comes to your household’s income since there will be a lot less money to save, pay other bills or spend in ways that are much more enjoyable than debt payments.Here are 10 financial tips for newlyweds:

  • Compare spending habits.

Don’t assume your spouse shares your beliefs about money–the spending and saving habits may surprise you. Watch how they use money. A free spender before marriage will probably be a free spender after marriage.

  • Before the wedding, reveal everything in your financial closet.

Be honest about your income, debts, and money problems. Bring out your bank statements from the past twelve months to show what you did with your money. Discuss your strengths and weaknesses with money.

  • Each of you should get a copy of your credit reports from the three credit bureaus.

This will give you a clear picture of credit accounts, debts, and how creditors will judge you. Aim to get your scores over 750 to receive the lowest interest rates for your first mortgage and other loans.

  • If your partner has been married before, find out about their financial obligations to the ex-spouse and children.
  • Have a wedding and honeymoon you can pay off in a year.

The wedding of your dreams can become a nightmare if you are still paying interest on it years later.

  • Avoid credit card debt.

The best rule of thumb is simply, “if you can’t pay for something with cash, you can’t afford it.”

  • If you have a credit card balance, pay as much as you can above the minimum each month.

If you receive gift money, a bonus, a second job or a tax refund, use this to pay off your debt. You can even make micropayments multiple times during the month to pay off your balance faster. Eat a meal at home and immediately apply the money you saved to your credit card balance.

  • Before the first bills come in, decide who will pay them and when this will take place.

If you have separate accounts, know which account pays each bill. Also notify creditors of your name change and new address.

  • Reduce your debt-to-available credit ratio.

This will help improve your credit score. Your monthly debt, including your mortgage, should not exceed 35% of your gross income.

  • Each spouse should have a credit card in his or her own name to build an individual credit score.

Keep that card for a long time. Use the card for several purchases each month and pay the bill in full immediately. Building a long term payment history with one or two credit cards is an important factor in your credit score.



Painless Negotiating Tips

Painless Negotiating Tips

One of the most difficult parts of business is negotiating. It’s a skill that we develop from birth. That’s right! We come out of the womb with negotiating skills.

If you have any doubts, watch babies. Babies start their negotiation by screaming like some power-crazed corporate leader until they get what they want. Parents immediately start wondering whether the baby is hungry, wants to be held or has some other need, and they do whatever it takes to make their baby happy.As we get older, we negotiate with our parents over additional television time, presents, trips to the mall with our friends, allowance, baby-sitting fees and car time. Kids negotiate with friends for who gets to bat first in a baseball game, be the first to roll the dice in a board game or sleep on the top bunk at overnight camp.Once we become adults, we negotiate our employment agreements, apartment rent, business rent, bank loans, personal loans, car purchases, venture capital for new businesses and strategic partnerships. There is no end to the amount of negotiating we have to do throughout our life.To be a good negotiator, you have to do eight things:

1. Know your goal. You have to have an objective. It could be a 5% salary increase, 10% increase in what you want to charge a client or the percentage of a new business you must own when negotiating with investors.

2. Listen! So many people, when negotiating, are so busy thinking about what they are going to say and what they want that they don’t listen to the other side. They don’t listen to the words and how those words are used by the other side.

3. Keep your eyes open. Along with the need to be a good listener, you have to be good at observing who you are speaking with. Are they nervous, calm or distracted? Certain words or ways that you physically convey a sentence may make them react in a certain way. For example, if you sit with your arms crossed, the person on the other side may think you are holding back or not open to discussion.

4. Understand the other side. It’s essential to understand the objectives of the other side so you will understand what is important to them and what they might be willing to give up. For example, when I was negotiating my employment contract with my investors, I knew it was important that I give up my other business interests, but at the same time I knew they valued my contacts. I negotiated to keep my columns and work with various universities, which I enjoy.

5. Develop a case. Not all negotiations are built on logic, especially when you are dealing with an emotional issue like selling or buying a business from an entrepreneur or a family member. But developing good reasons for why you want something can increase your chances of getting what you want.

6. Stay dispassionate. Never lose your head and become emotional. It’s good to stay detached and objective. Passion is great for building a great business or a solid relationship, but not when you are negotiating — emotion can cause you to make a mistake.

7. Be ready to walk away. One of the best negotiators I ever met was Ira Lubert, the founder of Lubert Adler, a multibillion-dollar real estate and venture capital company. Ira started out by buying trailers for students to live at Penn State when he was an undergraduate and over time built an empire. I never forgot my first meeting with Ira in his office in 1987. He told me after a phone call that you have to be able to walk away from a deal if it doesn’t make business or strategic sense.

8. Work toward a win-win. Finally, a negotiation where the other side feels that they lost is not a successful negotiation. Leaving something on the table for the other side will build relationships. Life goes in circles, and when the other side has the upper hand someday, you’ll want them to be fair.

Tips for Lifelong Saving

Tips for Lifelong Saving


  • Pay yourself first Teenagers get money for birthdays, allowance and jobs. Learn early to “pay yourself first” and put some money into a savings or investment account. This is one of the best habits you can develop. Stick to this and you will be surprised how even small sums of money can grow. You can even collect loose change and add to this; every little bit adds up.
  • Make a budget If you don’t keep track of your spending, you will not understand where your money goes. Keep a list of every expense, no matter how small. This will make you think twice about the importance of each purchase.

Young adults

  • Save money If you are single or married without kids, this is the least expensive time of your life. You finally have control of your own money, and it may even feel like a lot. You can spend it all on clothes, cars, furniture and entertainment, or you can spend smartly and save for the future. You may have just graduated from school, but this is best time to plan for retirement. Maximize your retirement accounts, because even though the stock market is volatile, time and compounding growth are on your side.
  • Build up your credit score Test scores are behind you and now is the time to focus on your credit score. This score is more important than any exam because it is how lenders judge you. Your credit score affects the terms and interest rates for all loans — credit card, mortgage and auto. The higher your credit score, the lower your interest rates, resulting in more money you can keep.

Your payment history and how you handle money is so important that employers may even look at your credit report during the interview process to help screen applicants who may be unreliable or a risk of theft.


  • Full disclosure of debt and financial obligations Tell your partner before the wedding about all of your debt. It is not fair to wait until the first bills come in. Make a list of all student loans, car loans, credit card debt, even loans to friends and parents. Get copies of credit reports to verify all open accounts. One or both of you may enter the partnership with debt, and debt payments drain away money you could be saving to help you reach financial goals. If either partner has problems with credit, your rental or mortgage pplication may be denied, or you may have to pay more money on loans with higher rates.
  • Joint or individual bank accounts Will you have one bank account for all income and expenses, or will you start with three accounts — yours, mine and ours? A joint account is easier to manage and will prevent some disagreements over dividing bills, but decisions need to be shared. It gives each partner some control over their own spending. Couples tend to gravitate toward joint accounts once they add children and major expenses; if you choose to have separate accounts, develop a plan outlining which account pays each bill before the first bills arrive.


  • Save for college The best time to begin saving for you kids’ college is the day you bring the baby home. There are college savings plans with tax benefits. Look at state-sponsored 529 plans and educational savings accounts.
  • Inheritance and windfalls You may get money from a home sale, inheritance or insurance payment. This is a great chance to pay off high-interest debt, such as from credit cards or auto loans. It is also a good time to fully fund an emergency fund (six months of household income) and put more money into your retirement account.
  • Teach children about finances You can set a good example for your children on saving, spending wisely and charitable giving. It is easier for them to understand when they watch you do it. Take them shopping with you and show them how to compare prices and find good deals. Let them see you put something back because it cost too much.

Open a bank account for them and let them make deposits into their own account. Show them the interest and balance growing on their monthly statement. Give them an allowance and let them make their own decisions about this money. Let them save and pay for the toys and games they really want. This also gives them a chance to make mistakes with money and experience the emotions and understanding that once money is spent, it is gone.

Preparing for retirement

  • Max out your retirement savings You may still be paying for your children’s college education, but it is just as important that you save all you can for your retirement. If you retire at 65, will your retirement savings sustain you for 20 years or more? It is a good idea to save 10% to 20% of your annual income for retirement. Max out your employer’s retirement plans and your individual retirement accounts.
  • Pay off your debt It is easier to pay off credit card and other debt now, while you have income. Start with the card with the highest interest rate and pay as much as you can above the minimum balance. You can even skip dinner at a restaurant and immediately log in to your account to apply that money to your credit card.
  • Have a plan to make your savings last Today, seniors have a longer life and their retirement savings has to last longer. This may difficult if your investments are still recovering from the recent financial turmoil. Developing a plan and a budget may require the help of a financial adviser. The FDIC provides some good information on how to help your money last after your final paycheck.

Tips to Prioritize Your Student Loan Payments

Tips to Prioritize Your Student Loan Payments

Years later when people are moving to the more “balanced” stage of their lives, their 30s, loan repayments still are not always top of mind. When you have a robust social life, savings goals, vacation plans, rent payments and a bad Seamless orUber habit, it’s easy to forget that student loan payments should remain a financial priority.

As someone who has learned the hard way but managed to turn it around, below are five tips to help you stay on track when paying back your college debt.

1. Research the Best 401(k) Option for You

Upon landing your first job, there are a lot financial decisions to be made, including signing up for medical insurance through your employer and joining your company’s 401(k) program. Depending on your situation — your total loan balance, monthly payment, and overall income and expenses — it may make sense to hold off contributing to your 401(k). This choice isn’t for everyone as it depends on a variety of factors.

For example, it depends on your tax bracket. If you invest in your 401(k), you can often lower your tax bracket. In addition, if your employer offers a matching contribution, it may make sense to invest in your 401(k), otherwise you’re throwing away free money.

Alternatively, you may want to ask your employer if they are willing to contribute to your student loan payments in replacement of a 401(k) contribution. It’s important to evaluate whether your investments earn more than your debt. However, if you’re really strapped for cash, putting that money towards your monthly student loan payment can help provide a bit of financial wiggle room and help pay off that debt quicker.

Whatever your situation, it’s important to consult your financial advisor before making this decision.

2. Don’t Fear the “B-Word”

A lot of recent college graduates flinch when they hear the word “budget,” but creating a budget to help you manage your finances is the opposite of scary.

It’s easy to push important financial obligations to the back of your head when you’re first out of school. According to research from Student Loan Hero (where I am CEO), a quarter of Americans would prefer to pay for Netflix than student loans, and 23% would prioritize social activities.

Outlining a budget that not only accounts for your bills and loan payments, but social activities such as movies, concerts, and going out to eat with friends, can help make sure you’re still paying down your debt each month. With great free services like Moven, Mint and Digit out there that help you to do this automatically by tracking spending, creating a budget has never been easier.

3. Focus on Making the Right Decisions on “The Big Stuff”

There are many large expenses that are often on the horizon as you move through your 20s and beyond. From marriage, to real estate, to starting a family, these are all big financial undertakings. In order to really make these big financial decisions a priority, try to cut out the small, frivolous purchases and focus on the big-ticket items. Saving for a down payment on a home is obviously more financially important than spending $6 a day at Starbucks.

Typical housing expenses (rent, utilities etc.) should never account for more than 35% of your monthly income, according to financial expert Jean Chatzky. If you’re paying more than this, you may want to consider making a change. If you live alone, consider getting a roommate to cut your rent in half or even Airbnb your room when you are out of town. Though it may be easier said than done, it may also be worth thinking about moving, whether it is to a smaller apartment, or even another city.

If you’re living in an expensive area, like New York City, for example, think about how your expenses may decrease if you change locations. I personally did this and left New York for Austin so I could focus more on my student loan repayments. This, of course, is all dependent on work and your personal flexibility. It could, however, be a huge factor in helping to prioritize your student loan repayments.

In addition, it makes sense not to get in over your head. If you are saving for a down payment on a home it makes more sense to purchase one that is in your price range rather than purchasing a home that has a mortgage payment that will cause you to drown financially. This means, don’t buy the most expensive home or product. If you’re looking for a new car, it’s best to purchase a used vehicle instead of that new BMW.

Prioritizing the most important financial decisions is a key to staying on track with your budget and loan repayments.

4. Keep Saving

It’s tempting to take extra money you may have each month and put it towards something else — whether it’s for something fun like a weekend away or something more responsible, like continuing to paying down your loan balance. However, it’s important not to forget to contribute to your savings account or emergency fund.

Most Americans cannot even afford a $400 emergency fund. According to Dave Ramsey — the first step toward paying off consumer debt is building a $1000 safety net. Other experts recommend saving 5%-to-10% of your net income.

Next, focus on paying off any consumer debt — credit cards and student loans. Following that, save a few months of expenses up, just in case. There are even tools that can help you do this. For example, Acorns, an app that takes pennies off your purchases and rolls them into an investment account that’s easily liquidated. Having these emergency pockets of money set up can ultimately ensure you don’t miss a loan payment due to an unexpected emergency.

5. Pick a Student Loan Repayment Plan

In order to prioritize paying down your student debt, payments must remain a top priority. Utilizing strategies such as the “debt avalanche” strategy — where borrowers pay off their most high interest loan first, allowing them to potentially save thousands of dollars on interest — or the “debt snowball” strategy that is known as the most psychologically rewarding strategy by paying off the smallest principle loans first. Whichever plan is right for you, pick one and stick with it.

You’ll feel a sense of gratification as you continue to see your total loan balance decrease. Beyond that, it may be worth considering refinancing or consolidating your student loans. Companies like Common Bond, SoFi and Earnest all have options to help refinance, if it is the right decision for you.