Spenders and Savers: Building Financial Harmony as a Couple

Money can be a major source of stress, especially for couples with different spending habits. But fear not, spenders and savers can achieve financial harmony with open communication, compromise, and a team approach!

Communication is Key:

  • Talk openly about your goals: Dream vacations, a new house, or a comfortable retirement – discuss your individual goals and find common ground. These shared dreams will be the foundation of your financial plan. Remember, you’re a team, so work together! This builds a stronger foundation for your future.
  • Understand each other’s “why”: Instead of labels like “spender” or “saver,” have honest conversations about the reasons behind your financial behaviors. Explore any anxieties, hopes, or past experiences that shape your views on money. Sharing these creates context and fosters empathy.

Planning for Your Future:

  • Budgeting Together: Create a realistic budget that reflects your income, expenses, savings goals, and some fun money! Budgeting apps can simplify this process. Take time to find one that works for both of you – it’s an investment in your future, together.
  • Saving and Spending: Allocate specific amounts for both short- and long-term goals, like an emergency fund or retirement. Don’t forget to include fun – a vacation fund or a “splurge” category – ensuring both security and enjoyment. Consider separate accounts for different purposes if that helps with organization.
  • Set Spending Limits: If impulse buying is a concern, agree on spending limits for specific categories. Consider using cash for non-essential purchases – we tend to spend less with cash than cards!

Compromise and Flexibility:

  • Be Flexible: There will be times when adjustments are needed. Be open to compromise, finding solutions that work for both. Recognize that needs may differ, and adjustments might be temporary. After all, delayed gratification helps achieve bigger goals!
  • Celebrate Your Wins!: Acknowledge and celebrate progress towards your goals together. This keeps you motivated and strengthens your commitment to building a secure financial future.

Additional Tips:

  • Regular Check-Ins: Schedule regular reviews of your budget and goals. Treat it like an important meeting – even 20 minutes a week can make a difference!
  • Seek Help if Needed: If managing finances feels overwhelming, consider seeking guidance from a financial advisor or counselor (like Parachute!) They can provide personalized advice and help you create a sustainable plan.
  • Communication is Key: Throughout the process, maintain open and honest communication about finances. Remember, building a healthy financial relationship requires teamwork and understanding.

By following these tips and fostering a supportive environment, spender-saver couples can navigate financial challenges, achieve their goals, and build a bright future together.

If you’re dealing with high interest debt payments as well, see what you can save with Parachute’s Debt Management Plan https://parachutecreditcounseling.org/dmp-calculator/

Would you like to meet one-on-one with one of our Financial Counselors to talk specifically about your budget? Check out our Financial Coaching Session https://parachutecreditcounseling.org/services/credit-budget-counseling/#financial-coaching  or call 716-712-2060.

Top 10 Money Myths

There are a surprising number of myths surrounding money and how to manage it. These myths can hold people back from achieving financial wellness, which contributes to our overall well-being. Here are some of the most popular myths and the truths behind them:

Myth #1: More money = more happiness

Truth: While money can certainly provide security and comfort, research shows that beyond a certain point, it has little impact on happiness. True happiness comes from meaningful relationships, good health, and personal growth, not just the size of your bank account. Various studies show that most people feel most satisfied making about $75K+ worldwide. However, happiness is influenced by multiple factors beyond income. Strong relationships, meaningful work, good health, and personal growth all contribute to overall well-being. The “ideal” income for happiness may increase over time. Inflation and rising costs of living can shift the threshold for financial satisfaction.

Myth #2: You need a high income to build wealth

Truth: Building wealth is more about smart habits and financial discipline than having a high income. Living below your means, saving consistently, and investing wisely can help anyone build wealth over time, regardless of their income level.

Myth #3: All debt is bad

Truth: Not all debt is created equal. Good debt, like a mortgage or student loan, can be an investment in your future and help you achieve financial goals. Bad debt, like high-interest credit card debt, can drag you down and hinder your progress.

Myth #4: Investing is risky and only for the rich

Truth: Investing can be intimidating, but it doesn’t have to be risky or exclusive. There are many low-risk investment options available, and starting small and diversifying your portfolio can help mitigate risk. Anyone can benefit from the power of compound interest and grow their wealth through investing.

Myth #5: You should wait until retirement to save for retirement

Truth: The earlier you start saving for retirement, the better. Time is your best friend when it comes to compounding interest, so starting early even with small contributions can make a big difference in the long run. You may not be physically able to work in your later years and may need retirement income for 30+ years given overall life expectancies and your family history.

Myth #6: Budgeting is boring and restrictive

Truth: Budgeting can actually be empowering and freeing. It gives you control over your finances and allows you to make conscious choices about where your money goes. There are many budgeting methods available to find one that fits your lifestyle and preferences.

Myth #7: Talking about money is taboo

Truth: Open communication about finances is crucial for healthy relationships and financial well-being. Talking openly and honestly about money with partners, family, and friends can help you make informed decisions and support each other in your financial goals.

Myth #8: You need a perfect credit score.

Truth: While a good score is beneficial, it’s not everything. Building and maintaining good credit habits is more important than reaching a perfect score. Strong but not perfect scores can help you obtain more credit at lower interest rates.

Myth #9: Saving for a house is always the best investment.

Truth: Consider your needs, lifestyle preferences and goals. While homeownership can be rewarding, it also involves significant expenses and risks. Analyze other investment options as well before deciding to commit to a home.

Myth #10: You can always find “get rich quick” schemes.

Truth: Sustainable wealth building takes time and effort. Be wary of quick-fix solutions promising instant riches. Focus on consistent, responsible financial habits over the long term. Consistent habits over time have a large pay off. 

By debunking these myths and understanding the truth about money, you can make informed decisions and take charge of your financial future. Remember, financial well-being is a journey, not a destination. It’s about building healthy habits, making smart choices, and continuously learning and adapting.

If you’re dealing with high interest debt payments as well, see what you can save with Parachute’s Debt Management Plan https://parachutecreditcounseling.org/dmp-calculator/

Would you like to meet one-on-one with one of our Financial Counselors to talk specifically about your budget? Check out our Financial Coaching Session https://parachutecreditcounseling.org/services/credit-budget-counseling/#financial-coaching  or call 716-712-2060.

Financial Topics for Teens

If you are a teen or (have a teenager in your life), the following tips will be useful in establishing sound money practices early in life leading to stronger financial stability over time. 

Bank accounts and debit cards: Teens should learn how to open a bank account, deposit and withdraw money, and use a debit card. They should also read about and understand the fees associated with these services.

Budgeting: Teens can start learning to budget by tracking their income and expenses. This will help them see where their money is going and make sure they’re not spending more than they earn.

Saving: Teens should start saving early, even if it’s just a small amount each month. The more time saving, the more compounding interest has to work. There are many ways to save, such as putting money in a savings account, buying a savings bond, or investing in a mutual fund.

Credit: Teens should learn about establishing credit and how to use it responsibly. This includes understanding how to build a good credit score and how to avoid debt problems.

College planning: If they plan to pursue higher education, teens need to start thinking about college early, including how they will pay for it. They should research different financial aid options and start saving for college as soon as possible.

Getting a job: Teens can start earning money by getting a part-time job. This is a great way to learn about responsibility, money management and feel a sense of accomplishment.

Starting a business: Some teens are interested in starting their own businesses. This can be a great way to learn about entrepreneurship and make money. However, it’s important to do your research and create a business plan before getting started.

Investing: Teens can start investing early, even with a small amount of money. There are many different investment options available, such as stocks, bonds, and mutual funds. It’s important to talk to a financial advisor before investing to make sure you understand the risks involved.

There are many resources available to help teens learn about financial topics. They can talk to their parents, teachers, or a financial advisor. They can also find information online and in books and magazines.

Here are some additional tips for teens:

Talk to your parents. Your parents may be a great resource for learning about financial topics. They can teach you about their own experiences and help you make sound financial decisions.

Do your research. There is a lot of information available about financial topics. Take some time to read books, articles, listen to podcasts and search websites to learn as much as you can.

Start early. The earlier you start learning about financial topics, the better prepared you will be for the future.

Don’t be afraid to ask for help. If you have any questions about financial topics, don’t be afraid to ask your parents, other family members, teachers, or a financial advisor for help.

By learning about financial topics and making smart financial decisions early on, teens can set themselves up for financial success in the future.

If you’re dealing with high interest debt payments as well, see what you can save with Parachute’s Debt Management Plan https://parachutecreditcounseling.org/dmp-calculator/

Would you like to meet one-on-one with one of our Financial Counselors to talk specifically about your budget? Check out our Financial Coaching Session https://parachutecreditcounseling.org/services/credit-budget-counseling/#financial-coaching  or call 716-712-2060.

Using Credit Wisely

Credit cards can be a powerful financial tool when used responsibly. They offer a convenient way to make purchases, build credit history, and earn rewards. However, they can also lead to significant debt problems if not used carefully. Here are some credit card essentials to help you use your cards wisely:

Understand your credit limit: Your credit limit is the maximum amount you can borrow on your credit card. It’s important to stay within your credit limit to avoid paying high-interest fees. In fact, creditors want you to use no more than 30% of your available credit. This is known as credit utilization. Doing this helps you raise your credit score, which helps you get better terms (e.g., lower interest rates) for future borrowing.  

Make timely payments: Pay your credit card bill on time every month to avoid late fees and damage to your credit score. Aim to pay off your balance in full to avoid accruing interest charges whenever possible.

Pay more than the minimum payment: If you can’t pay off your balance in full each month, be sure to make more than the minimum payment. Double it, if possible.  This will help you pay off your debt faster and save you money on interest.

Beware of fees: Credit cards often have fees associated with them, such as annual fees, late fees, and foreign transaction fees. Read your credit card agreement carefully to understand all the fees involved before applying for it.

Utilize rewards programs: Many credit cards offer rewards programs, such as cash back, points, or travel miles. Choose a card that offers rewards that align with your spending habits. Some people focus more on the rewards over their responsible usage of their cards. Be careful to not get too preoccupied with the rewards over your reasonable usage of your card.

Secure your card: Protect your credit card from theft or fraud by keeping your PIN and CVV number confidential. Shred old paper statements and keep your card in a secure place when not in use.

Monitor your credit report: Regularly review your credit report for any errors or fraudulent activity. Dispute any inaccuracies promptly. Remember, the only government authorized website is annualcreditreport.com. You can now check your credit reports weekly for free.

Budget your spending: Create a realistic budget to track your income and expenses. Use your credit card only for purchases you can afford to pay off in full each month. You don’t want to treat credit like it is an added source of income. 

Avoid overspending: Don’t use your credit card to finance wants instead of needs. Stick to your budget and avoid impulse purchases that you cannot afford. Walk or look away from the item you want for at least 15 minutes and think about longer term, bigger financial goals you may have like a vacation, car or a house.

Consider a secured credit card: If you have a limited credit history or poor credit, consider a secured credit card. You’ll deposit a security deposit, which acts as your credit limit. Use the card responsibly to build your credit score.

Seek financial advice: If you have questions about credit cards or managing your finances, consult a credit counseling agency like Parachute for personalized guidance.

Remember, credit cards are a tool, not a source of income. Use them responsibly to maintain your financial well-being over time and to gain long term financial stability and avoid debt traps.

If you’re dealing with high interest debt payments as well, see what you can save with Parachute’s Debt Management Plan https://parachutecreditcounseling.org/dmp-calculator/

Would you like to meet one-on-one with one of our Financial Counselors to talk specifically about your budget? Check out our Financial Coaching Session https://parachutecreditcounseling.org/services/credit-budget-counseling/#financial-coaching  or call 716-712-2060.

Money and Relationships

Money can be a major source of stress and conflict in any relationship and often is quoted as the top reason for break-ups and divorces. Therefore, it is especially important to manage it carefully in romantic partnerships. Here are a few tips for managing money and relationships.

Communicate openly and honestly about your finances. This includes sharing your income, debts, and spending habits. It’s important to be upfront with each other about your spending habits and financial situation so that you can make decisions together and find ways to strengthen your financial future as a team. It can be uncomfortable and even embarrassing to share some aspects of our financial lives, but it will ultimately help empower you both to establish good money habits.   

Create a monthly spending plan (budget) and stick to it. This will help you track your income and expenses so that you can make sure you’re living within your means. There are many different budgeting methods available, so find one that works for you and your partner. You could even try a blend of methods to help you reach those goals! Sound spending plans are the foundation for establishing financial stability and wealth building.

Set financial goals together as a united front. Do you want to buy a house? Save for retirement? Pay off debt? Once you know what your goals are, you can start working towards them together and potentially reach them faster. Place the goals in writing somewhere you will both see them regularly (e.g., on a mirror or refrigerator, on your cell phones).

Don’t make major financial decisions without consulting your partner. This includes things like buying a car, taking out a loan, or making a large purchase. Talking about these decisions before you make them can help to avoid conflict later. Think about if your partner made a major financial decision without consulting you and how you might feel. Remember the team approach.

Be respectful of each other’s spending habits. Even if you don’t agree with how your partner spends their money, it’s important to be respectful of their choices. If you’re concerned about their spending, talk to them about it in a calm and constructive way that stays centered on your shared goals.   

Couple discussing money

Don’t let money problems come between you. If you’re having financial problems, it’s important to work together to solve them. Don’t blame each other or let your problems fester over time. Take action to address the issue before it gets bigger.

Seek professional help if you need it. If you’re struggling to manage your finances or communicate about money with your partner, a financial advisor, financial social worker, or a therapist can help.

Money can be a difficult and emotional topic to talk about as people most often feel a range of emotions such as fear and shame, but it’s important to have open and honest communication about your finances in order to maintain a healthy relationship. By following these tips, you can help to avoid conflict and build a strong financial foundation for your future together and also serve as an effective financial role model for your children.

If you’re dealing with high interest debt payments as well, see what you can save with Parachute’s Debt Management Plan https://parachutecreditcounseling.org/dmp-calculator/

Would you like to meet one-on-one with one of our Financial Counselors to talk specifically about your budget? Check out our Financial Coaching Session https://parachutecreditcounseling.org/services/credit-budget-counseling/#financial-coaching  or call 716-712-2060

15 Universal Truths About Money

Here are 15 universal truths about money. Recognizing them will help you better understand the role that money plays in your life and how to best handle money to achieve your financial goals and attain financial security.

  1. Money is a tool; a means to achieve your goals.
  2. You can’t outspend your income. No matter how much money you make, if you spend more than you earn, you will eventually go into debt.
  3. Saving money is important. It gives you a financial cushion in case of unexpected expenses, and it helps you reach your long-term goals.
  4. Investing your money is a smart way to grow your wealth over time. But it’s important to do your research, understand the risks involved and seek guidance from a professional you trust.
  5. Debt can be a burden. But it can also be a tool to help you achieve your goals. Just make sure you borrow responsibly and pay off your debt as quickly as possible.
  6. Your spending habits matter. The way you spend your money (your own money habits) can have a big impact on your financial future. Small amounts of savings grow to big amounts just like small expenses over time add up to large expenses.
  7. Comparing yourself to others is not helpful to your financial health. Everyone’s financial situation is different. Focus on your goals and make sure you are on track. Stay in your own lane!
  8. It’s never too late to start saving and investing. Even if you are starting late, it is never too late to make a difference.
  9. Get help if you need it. There are plenty of resources available to help you with your finances. Don’t be afraid to ask for help from agencies like Parachute!
  10. Money is not everything. It is important to have financial security, but it is also important to enjoy your life and live within your means.
  11. There will always be things that you want in the short term and cannot afford. It’s true for everyone!
  12. Financial success is influenced heavily by your behavior with money. Consistent patterns are powerful.
  13. Appearances are very deceiving. Just because someone looks like they have a lot of money, simply may mean they spent a lot of money and they be may be in significant debt.
  14. Having a lot of material possessions (stuff) is not the same as having financial security.
  15. Financial success involves what you earn, what you keep, what you grow (i.e., investments) and what you preserve.

These are just a few of the many truths about money. The most important thing is to learn about your finances and make smart decisions with your money. By doing so, you can achieve your financial goals!

If you’re dealing with high interest debt payments as well, see what you can save with Parachute’s Debt Management Plan https://parachutecreditcounseling.org/dmp-calculator/

Would you like to meet one-on-one with one of our Financial Counselors to talk specifically about your budget? Check out our Financial Coaching Session https://parachutecreditcounseling.org/services/credit-budget-counseling/#financial-coaching  or call 716-712-2060.