If you haven’t yet thought about having the money talk with your partner, you’re not alone. At this point, money is almost seen as more taboo than sex, politics, or religion. However, it’s no secret that money leads to a lot of heartbreak in relationships. With close to 90% of divorces stemming from money issues or financial infidelity, learning how to talk about finances with your partner, especially early on, is key to the success and longevity of your relationship. From our experience giving financial consultations with couples, we’ve learned that many couples wait to discuss money until they’re about to make a joint financial decision, but we would strongly urge you to have these conversations sooner rather than later. The reason? Imagine this: You’re going to buy a car or a home with your significant other. The lender pulls your credit reports. And that’s when you find out your better half has a credit score of like, 2. (Ever-so-slight exaggeration on the score, but you get the point: that is not the moment you want to find out about your partner’s shoddy credit history.) Or maybe you’re in honeymoon bliss after the wedding and then find out your new partner actually has a huge student loan to pay off or has maxed out his/her credit cards. While this debt may not be your responsibility per se, it will affect the life plans that you may or may not have been diligently keeping in your journal since age 7. Talk about a buzzkill.
So, hopefully, we’ve convinced you that having the money talk is one of the most important (and ongoing) conversations you’ll have with a partner, but now, where to start? Every couple is different, especially because money is a deeply personal and sensitive topic. While there is no one-size-fits-all approach, we’re both in long-term relationships (6+ years) and have been able to navigate the topic successfully so far. Basically, we kind of know what we’re talking about.
The timeline we both followed for our relationships may be a little different for you and your partner, especially based on when you plan to move in together and make joint financial decisions, but this will give you a general overview and questions to consider.
0-6 Months (Or Newly Dating)
Every relationship moves at a different pace, but for both of us, the first six months of our relationships were just about having fun. We didn’t get into the nitty-gritty, like exchanging credit scores or bank balances (chill out, Meredith Blake), but being attentive to details during these beginning stages can tell you a lot about how a person manages money. None of these observations are inherently good or bad, but picking up on habits and behaviors can tell you a lot about a person’s relationship with money without doing a whole interrogation-style line of questioning. Some things to pay attention to:
☆ Does your partner ball out on payday and then live on Top Ramen for the rest of the month?
☆ Does your partner pay for everything with cash or credit cards?
☆ Does your partner say “yes” to every invite, trip, or activity, or do they decline occasionally to focus on other goals?
☆ Does your partner buy a new outfit for every event?
At the beginning of her relationship, Lauren asked her partner a ton of questions about every aspect of his life. Sounds a little intense, but, evidently, it didn’t scare him off. When it came to money, by asking questions about what his childhood was like, what his high school/college jobs were, what scared him about the future, etc., she learned a lot about his approach to money before they had any “official” conversations.
At the beginning of a relationship, you should definitely focus on having fun and getting to know someone, but you can still learn about their approach to money just by paying a little attention.
6 Months-2 Years (Getting Serious)
Around this time, we both started to open up a little more about specifics with our finances. For instance, if you read our previous articles, you’d know we both love to travel, and it was important for us to have partners who enjoyed doing so as well. About a year into their relationship, Lauren and her partner were planning their first international trip as a couple. Lauren’s partner was stressed about booking because he’d been been feeling stretched thin with always agreeing to go to all of the happy hours, dinners, etc. that she wanted to do. This led to them both breaking down and sharing their budgets to figure out what they could each afford to do and how to allocate funds.
This also ties into one of our most important money principles: spend freely on the 2-3 categories that you value most, and cut costs as much as possible on the things that you don’t. This is important in your relationship as well as your personal spending. By sharing our entire budgets with our partners, we learned more specifics, such as each other’s incomes and how much we were paying for student loans, but more importantly, we learned more about what the other person valued spending money on. Learning this helped us cut costs in other areas—like, while we wanted to try all the best happy hour spots in Seattle, our partners didn’t prioritize that. So we learned to start cooking at home with our partners to get that quality time, and Lauren and I still hit up all the happy hours…without the guys.
3 Years (Or Before You Move In Together)
We each moved in with our partners three years into our relationships. We’ve always believed that moving in together should never be about convenience, saving money, or anything other than wanting to start a life together. So, before we each moved in with our S.O.s, we wanted to lay everything about our financial health out on the table.
We made sure that our partners were comfortable with this, then we set a date and made sure to have a great bottle of wine ready to go. Trust us, the money talk can be uncomfortable at first, so you’ll want to make it as fun and relaxing as possible.
During these conversations, we kept track of EVERYTHING that the other person could possibly ask about finances.
Credit Score: If you need a great place to find this information, Credit Karma is our go-to. Many people confuse a credit score with a credit report. You can check your credit score for free and as often as you like, without impacting your score. A credit report is what you can only check for free once a year. If you want to know more about the difference between the two, check out this Hello HENRYs post.
Salary: Obviously, your annual income. This is also a great place to list any bonuses or additional incentives that are part of your total compensation.
Assets: This is where we listed all of our accounts and the balances in each. Checking accounts, savings accounts, 401(k), investments, real estate, etc. Anything that has a value and that you personally own. It’s helpful to break down each asset, as well as include a total. That way you can understand how your partner’s assets are allocated.
Seeing the breakdown can help you to have important conversations, such as whether he/she is risk-averse versus opposed to investing, if they have been saving for retirement, etc. Then you can come up with an approach together.
Debts: In this section, we listed any money that we owed to someone else. Student loans, car loans, medical bills, all credit cards (plus the balance on each). Even if the balance is zero, it’s still helpful to know how many cards your partner has and their overall history on each. For example, you may just have one credit card for emergencies, while your partner is the type to open a new account just to save $10 at Pottery Barn. Again, no judgment on either—it’s just important to understand how you both differ in your approach to credit.
Net Worth: This number is determined by subtracting your total debts from your total assets. Ideally, this number should be positive. If not, you should understand why and be actively working to increase it every month. Net worth is the single most important indicator of your financial health and well-being. So many people assume a person’s income is the most important predictor of their financial future, but this is not the case. Let’s say your partner is making $250K a year but has a negative net worth. There may be valid reasons for the difference; maybe your partner has student loans that resulted in a higher-paying job but will take some time to pay off and get out of the negative, whereas you have no student loans. However, if your partner is simply spending more than they make, you may need to have a bigger conversation about how you can get on the same page and not live beyond your means.
4 Years + Beyond
A year after moving in together, Zach and Lauren bought their first home and have continued to have open, honest conversations about money. They have a finance “meeting” on the calendar every three months, which may seem intense for some, but for them, it has prevented many disagreements about money. During these meetings, they continue updating the same spreadsheet that they used before they moved in together with all of their debts, assets, etc. It’s been really cool to have a log to see how far they have come with their finances over the past two years.
Even if you aren’t in a serious relationship, we would strongly suggest keeping a similar spreadsheet for yourself to track your progress and to easily see which areas you want to focus on!
And that’s pretty much everything you need to know about how to have the money talk with your partner, no matter what stage your relationship is in. The important thing is, once you’ve started the conversation, it’s never truly over. Continue to have honest and open communication to avoid any surprises later on.
Images: Kelly Sikkema / Unsplash, Giphy (4)
Welcome to WTFunds, where we do what nobody else does and… actually talk about money. Ever scrolled through your Instagram feed, wondering how your friends are affording their lifestyles when they’re making the same amount of money as you and you can barely rub two dimes together? Read on, because we’ll be talking to real people to break down how much things cost, and how they’re paying for it.
When it comes to money, people of all generations throw around catchphrases and adages like coupons at Macy’s without ever actually knowing if they’re true. People spend their whole lives soaking in all of these finance tips and philosophies, only to hit their twenties and have a total WTF moment because these tips are either completely untrue or are no longer suitable for the lives millennials lead. Mainstream media and older generations love to make jokes about avocado toast being the cause of our financial woes without actually acknowledging how different life is for young people today—riddled with student loan debt, an insane housing market, the list goes on.
We’re Lauren and Kelda, millennial sisters (and avocado toast lovers) living in Seattle, WA. After entering the real world ourselves and watching so many peers come to view money as a subject to be feared and overwhelmed by, we felt compelled to make finance an approachable and exciting topic, not only for our friends, but for all millennials. Instead of focusing on small actions like skipping your morning latte, we want our peers to understand the big deals—compound interest, credit scores, the power of investing—the needle-moving and life-changing concepts. While between the two of us, we do have a background in corporate finance, we truly believe that anyone can master their personal finances and that, no, you don’t need to be “good at math” to do so. Together we run Hello HENRYs, a blog on all things personal finance. Kelly Kapoor may be the business bitch, but we’re the finance bitches, betches.
Outside of bottomless brunches, Real Housewives marathons, and overpriced skincare, engaging in healthy debate (aka proving people wrong) just may be one of our favorite pastimes. There is no topic that makes this more true than money. Today, we’re sharing five of the most common finance myths and why they are actually so false.
1. All Debt Is Equally Bad
Did anyone else grow up hearing about debt as terrible, scary, or dumb? But then you were accepted to college and immediately encouraged to take out thousands of dollars in loans as the first “adult” decision of your life? Ironic, huh? The thing is, though, this happens all the time, and the reality is that the majority of millennials do have some kind of student loan debt. In and of itself, debt is obviously money that you spent without actually having, so in theory, it is never amazing. However, it’s super important to differentiate between kinds of debt.
Debt that is used to better your life can actually be seen as an investment that will help improve your financial health; and while yes, a trip to Bali 100% would better our lives, that’s not what we’re talking about here. Debt such as a mortgage or a student loan will (hopefully) give you a return on that initial debt investment. Provided that you are only taking out the exact amount that you truly need, receive a low (5% or lower) interest rate, and can afford the monthly payment, these debts are typically worth it and better your financial health.
Credit card debt, or a car loan for a new Range Rover (when your budget is more 2007 Toyota Camry), on the other hand, is not only hard to get out of, but is also not something that is usually an investment in your future and will cause your credit score to take a hit.
When evaluating your debt, always prioritize getting out of the “bad” debt and paying off the debt with the highest interest rate first.
2. Credit Cards Are For Emergencies Only
Okay, talk about scary. This kind of thinking is exactly why so much of the country is in severe credit card debt. Saying credit cards are only for emergencies or big (aka expensive) purchases, implies that credit cards should be used only when you don’t have the funds to cover the purchase yourself. Uh…what?
On the contrary, credit cards should only be used when you DO have the money to cover the purchase. Literally nobody should be judging you for using a credit card to buy your weekly groceries or morning Starbucks—which has happened to us, by the way. This judgment comes because people assume that if you’re using a credit card, it means you can’t afford it. Again, the exact opposite of when and why you should use a credit card.
As long as you can pay your balance in full each month, credit cards can be an amazing tool to earn rewards on money you are already spending. They can also provide travel/purchase protection and protection against fraudulent charges, and help you build credit, earn points for free travel, and a myriad of other amazing benefits. We use our credit cards for literally every single purchase that can be made using them. Obviously, we aren’t going to force anyone into using a credit card, but we are going to be extra bossy about ensuring that you use them only when you have the funds to immediately pay them off. And also a PSA: stop judging other people’s financial lives when you, very likely, don’t know anything about them.
3. Monthly Rent Payments Are A Good Indicator Of The Mortgage Payment That You Can Afford
When Lauren bought her first home last year, this was a huge learning moment. For so long, we had heard “If you can afford $X in rent, that same amount could easily be your mortgage payment!” Not true. Owning a home comes with SO many additional monthly payments that are not part of the equation when you’re renting. Property taxes, home insurance, HOA dues, PMI (insurance charge if you put down less than 20%—which is extremely common for first-time home buyers). All of these additional fees can easily add up to hundreds of dollars a month in payments. In actuality, if you want your housing payment to stay the same from renting to buying, you’ll need to look for a home with a mortgage payment significantly less than your current rent payment.
Also, part B to this equation: Whoever said buying is always smarter than renting was so false. Buying a home can be a smart investment in your financial future, but it isn’t always. If you’re renting and making other key investing decisions, you can be equally as set up for success in your future, while also not having to deal with the nightmare of needing a new roof or water heater.
4. You Can’t Afford to Invest Until You Have No Debt
Actually—you can’t afford not to. Some financial advisors actually tell you not to invest until you have no debt…which, if you have student loans, would mean you aren’t making any investments until you’re probably in your early thirties, at least. Yikes! There is a super mathematical and logical way to look at this, and it’s called the interest rate. You want to throw your extra funds at the highest interest rate. If your student loan has the average 3.5% interest rate, but you could be earning 8-10% in an investment or retirement account, you’re effectively losing money by choosing to pay extra on your student loans. Obviously, you always want to make the minimum payments on all of your accounts each month, but after that, your priority for your extra funds should be to the option with the highest interest rate. If you have credit card debt, this will likely always win out.
While we’re on the topic of interest rates, another PSA, your hard earned savings and emergency funds should not be sitting in a traditional, low interest savings account at a brick and mortar bank. If you aren’t earning a minimum of 1.8% or higher on your savings account, you’re doing it wrong and leaving money on the table.
5. Closing Old Credit Cards Will Boost Your Credit Score
Credit scores are something people talk a lot about, but usually have no idea what actually goes into them. There is literally no mystery about them, though. Remember back in college when the professor laid out the syllabus and what percent each category was worth? I don’t know about you, but, as soon as we saw “Attendance” listed at just 5%, we basically gave ourselves a free pass to have a little too much fun on Thursday nights and miss every Friday morning lecture. I mean, at just 5%, we could still come out with an A. Credit scores are pretty much the same.
FICO literally lays out the five factors that go into earning a perfect credit score and how heavily each factor is weighted. Closing old credit cards hurts two of the five factors: credit utilization rate (30% of your score) and length of credit history (15% of your score). Closing old credit cards could impact almost half of what goes into your credit score. Not a decision to be made lightly.
Credit utilization rate refers to the amount of credit you are using as a percent of what you have available. Let’s say you have two credit cards. Credit card A has a $5,000 balance with an $8,000 limit. Credit card B has a $1,000 balance with a $20,000 limit. Currently, you are using $6,000 of credit out of $28,000 available—just 21% and below the max target of 30%. Let’s say you decide to close card B (after paying it off) because you barely use it. Your balance dropped to $5,000, but your available credit also dropped to $8,000! That puts your new utilization rate is 63%—not good!
In addition, while credit history is a smaller factor of your score at just 15%, this is a challenging one for millennials to score highly on because we don’t have time on our side. If you decide to close your old college credit card because you don’t use it much anymore, you’re literally closing one of your longest chapters of credit history—also not good.
Obviously, there are some exceptions to this rule—if closing one card would not drastically affect your utilization rate, you have accounts with longer/better history, a card has a steep annual fee that you aren’t getting enough benefit out of, etc. The point is, though, closing a card can have serious consequences on your credit score and is not a decision that you want to make lightly.
There you have it: five of the most commonly thrown around financial myths proven wrong. Talking money is never that fun or glamorous, but the most important thing is to nail the big picture ideas. By doing so, we promise that you can achieve your financial goals, like saving for retirement or buying a home, while still going to Soulcycle, happy hour, or whatever it is that enriches your life and brings you joy! Even with student loans and a less than six figure salary. We are living proof.
Images: Sharon McCutcheon / Unsplash; Giphy (3); whenshappyhr (2) / Instagram
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Its August 13th, you’re exactly 67 days out from your wedding. Ashley from Bachelor in Paradise just got married. Her tablescapes are to die for. You call your florist and irrationally drop an additional $2,000 you don’t have. Your fiancé is pissed, you’re also low key pissed at yourself but hey it’s your wedding and you’ll splurge if you want to. Source: @weddingwire 2019 Newlywed Report * couples could choose more than one option
Interviewer: Why do you want to work here?
Me: Because I have 10 friends getting married this year and that shit ain’t cheap.
— betchesbrides (@betchesbrides) July 30, 2019
Images: Orlova Maria / Unsplash; betchesbrides / Instagram; betchesbrides / Twitter; Giphy
If you’re anything like me—aka not a Kardashian but vaguely aspiring to live like one—then I imagine you’ve considered the idea of a sugar daddy. Don’t lie. No matter how “moral” you are, the idea of being handed five-figure checks while being asked to make zero spreadsheets on Excel is an appealing prospect. Of course, men have figured out how to ruin even this arrangement. Last week, the New York Times broke a story on a fake sugar daddy who scammed three women out of thousands of dollars. While scammer stories usually fill me with criminal aspirations glee, this one frankly just makes me sick. Read on for how your retirement plan these girls’ quest for extra cash became a horrifying nightmare.
Last spring, Chandler Fowles, 25, met a man on SeekingArrangement.com. In case your sugar daddy interest has never progressed to this point, SeekingArrangement is the website where prospective “sugar daddies” and “sugar babies” make profiles and make plans to meet up. The man Fowles matched with said he was an investment banker at Bain, and “offered her a ‘generous’ weekly allowance.” The man, who first went by “Jay,” and then “Ron,” proposed the following meetup with Fowles and a female friend. He offered $2,500 “for sex and to cover the cost of a hotel room.” Fowles was instructed to cover initial costs herself—including dolling herself and a friend up with a “smoky eye and nude lip,” per his preference. At the hotel, “Ron” walked her through setting up a PayPal account and submitting a request. After leaving the hotel, she saw that the request had never been completed.
Some time later, Fowles’ friend saw “Ron” on Tinder—and this is where sh*t gets crazy. Fowles and her friend came up with a plan to reveal his identity. Fowles’ friend arranged a date with “Ron” at a bar, and the bartender agreed to take down his name and credit card information when “Ron” bought a drink. (Sidenote: where can I find bartenders this loyal?? Or friends this loyal, for that matter?) Fowles’ friend, who sounds like a badass, texted “Ron” while he waited at the bar: “I’m anxious. Get me a prosecco so I can have a drink right away.” Frankly, I hope she conducts all first dates like this even if she’s not trying to pull off some surveillance sh*t. The bartender took his information, and Fowles and her friend got to Googling.
As we all know, there’s nothing a woman scorned scammed out of thousands and tricked into sex can’t find on the internet. They were quickly able to find out that “Ron” was actually a former City Hall employee and a current student at an NYU program. In other words, definitely not an investment banker. When the Times reached out to him for comment on the initial story, he said he didn’t remember “the details,” or “a promise of payment.” He added that his SeekingArrangement profile was purely done as a “good way to meet women for non-transactional hookups.” Yes, because the Tinder bio line “swipe right if looking to be spoiled,” which he used, really targets the financially self-sufficient ones.
Honestly, I’d make more jokes about how bad this man is at even trying to hide his intentions, but that would be holding an NYU student to higher standards than our president. Like so many men in this day and age, this guy is a sh*tty person who does sh*tty things and a sh*tty job pretending otherwise. End of story.
But wait! It’s not the end of the story at all. When the Times ran the initial story about Fowles, two other women contacted them within a day of publication. Both of these women had been scammed by the same guy, with eerily similar details. “I don’t know if telling you this will bring any justice to this situation or make it at all possible for someone to press charges against him,” one woman wrote in, “but I had to write to you and tell you that this is true.” While I’m always sad when a woman is forced to make a statement that hopeless, I’m at least grateful that this time it’s not to the Senate Judiciary Committee.
The second woman who spoke to the Times was a foreign student whose native country had gone into financial default. Without parental support, and unable to qualify for a work visa rather than a student visa, she was facing $5,000 of debt and eviction notices. When she met “Ron,” she denied his creepy requests for specific hair and makeup looks, but was still scammed out of $500 covering a hotel room fee. She also consented to a sexual encounter after seeing a falsified statement detailing payments of $1,700 to her account. For weeks, she called him begging him to pay her back. He never replied.
The man has now been identified as Imran U. Khan, 36, a Brooklyn resident working toward a master’s degree. He has since been banned from SeekingArrangement, and the support team is tracking all known IP addresses he used. Will that stop this guy from doing the same thing through other platforms? I wouldn’t bet on it. Does this whole story make me want to sob into my hands and throw my laptop through a window? Yes, it really, really does.
As a final few thoughts here, I’d like to welcome anyone who’s looking to go into the comments and shame the whole Sugar Daddy thing to just kindly close their browser window instead. You may have noticed that I treat scamming like a hilarious romp when women do it, and you may find that hypocritical. But I do find female scammers funnier and more thrilling, because the patriarchy is real and women are f*cked out of power and earning potential all the goddamn time. So while I know nothing about Khan’s situation specifically, it makes me unspeakably sad that the women in this story were already financially struggling, opted for a situation that they admittedly found less than ideal, and were hurt even further. So, let’s please attack the system that places so many young women in desperate situations, not the tactics they choose to get out of it.
Images: Giphy (3), Mikail Duran/Unsplash
It’s been a couple years since Iggy Azalea was anywhere close to the top of the charts, and it looks like she’s been living a little too, um, fancy. According to documents obtained by TMZ, Iggy has a $300,000 unpaid balance with American Express, so like yikes.
In the court documents, it says that Iggy has a preset limit of $50k, which means she spent an extra quarter million dollars, then just decided not to pay any of it. Which kind of seems like a setup, if you ask me—like, why even have a limit if the credit card company lets you go six times over that? Or so I ask my
mom accountant every month.
So does this mean Iggy is, like, poor? Not necessarily. She might just be shitty at getting bills paid on time, which like, same. Or maybe she doesn’t really understand how a credit card works? Because also like, same. Being an adult is hard, and maybe Iggy just isn’t on top of her shit.
Or maybe she’s broke. Since her big breakout in 2014, she’s struggled to recreate her initial success, and two new singles that she put out this spring failed to chart in the US at all. She hasn’t toured in like, three years, so it’s not crazy to think that her funds might be running a bit low. She probably spent a little too much on butt injections, which is a classic mistake that many girls make.
So is this the end of Iggy Azalea? Tbh, she’s been over for a couple years now, but things aren’t looking good. AmEx wants the whole 300k covered, plus their legal expenses, so things could get ugly.
We all remember the days when half the fun of a sleepover was piling into a car and forcing your parents to drag you to a local Blockbuster so you could
walk down the sexy movie aisle and scandalize yourself pick out a family-friendly film to watch over some butter popcorn. Sadly, Blockbuster went bankrupt because the internet happened and people stopped leaving the house. Now Netflix is the name of the game, and it will be here forever, with parents passing their precious accounts down from generation to generation until the Sun explodes and we all turn to dust….or will it?!? According to a report in the LA Times, despite the fact that Netflix is literally a staple of modern life—it’s not “HBOGO and Chill,” after all—Netflix is apparently in a spot of trouble. And by “a spot of trouble,” I mean “$20 billion in debt.” Fuck. How could this happen? Literally, how the fuck could this happen? I did not go on 50+ Bumble Dates where some bro told me I “have to” watch Stranger Things for Netflix to be $20 billion in debt. I have been paying them $7.99 per/month since before I’d ever tried alcohol. What gives?
**Briefly considers buying own Netflix account**
**chokes on laughter**
Netflix has over 104 million subscribers worldwide, and its content accounts for more than a third of all prime-time download Internet traffic in North America. It has over 50 original shows and has gotten 91 Emmy nominations so like…how the f are you $20.54 billion in debt? Is that how much it cost to get the Fuller House cast together? I’m confused.
Apparently, Netflix is unconcerned, and they have no intention of ending their over-the-top spending anytime soon. Same. I mean, you know what they say, you gotta spend money to make money or whatever. At least, that’s what I tell myself every time I max out another credit card. Haven’t gotten to the “make money” part of that plan yet, but I’m sure it is coming.
Anyway, here’s hoping Netflix gets their shit together because I’d hate to have to start inviting bros over for sex under the pretext of watching something on Hulu. That would be so embarrassing.