Saturday, July 7, 2012

Save your marriage by sharing financial responsibility!

How to deal with a financially irresponsible spouse?!!
How to deal with an extremely frugal spouse?!!
How to save your marriage when you are poles apart in your financial habits?!!

All very relevant questions in today's world. Divorce rates at their peak today. One of the unfortunate causes for this is the difference in which each individual treats money. If you and your spouse find yourselves poles apart in your spending and saving habits, then life together becomes tough. Minor purchases and behaviors tend to flare up arguments and fights. As these fights and arguments increase, you will find yourself walking away from each other more often.

Her 25$ new dress looks like a big red flag to you while your 200$ electronic gadget looks like a mockery of family values to her!

It is very important for couples to have similar views on budgets, savings and expenditure. These aspects of life intermingle with 90% of your thought and actions on a normal day as a couple. If you find yourselves poles apart on these categories, you are going to be in fights on a daily basis!

Unfortunately not all of us think about this financial compatibility while marrying :) . Love can be blind! Opposites attract is a rule of love that cant be denied! So how do you deal with this situation and save your marriage?

I have been looking around for suggestions from different financial advice blogs on this topic. I found a pattern of advice which I found would most likely work.

Always communicate about the problem. Never let your thoughts and anger build up quietly till it finally bursts open to leave an ugly mark. Call for a family meeting and discuss what is worrying you. If you love each other, you will listen to your spouse when he or she explains something with love. Bring the issue to the table and talk about how you see a long term problem

Budget together
Sit together and plan together! Talk to each other and agree on what your long term and short term goals are. In the long term, you may be planning to settle down somewhere, own your beautiful suburban home, build a retirement fund, etc. In the short term, you may be planning a vacation, you may be planning a major purchase like a car, etc. Talk about these and agree on how to go about doing them. How to set aside something every month for these goals? how to manage the rest of the month after paying for your long and short term goals? this helps to divide the financial responsibility between both of you.

Manage together
This is vital! Budgeting together only ensures the planning is done properly. Execution is the key!
Divide responsibility here. Make each other responsible for different aspects of the plan so that you are each managing something for the family and are accountable for it! Your love for each other will make you want to do a better job for the family :).

Say one of you is a spendthrift. Get a debit card with a spending limit according to your grocery budget. Let him or her manage that card to do the grocery shopping for the entire month! This will help your life partner feel the financial responsibility. This experience will help bring you together.

Celebrate together
This is equally important! Don't get too caught up in your budgeting and saving plan that you forget to cherish each other! Have some short term goals that will help you celebrate together.

Plan a couple of vacations a year. Vacations don't really have to cost a lot! There are many low cost options that you can research and find. Or plan to dine out a few times in a month. This will be a treat to congratulate yourselves on sticking to your budgets! If your spendthrift life partner manages to be within the planned grocery budget, then plan a treat with the savings! These little joys will add to your bond and love for each other!

Hope this articles helps you! If you have additional advice, please share them with me!

Friday, June 22, 2012

SmartyPig - Piggy bank your savings to reach goals!

Lately I have been researching about the best checking and savings accounts out there. My current aim to setup an emergency fund at the earliest. As I build this fund, I want to keep it in an account that will offer me a good interest rate and a good liquidity policy.

Everyone must maintain an emergency fund. We all run into emergencies once in a while. These events wreck havoc with our planned budgets. An emergency can be anything - a near and dear one may fall sick or your car may suddenly need repair. We should always have an emergency fund which will allow us to respond to these situations without having to break any investments or borrow money in anyway.

I have been thinking of keeping this money I am putting aside in a high interest yielding account. My current checking account with one of America's biggest banks pays me no interest whatsoever. Well, that's no good place to save money in! At the same time, I cant put this money in a high yielding CD and lock it away for a year or two. I need to be able to utilize this money when i face an emergency.

One of the options I came across was SmartyPig. SmartyPig is an online website partnering with BBVA Compass bank that provides online savings accounts to people like us. The most unique feature I found about this online bank was its emphasis on social networks and how to utilize them to save!

SmartyPig allows you to open a savings account and specify a goal for it. For ex: You are telling them that I am opening this account with a goal to setup an Emergency fund of 7500$. Opening an account can be done entirely online. They will prompt you for your information (All the same information that you would give when you open an account at the branch) along with information of your Goal and the target amount.
You will have to link your current account from which you want to transfer money into this savings account. Once the link is created, you can transfer some money when you wish or setup automatic payments into your SmartyPig account.

Now lets see how this online savings account sets itself apart from other online banking accounts -
1, SmartyPig is currently offering 1% APY on its accounts. This is definitely one of the best interest rates out there in today's environment!
2. You can specify a goal  and target for your account. Then publish this information via Twitter or Facebook to your friends! They can participate in helping you save for your goal as well as encourage you on these social sites!
This is pretty unique. It will definitely encourage a lot of youngsters to save. One of the tricks of achieving any tough task is to announce that you are taking on the challenge. The additional pressure and motivation received from this publicity will help you move towards your goal!
3. There is no fees and no minimum balance! They promise that there is no catch. That is really very helpful since I need liquidity on my account.
4. Once you achieve your goal, you can transfer the money back to your original source of funding if you wish. 
Now here is the twist! They offer a couple of more ways to take the money you saved.
Redeem your goal by taking it back as gift cards from retailers like Amazon, Lowes etc. These retailers offer up to 11% in cashback savings. So in case you were saving for a goal like buy the latest Plasma TV, you benefit on the extra savings via the Amazon gift card as well!
You can also redeem your goal via a SmartyPig Cash rewards card. This is accepted via the Mastercard network. It acts like a prepaid card and Smartypig offers 1% cashback on every purchase made using it as well. So your money is buying you more than it can once again.
Caution: Both of these options to redeem are aimed such that you end up spending that savings via a retailer or prepaid card. So be careful while availing these options. Be sure that you actually saved to spend on something you need!
5. The account is FDIC insured for 250000 $. So you can be assured of its safety.

All these unique features make this a very attractive savings account. If any of you have used this bank, please do feel free to comment and let me know how good or bad this is!

Wednesday, June 20, 2012

TrueEarnings Costco credit card from American Express

During my research recently about cashback credit cards, one of the cards that perked my interest was the TrueEarnings Costco credit card from American Express.

Is this card worth it?

The card boasts of an impressive cashback percentage. They term it the 3-2-2-1 formula :)
That is -

3% cashback on gasoline (Note this is subject to an annual limit of 3000 $. Beyond that they will give 1% cashback )
This is a definite plus if you drive a lot! At today's prices, this is 3 % on nearly 850 to 1000 gallons a year.
Plus remember Gasoline at Costco is generally cheaper than other gas stations. So that's a double benefit!

2% cashback on restaurants. 
If you are like me and eat out quite regularly, then this is definitely another big plus

2% cashback on travel
Who doesn't like to travel? :) If your plane tickets, car rentals and hotel bills give you 2% cashback, then it is again pretty good. 

1% cashback on all other purchases including Costco
Now let me compare this with the other American Express card I liked a lot - Blue Cash Everyday American Express card. That card offers 3% cashback on all grocery purchases but has a catch that the groceries have to be bought in supermarkets.
Costco will be considered a wholesale club. Walmart will be considered a superstore. So purchases in these places will only fetch you 1% cashback with the Blue Cash Everyday card.
This Costco TrueEarnings card is also offering the same 1% cashback on Costco purchases. So in my personal opinion, this is not really a parameter that differentiates these cards.

Lets talk about Annual fees. The Costco credit card doesn't charge you annual fee as long as you maintain your Costco membership.
So the annual membership fee is the same as the costco membership fee if you don't already have a Costco membership. But if you do, then this card is free!

How do you redeem your rewards? you get a reward coupon from American express that you need to redeem at Costco. You can do so as both merchandise or cash.
I personally don't like the fact that the cashback rewards can be utilized only annually once. Plus you need to take your coupon to the local Costco to redeem it. I would prefer the multiple options which Chase offers! You can get it as a check or credit back to your account as well from Chase. That's pretty convenient!

Overall I felt this card is very useful if you are a larger family and have the habit of buying in bulk from a wholesale club to save on expenditure. Costco is definitely one of the better or best wholesale clubs around. So if you fall in this category, this card is really good. 

If you don't fall in this category like me, then the American Express Blue cash Everyday or Preferred is a better card for you.

Hope this review helps you!

Tuesday, June 19, 2012

Live for today or Live for tomorrow?

I was browsing around looking at fellow financial blogger's sites when I found a very interesting article - Stop being obsessed about saving every penny by dollarVersity.

He has written very well explaining the dangers of becoming extremely frugal. Living frugally and counting every cent means you basically live a tough life today, hoping all the money you save will give you a better tomorrow. He warns that we will loose sight of when this tomorrow would come and will end up not enjoying life at all.

Personally I believe one should try to reduce any expenditure in his or her budget which is not a necessity. However i fully agree with dollarVersity's author as well! Living like that is extremely tough and mentally depressing as well.

My goal with budgeting and my desire to save money is driven not by a distant dream of being able to live a happy retirement when I am 55 years old. Luckily I don't have too many debts which force me down this path as well. Nor do I plan to leave a legacy behind for my future generations :) . Simple and plain - In another 5 to 10 years from now, I want to be in a position where I can reduce the stress in my life around the questions - Is my job recession proof? What will happen if I loose my job?
I basically want to reduce the stress around my dependency on my salary income and job. I should be able to relax thinking I can survive till i find another job. My family would not suffer till then. We can meet our needs in other ways we developed over the past by saving when we could.

I believe if I am able to cut down this stress in my life, I will have a much more relaxed tomorrow. Also I have a definite tomorrow in mind. My tomorrow is not a far far away tomorrow!! Always keep tangible goals when you want to achieve anything. Keep both long term goals as well as short goals.

In this quest, I know that its important for me to do multiple things. Save to create emergency funds. Save to create investments. Invest what I can such that i get decent returns. Develop alternate skills. Improve my work skills. Develop passive income sources. etc, etc. In this quest, I do tend to be frugal today. I do make sacrifices where possible to achieve these goals.

But everyone needs to remember one thing - the journey is just as important as the goal. You are talking of precious 10 years of your life that you wont get back. You will succeed in saving only when your mind is happy and excited to do it. Your mind requires a few perks once in a while to feel that happiness. So always budget for a little fun and happiness every month.

CAUTION: Never go overboard. Never splurge such that it will wipe out all the good work you did in the past few months.

However do allocate some money in your monthly budget to a category that will give you entertainment and happiness. Make sure your near and dear ones enjoy this category as well. This will make them happy and willing partners in your endeavor to save and secure a safe future! Hope this advise helps you.

Sunday, June 17, 2012

Best cashback credit cards out there!

As I explained in my previous post, cashback credit cards make most sense in terms of getting rewards back from your credit card company for most people. I read somewhere that the credit card companies charge merchants 2-3 % of the transaction as their fee. If that is true, cards that offer 1% cashback are pretty good. Then there are some cards that even offer higher percentages of cashback. Choose wisely based on your spending pattern to reap the best benefit for yourself.

How does a cashback credit card work?
Lets take an example of a card that gives 1% cashback on every transaction. You spend around 600 $ in a month on this card. The card company would add 6 dollars to your rewards at the end of the month (after the billing cycle is done). You can get this reward back as a credit to the card if you wish. There are options of getting this money as a check or deposit to another account as well (depending on the card company).

Here I took an example of a card that gives 1% cashback. That is generally the minimum percentage out there. There are cards that offer higher percentages and you can reap rewards upto 30$ - 40$ per month. Now that is a significant reward! :) Some savvy credit card users do even better!

In my case, I found i spend most of my money on groceries and eating out every month. I did my research using, which I highly recommend to everyone. Best part - it is free!

Now based on this research, following are what i found as the best cashback credit cards out there as of today (June 17th 2012) -

1) Blue Cash Preferred and Everyday from American Express
These are two cashback cards from American Express. One is the Blue Cash Preferred (comes with an annual fee of 75$) and another Blue Cash Everyday (no annual fee). They offer great cashback rewards on expenditure in supermarkets and fuel.
The Preferred card offers 6% on supermarket purchases while Everyday card offers 3%
The Preferred card offers 3% on fuel purchase while Everyday card offers 2%
They both offer 1% cashback on all other purchases.

Getting 6% cashback on supermarket purchases is awesome. Say you spend around 400 dollars at your neighborhood  supermarket for groceries in a month. That would mean at the end of the month, you would have 24 $ back in your hand!
Say if you prefer not to give the annual fee, you would have 12 $ back.That is still awesome!

Currently they have a promotion saying if you spend 1000 $ in the first three months on this card, you will get 150 dollars as a bonus on the preferred card, that is 2 years of annual fee in your hands straightaway! :)
If you still prefer the no annual fee card, you will get 100 dollars of bonus!

2) Chase Freedom Visa Card
This is another awesome card out there. It is on the VISA network so you need not worry about where it will get accepted!. Visa is probably the most widely used card network across the world

This card offers 5% cashback on different select categories every quarter. Throughout the year it offers 1% cashback on all other categories. I have found that these revolving categories are actually very useful for us.
For example, between April and June, they are offering 5% cashback on groceries. That is pretty awesome!
Between July and September, they offer 5% cashback on gas stations and restaurants!
Looking at my spending pattern, I clearly know that I will benefit a lot in both of these quarters. Rest of the year too they have very good distribution in categories.

Best of all this card comes with no annual fee!
They have an upper limit saying upto1500 $ spent per month on the special categories will be eligible for cashback. 1500 dollars is pretty large upper limit for groceries or fuel or restaurants! so dont worry about that!

Also they too have a 100 $ bonus offer going on currently which you will get for spending 500 dollars in the first three months using their card. So that's some extra free money you can make!

Caution: While these cards say they will provide 5 % cashback on groceries, the fine print says it is only for supermarket purchases. That is if you buy your groceries from a superstore (like Walmart) or a wholesale club (like Costco or Sams Club), you will not get the cashback. So be careful to check how much you spend in supermarkets, when deciding about this card!

There are two other very good cards that I found in my research. Discover and Citibank. I will post about them tomorrow. Till then, keep saving!

Saturday, June 16, 2012

Cashback credit cards

Previously I had written on why we need to be extra careful about using credit cards. Credit cards are generally considered an enemy in the battle for financial security. But the truth is they can be used as a potential ally in this same journey. A potential ally who you need to keep a tab on always :)

I have found that credit cards are very useful in two ways -

One, they act as an emergency fund. Everyone needs to maintain an emergency fund always. Typically this should be the amount you would need to maintain your lifestyle for at least three months when your source of income , god forbid, stops to exist. It is a fund you will turn to when you are suddenly faced with an emergency. This kind of thing turns your planned budget upside down.

Ideally you should save a portion of your income in a savings account for this. There are some really good savings accounts out there which provide a great interest rate (however these rates may seem pretty low unfortunately in today's world). These accounts also allow a great deal of flexibility in terms of liquidity of funds. One great website I found that shows latest and best savings account rates is
Another site to check for interest rates is

However your credit card can also be a great asset when you run into an unexpected emergency. It can supplement as your emergency fund available in a savings account as well. However remember to pay off the card as soon you recover from your situation. Keep in mind credit card debt can be your worst enemy as i mentioned in my previous post - Credit Cards: Advantages and Disadvantages

Secondly, you can pick and choose your credit card such that you get back something from it via rewards.
If you travel a lot, a travel rewards card can be a big help. But in my case and in my personal opinion for most of us, a cashback credit card is the best. You can earn cash back from the card company thanks to all the transactions you did.

Caution: Remember these should be transactions you would have made irrespective of whether you had a card. That is never spend to buy things on your card just for the reward points. You should buy only if the item is essential for your needs.

There are many cards out there which offer great cashback %s on different categories. I will detail out a few i researched in my next post. Most importantly, by analyzing your expenditure, you should be able to determine on which categories do you spend a lot via plastic.
If it is groceries, then search for a cashback card that gives max % on supermarkets
If it is on fuel, then search for a cashback card that gives max % on gas purchases
There are many choices out there so be careful to read through all features of card before taking one. There are many websites out there which help you even compare different cards, like -

We will talk more about the few ones that I researched recently in the process of choosing one for myself in the next post. Till then, keep saving!!

Thursday, June 14, 2012

Save for a secure future!

Whats the most basic way to increase your net worth? Whats the trick to ensure a growing bank balance?

Its a very simple principle. Always make sure you spend less than what you earn. What remains after this has no where to go but into your net worth!! As long as you follow this diligently, you will secure a safe future.

Budgeting is a necessary skill in today's world. One needs to monitor his/her family's cash flow and plan accordingly. It is important to plan how much you will spend on all categories of your expenses and then track how you are progressing towards it.Make cutbacks when you are overspending on a category.
ex: If you realize that you are spending a lot on eating out, then brown bag your lunch for the remainder of the month.

Some more important advice on saving money -

It is important to control the need for instant gratification. Most people today have developed tendencies such that they can feel happy only if they are spending a lot of money. Ever heard of shopping therapy? Unfortunately such tendencies, if unchecked, can destroy your budgets. They may bring a lot of pleasure and happiness in the moment but over time they ruin your financial future.It is actually not true that you need to spend to feel happy. There are many productive and cheaper ways to make yourself feel better - charity work, writing, reading, hobbies, cooking, exercise etc.

At the same time, it does not mean you need to live frugally. Meet all your necessities always. Spend a little extra once in a while to feel mentally and spiritually wealthy. Enjoy a movie with your family. Eat out a few times a month. Spend some money to help the needy. Do all these as long as you remember our basic principle - Spend less than what you earn. Also always aim to increase the gap between these two - income and expenditure.

Another important thing is to stop comparing yourself with others. Your neighbor may be driving an expensive SUV. Your childhood friend may be travelling to different exotic places in the world. They may be doing it as they earn enough to live that way. Or they may be doing it by getting into debt. It does not matter. You need to think what is best for you and your family. If you can afford it, then do it. Don't do it just because your friends did it. This is very important to prevent debt and ensure your savings stick around for the future.

Keep these things in mind and you will be on your way to financial security! Remember, your commitment to the end goal is your biggest strength in any battle.