Need Money
Money School for Couples – Product Interview with Neal Frankle
Neal over at Wealth Pilgrim has been a regular guest contributor to Frugal Dad. He came out with an unusual e-product yesterday. I found it interesting and wanted to learn more. In the following post, I asked him several questions about his new project.
Neal, what is Money School for Couples?
It’s a series of 10 videos, exercises, downloads and white papers to help couples make money a non-issue in their relationship.
Why did you create it?
Over the last 25 years advising clients, I’ve seen so many people worry and fight about money when they really didn’t have to. That’s a real shame if you ask me.
You had it pretty rough financially and emotionally growing up. Did that have any impact on this project?
Probably….but not consciously. I grew up in total financial fear. Both my parents passed away when I was in high school and I was homeless for a short time. Even when I started having financial success, I stayed stuck in fear. I made myself, my wife and my children absolutely miserable. In my case, having money didn’t solve any of my problems….it just changed them.
Those experiences remind me to be grateful for all the great gifts I have in my life. Do I need money? Yes. But I have to stay balanced. Working for money has a cost too. So if I spend and work wisely, I can have a great life. It’s not just about spending. It’s not just about making lots of money either.
I think it’s easy to lose sight of our gifts and sometimes, money really gets in the way of having a full and happy life. At least that’s been my experience. It’s about balance.
Why do couples argue about money?
One third of the problem is caused by not really understanding how money works. How to budget, spend, get out of debt, save etc. This is simply an issue of understanding. When one or both people fail to understand how money works it often leads to huge mistakes and arguments.
Another third of the problem is caused by not being on the same page with each other. This is a communication issue.
The final third is caused by not taking action. Lots of people know what to do but for some reason they just don’t do it.
Neal, with all due respect, there are plenty of books that address each of these issues. What makes Money School different?
I think there are three main differences. First, I present the material in several 5 to 10 minute videos that are designed to be watched by the couple together. It’s one thing to throw a book at your husband and tell him to read it. It’s quite another to sit down together and go through the material. In fact, the very first video has the couple give each other a signed commitment to work through all the exercises together. What book does that?
The second difference is that each module has exercises which are designed to get the couple into action and on the right path moving forward.
The last difference is that Money School for Couples recognizes that folks often know what to do and still don’t get it done. The program offers solutions for those problems too.
In short, it’s the only program I know of which deals with all three obstacles – and you have to deal with all three if you want to really make progress.
Can you give me an example of a couple who might benefit?
Sure. In fact, I wrote about this couple on Wealth Pilgrim not long ago. They are in their 30’s. The husband is very tight-fisted and his wife is miserable. He wants to save everything he can for retirement. His wife also wants to save for the future but wants to enjoy life today too. What they need is balance. They can fight all they want…they’ll never convince the other who is right and who is wrong.
Money School will show them how much they need to save to achieve their goals and how much they can comfortably spend. The program will allow them to learn together and come to joint decisions. This is a perfect example of who this program is designed for.
I read in your blog yesterday that you had some real ambivalence about introducing this product to your readers…why?
Right. I was really concerned about sending a marketing e-mail to my subscribers. They never signed up for that so I just couldn’t send them one. That’s why I’ve opened up the pre-launch program for anyone this week. I wrote about the product on my blog and anyone who is interested can take advantage of the pre-launch price this week. That goes or Frugal Dad readers too.
It’s also a bit weird for me to sell anything on my blog or through the internet. I’ve never done that before and I just had no idea how people would react to it. In the end, I just decided to do it but be as transparent as possible. We’ll see what happens.
Thanks Neal. Good luck with Money School for Couples!
Post by Frugal Dad
Where To Park Car Savings?
John writes in with a question about parking medium to long-term savings for a car replacement fund.
Here’s my situation: my car is 7 years-old with only 60,000 miles on it. It’s in good condition and definitely dependable; I plan on using it for another 5-10 years (five being the least). I figure that after 7 years of saving I would have about $8,400 plus the trade in value for my car - we’ll say that’s $1,000 for a total of $9,400.
My question is what do to with those savings? I don’t want to just let them sit there in my savings account, although it does have a decent APY of 1.40%. Should I put a sizable chuck into a 5 year CD and then continue to ladder it in CDs of decreasing term lengths until I need the money to buy my car? Or should I just put it in a money market account, or higher yield savings account?
I want to maximize the money earned on that fund with out totally sacrificing my ability to withdraw it should an emergency come up, or I need to buy a new car sooner. What would you recommend?
John also shared with me that he is nearly debt free and will begin this car replacement fund after building a small emergency fund. Normally, I would recommend investing money that is to be used greater than five years out in a mix of fairly conservative mutual funds, such as a broad index fund with a low-fee brokerage like Vanguard.
However, this case is a little different because John is dedicating these funds as a car replacement fund. As such, the need to use these funds could arise any time between now and the six or seven years he plans to save. My own experience with Murphy’s Law leads me to believe John’s car will die the exact moment there is a market downturn, causing John to pull out savings at precisely the wrong time.
Instead of dabbling in a risky market, I would suggest parking the savings in an online savings account or money market account, and possibly a CD. I’m hesitant to fully recommend a CD because John mentions the possibility of tapping the funds in an emergency. To do so, he’d have to pay a penalty for cashing out the CD before the term expires.
Sometimes we have to sacrifice a little earnings for peace of mind, and I think this is the case with John’s car replacement fund. I’ve taken the same approach with my own set of sinking funds and targeted savings accounts. For now, they are stashed away in an online savings account at ING Direct.
Funds I don’t plan to use for a number of years will soon be laddered in CDs to increase the rate of return slightly. I’m comfortable reserving market investments for long-term saving goals.
Do you have any additional advice for John? Where are you currently parking savings for large purchases?
Post from: Frugal Dad
Top Ten Songs About Money - The Frugal Dad Soundtrack
I’m a big fan of talk radio, particularly any radio program around the subject of money. One of the things that has drastically improved over the years is bumper music - the music you hear as the host takes the audience in and out of breaks. Imagining I had my own radio show, I wondered what my top ten songs about money would be to make up sort of a “Frugal Dad” soundtrack. Here’s a few candidates:
1. “For The Love of Money” by The O’Jays
Some people do bad things with it, but in general money lets you do a lot of good things.
2. “Money Talks” by AC/DC
Money does talk, especially cash money. Flash a little cash at car dealers, furniture stores and yard sales and expect good deals to follow.
3. “I Wanna Be Rich” by Calloway
Who doesn’t want lots and lots of money for a little love, peace and happiness?
4. “The Power of Love” by Huey Lewis & The News
I recognize this song isn’t really about money, but for the lyrics, “You don’t need money. Don’t take fame. Don’t need no credit card to ride this train” I simply had to include it.
5. “Take the Money and Run” by The Steve Miller Band
Sometimes it’s tempting to just take the money and run, but remember, you can’t hide forever.
6. “Money” by Pink Floyd
“Money, it’s a crime. Share it fairly but don’t take a slice of my pie.” Too bad this isn’t on Tim Geithner’s playlist, too.
7. “The Gambler” by Kenny Rogers
Knowing when to fold ‘em is a great lesson for investors. If you’ve lost a ton of money on an investment, and continue to hold ‘em, you might just lose more.
8. “Mo’ Money Mo’ Problems” by Notorious B.I.G. featuring Puff Daddy & Mase
It is true; the more money we come across the more problems we see. Just ask any recent lottery winner!
9. “Can’t Always Get What You Want” by Rolling Stones
No, you can’t always get what you want. Which is why it is important to separate needs from wants.
10. “Can’t Buy Me Love” by The Beatles
The Beatles had it right, money can buy a lot of things, but it can’t buy love, or happiness.
Do you have a favorite money song? Of the ten listed above, which one would you select for a “Frugal Dad” radio show intro? I’m thinking that AC/DC tune would get people pumped up about money.
Post from: Frugal Dad
Weekly Roundup - Living On Nothing Edition
Did you hear about the guy that lives on nothing? No seriously, he lives on zero dollars a day. Meet Daniel Suelo, who lives in a cave outside Moab, Utah. Suelo has no mortgage, no car payment, no debt of any kind. He also has no home, no car, no television, and absolutely no “creature comforts.” But he does have a lot of creatures, as in the mice and bugs that scurry about the cave floor he’s called home for the last three years.
To us, Suelo probably sounds a little extreme. Actually, he probably sounds very extreme. After all, I suspect most of you reading this are doing so under the protection of some sort of man-made shelter, and with some amount of money on your person, and probably a few needs for money, too. And who doesn’t need money unless they have completely unplugged from the grid? Still, it’s an amusing story about a guy who rejects all forms of consumerism as we know it.
The Frugal Roundup
How to Brew Your Own Beer and Maybe Save Some Money. A fantastic introduction to home brewing, something I’ve never done myself, but always been interested in trying. (@Generation X Finance)
Contentment: A Great Financial Principle. If I had to name one required emotion for living a frugal lifestyle it would be contentment. Once you are content with your belongings and your lot in life you can ignore forces attempting to separate you from your money. (@Personal Finance by the Book)
Use Energy Star Appliances to Save On Utility Costs. I enjoyed this post because it included actual numbers, and actual total savings, from someone who upgraded to new, energy star appliances. (@The Digerati Life)
Over-Saving for Retirement? Is it possible to “over-save” for retirement? Yes, I think so. At some point I like the idea of putting some money aside in taxable investments outside of retirement funds, to be accessed prior to traditional retirement age. (@The Simple Dollar)
40 Things to Teach My Kids Before They Leave Home. A great list of both practical and philosophical lessons to teach your kids before they reach the age where they know everything. I think that now happens around 13 years-old. (@My Supercharged Life)
Index Fund Investing Overview. If you are looking for a place to invest with high diversification and relatively low fees (for broader index funds with low turnover), index funds are a great place to start. (@Money Smart Life)
5 Reasons To Line Dry Your Laundry. My wife and I may soon be installing a clothesline in our backyard. In many neighborhoods they are frowned upon - one of the reasons I don’t like living in a neighborhood. I digress. One of our neighbors recently put up a clothesline, and we might just follow his lead. (@Simple Mom)
A Few Others I Enjoyed
- 4 Quick Tips for Getting Out of a Rut
- Young and Cash Rich
- Embracing Simple Style
- First Trading Experience With OptionsHouse
- The Exponential Power of Delayed Consumption
- How Much Emergency Fund is Enough?
- 50 Questions that Will Free Your Mind
- Save Money On Car Insurance
Carnivals I Participate In Recently
- The Festival of Frugality Stops at Go Frugal
- Carnival of Pecuniary Delights
- Carnival of Money Stories
Post from: Frugal Dad
How Large a Role Does Income and Net Worth Play In Your Propensity to Save?
Do you think that high-income families clip coupons more or less than those on the lower-end of the spectrum? I don’t know the answer to this, but I was surprised when a friend of the family told my mom she would never considering clipping coupons. When my mom asked why she simply answered, “We don’t need to. My husband makes a lot of money.” She went on to tell my mom that she never looks at prices and rarely buys anything on sale.
Right now I consider my quest to save money a bit of a game. I enjoy walking out of the grocery store with a long receipt in hand. As soon as I get into the car I calculate my total savings and commend myself whenever I save over a certain percent. My husband can certainly attest to that fact. As soon as I walk in the door I tell him exactly how much I saved!
In my opinion there are two inputs to the savings equation. The first input is definitely income. This can come from your primary job, a hobby, a passion, whatever, but somewhere along the way you need to bring money home. It goes without saying that the more money you make the more money you can save, but it is also important to note that a high income alone won’t provide you with abundant savings. You also need to maintain a healthy, moderate lifestyle. In essence you need to ensure that your standard of living doesn’t rise significantly alongside your wage.
I personally think that thriftiness, frugality and solid money management practices are almost as important as income in the savings equation. After all, if you spend every cent of your humongous salary you may still wind up destitute and penniless. On the other hand, if you watch your money closely and carefully you can grow a large nest egg from a relatively small income.
Right now I try to save as much as I can because, oddly enough, I have fun trying to save money and because I aspire to lofty goals including paying off my mortgages and reaching financially Independence. But I wonder, once I reach financial Independence will I stop clipping coupons and digging through the sales circulars? Similarly if my income quadrupled would I still see the need or desire to save so faithfully?
I wonder how large a role income and net worth play in my propensity to save? At this point in my life saving money is simply a habit that I do not foresee quitting. I cannot imagine having so much money that I wouldn’t consider cost a factor in my purchases and decisions. I also imagine that my financial goals will continuously expand. Right now my goal is to pay off my mortgages and achieve financial independence, but after that goal is met who knows what other goals I might devise? Right now I cannot imagine a point in time where I will not save, but of course I don’t know what the future holds.
Saving money & Getting a bike
Some tips for the people who are trying to save up enough money to finally get a motorcycle. I figure since our lovely American economy is doing just swell this could apply to people that just plain need to save money! Thanks for the views, guys 
Here’s the website to the place I mention in the video: www.xtremecc.net
So Close to Plunking Down $1000
If you’ve read this blog for any time you know that I am extremely frugal. I absolutely hate to spend money on anything extravagant and I often think and rethink big purchases at least two or three times before actually pulling the trigger.
Although I am thrifty 99% of the time, I do spend big bucks every one in awhile. After all, being frugal 360+ days a year allows me to splurge on big tickets every so often.
This morning I jumped online and searched for a next-day flight to Atlanta. The cheapest pair that matched the time frame my husband and I required would’ve cost over $1000. I left the search page open and went off to start the day.
So why did I need a last minute flight to Atlanta? Was it for a wedding, a funeral? No, neither one, I was hoping to catch a flight to Georgia to watch the championship game of the ACC tournament.
I am a huge Maryland fan and I would have happily plunked down $1000 for the opportunity to watch them win a championship. I know it seems pretty strange for someone so frugal to drop so much money on something so frivolous, but hey, behind saving for freedom and stability, you have to save to live a little.
Unfortunately the Terps failed to beat Duke in the semi-final game, so I didn’t need to spend the money on plane tickets, but if the Terps had won I definitely would’ve booked the first two tickets to Atlanta.
