6 Money Tips for Married Couples

Edward Stern is a writer on earning your bachelors degree online.

MoneyMarriage is a union between two people who are in love and want to share the rest of their lives together, but boy does money enter into the equation in a big way. Money issues are the #1 reason for divorce in the United States, mostly because people don’t have enough of it. Money is a big deal for a married couple, especially ones with children and other family members to support.

Especially in today’s tough economy, it’s more important than ever to be thrifty and do what you can to save money. Saving money doesn’t mean drastic life changes or eating 10-cent ramen noodles with every meal; instead, just making a few easy cuts here and there can help you save big over the course of a year. Here are six money tips for married couples to help make some easy choices when it comes to money that will help you save, both on bills and on headaches.

  1. Buy store brand as much as possible: Whether it’s at Costco, Target, or Safeway, buy store brand over name brand as much as possible. It’ll save you a good chunk of change and you’ll be getting the same thing as the name brand, really. Big name brands bid on getting the rights to store brands so they can capture different parts of the market. They sell store brands for less and name brands for more to help off-set costs. For basic things like toilet paper, pasta, and bottled water, go with the discount name brand to spend less without sacrificing quality.
  2. Be creative when it comes to childcare: One of the largest expenditures for working parents annually is childcare costs. Putting a child through daycare and after-school care is expensive enough, but when you throw multiple children into the mix, it becomes a financial drain. Figure out creative ways to save on childcare. Ask relatives if they’d be willing to watch children, and compensate by taking them out to dinner every once in a while or treating them to a night out. Swap playdates with other parents, or if you work part time, find another mom with a different schedule from yours to swap shifts. Enroll older children in after-school sports at school.
  3. Cut the crap: In all likelihood, you are paying for things you don’t need or rarely lose. Get rid of them. Magazine subscriptions are a drain on finances, as are newspaper subscriptions; plus, you can view the same content online for free or for a cheaper rate. If you’re not using a gym membership, cancel it, or just go running and create a home gym. Do you really need premium cable? How many of those thousand channels do you watch?
  4. Explore the great outdoors: Family days at an amusement park or at the movies are certainly fun and a good way to spend time together, but they are costly. Instead, have fun at a public park tossing a football or go swimming at a public beach. Go on a day hike, or if it’s snowing have a big snowball fight and build snowmen all day, maybe splurging on a hot chocolate break at the nearest bakery. See what community events are being put on in your neighborhood and city. Family fun days don’t have to be expensive — there’s plenty to do for free.
  5. Get a programmable thermostat: Heating bills are a big cost, and rather than making your family bundle up while keeping the house freezing, install a programmable thermostat. Most people save up to 20 percent on their heating bills by doing so because you can program it to turn off when you’re out and about and to change temperatures in the morning and when you go to bed.
  6. Only buy what you can: After creating a budget stick to it, and only buy what you can afford now — that means no credit cards. You’ll just get yourself into debt and rack up costly interest, having to pay more than you would have before. Spend responsibly and within your means, avoiding credit cards to encourage those habits.

500 Billion Dinara

500 billion dinara banknote

I hold a 500 billion dinara banknote, worth $6 when first issued

Millions of U.S. citizens are concerned about deficit spending and the possibility of high inflation and even hyperinflation. To illustrate how easily fiat money can become hyperinflated, I have been highlighting the top four countries that have had hyperinflation. They are:

  1. Hungary, 207% daily inflation rate in July 1946
  2. Zimbabwe, 98% daily inflation rate in November 2008
  3. Yugoslavia, 65% daily inflation rate in January 1994
  4. Germany, 21% daily inflation rate in October 1923

Note that the inflation rates cited are daily. O my, I am glad I didn’t have to live through hyperinflation. Also observe that these countries are not confined to Europe. China is not listed but if they were they would come in at number 6. Anywhere fiat currencies are used (that’s basically everywhere) the danger of hyperinflation is forever present.

To complete the gang of four, today I am discussing Yugoslavia.

The 500 billion dinar banknote was introduced on December 23, 1993, and was worth $6. By noon it was worth only $5. By evening its value was less than $3. There was 5,000,000,000,000,000,000 percent inflation from October 1, 1993 to January 24, 1994 (prices doubled every 1.4 days).

From when the 100 dinara coin was struck in 1989 until the 500 billion banknote was issued on December 23, 1993, the currency declined in value 100 billion to one. The note was the largest nominal value ever issued by Yugoslavia. Children’s poet Jovan Jovanovich Amaj adorned the obverse of the bill.

Also see 34 Examples of Hyperinflation.
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One Hundred Million Marks

100 million marks

Weimar Republic 100 million mark banknote

The 100 million mark banknote I am holding was mere pocket change compared to the value of the banknotes yet to be issued in 1923. In early 1921 German currency was trading at 60 marks to the U.S. dollar. By November 1921 there were 330 marks to the dollar. A year later a dollar bought 8,000 marks. In December 1923 the exchange rate was 4,200,000,000,000 marks to the U.S. dollar.

The Wiemar Republic did not have the worst hyperinflation in history — Hungary holds that “honor”. Zimbabwe was the second worst offender, followed by Yugoslavia, and then Germany. Greece and China round up the top six hyperinflators of all time.

The highest denomination in Germany was a 100,000,000,000,000 mark banknote issued in 1923. Workers were paid three times a day and wives would meet them to rush to the store to pay 200 billion marks for a loaf of bread.

The hyperinflation was caused by the government issuing massive amounts of new money. This caused prices to rise. Germans with money saved had it wiped out, making them destitute. The German government essentially monetized its debt, much like the U.S. is doing of late. Germany failed to raise its interest rate sufficiently, just as in the U.S. at present.

The main force in the 1920s which gave the nightmare German inflation its momentum was the relentless decrease in the real value of currency in circulation.

Just like in the United States in 2010.
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One Hundred Thousand Milpengo

Hungarian Milpengo

Hungarian 100,000 Milpengo banknote

I recently wrote that I was concerned about the increased deficit spending by the Obama Administration. I showed what happened to Zimbabwe when the government failed to control their currency and their spending. Although hyperinflation destroyed their currency and their citizens lives, the worst offender of all time was Hungary.

Above is a 100,000 Milpengo banknote if I am reading it correctly. A Milpego is a million pengos. So this note is a 100 billion pengo banknote. However this is small change. The largest denomination banknote in history was in circulation in Hungary in 1946. It was for 100 quintillion pengo or 100,000,000,000,000,000,000 pengo.

Hungary had the highest monthly inflation rate ever — 41,900,000,000,000,000% in July, 1946. Prices doubled every 13.5 hours.

When I show friends this banknote and the Zimbabwe note, handling them brings home the fragility of our own Federal Reserve Notes. They know that our printing presses are bigger and faster than any that Zimbabwe or Hungary ever ran. Their economies were destroyed by hyperinflation.

And the same fate could befall us.

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One Hundred Trillion Dollars

100 trillion dollars

When announced, the note I hold was worth 30 US dollars but would quickly lose value

Recently I have been concerned about the increased deficit spending by the Obama Administration. The risk of inflation, even hyperinflation, seems to be in our future. With a little study I was surprised to learn scores of countries have experienced hyperinflation.

In November 2008, Zimbabwe had a monthly inflation rate of 79,600,000,000% and an annual rate of 89,700,000,000,000,000,000,000%. The daily inflation rate was 98% and prices doubled every 24.7 hours.

Even these horrendous numbers do not equal those of Hungary in 1946 that had an daily inflation rate of 195% with prices doubling every 15.6 hours. Other notable hyperinflators were Yugoslavia in 1994 with prices doubling every 1.4 days, Germany in 1923 doubling prices every 3.7 days, Greece every 4.5 days (1944), and China every 5.6 days (1949).

One would hope that we are not headed for the same fate as Zimbabwe. Perhaps this November, by voting out of office members of Congress that are the worst spenders, we can strengthen the dollar and make it worthy of reserve status.
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Save Money for Tough Times

My guest writer is Sharon Smith.

Save money for a rainy day

Start saving for the "rainy day"

There is a crunch in the American economy and times are hard now. How is it possible to survive in this financial crisis? It is about time that you start saving for the “rainy day”.

Every family has an individual lifestyle to maintain. Here are a few tips, which can help you to save money, without compromising on the living standards.

  1. Do not waste food. Serve leftovers the next day. This will help in resisting the temptations of eating out.
  2. Tired of wearing the same old clothes? Instead of buying new ones, swap your wardrobe with close friends. This will freshen up your wardrobe to an extent.
  3. In case of errands, plan an efficient route so that all your tasks are done and you save money on gas too.
  4. Looking for some entertainment? Swap DVDs with friends or rent a movie. You can also go for a bargain matinee show.
  5. Prioritize your debts, if any. Pay off bills promptly. This will help you to maintain a positive credit score. Not paying off debts on time would hamper your credit scores. In the long run, if you ever accumulate debt, it will become difficult for you to consolidate debt with a bad credit record.
  6. Try to increase your incomes by pursuing your hobbies, or renting your garage.

There are various ways of saving money. All you need is the knowledge about what and how you are spending on. Once you know that, you will know where to cut your expenses as well. Saving money requires determination as you need to change some old habits, and also reconsideration of your priorities. Once you start saving, it is going to act as a boost. You would want your savings to grow and thus would start saving more.

Photo Credit: argo_72

Five 2010 Predictions

The Crystal Ball. J.W. Waterhouse.

The Crystal Ball. J.W. Waterhouse.

Only one of my five predictions for 2009 succeeded. I predict in 2010 that I will do better.

1. The Dow will drop below 6,750 FAILED

In October 2006 the Dow Jones industrial average crossed over the 12,000 mark briefly for the first time in its 112-year history. On 9 March 2009 the Dow Jones industrial average lost 80 points, or 1.2%, to end at 6,547.05, its lowest point since 15 April 1997.

2. Gas will go above $4 a gallon FAILED

The price of gas here in Kaysville, Utah is currently $2.47 a gallon. It is not unrealistic for gas to go over $4 a gallon next summer. I’m glad I run on CNG.

3. Republicans will gain 40 seats in the House SUCCEEDED

A more realistic prediction would be a gain of 20 to 30 seats but I am optimistic for a net gain of 40 or more seats.

4. Gold will drop below $750 an ounce FAILED

Since 1968 the price of gold on the open market has ranged widely, from a low of $252.90 an ounce on 21 June 1999, to a high of $1,023.50 an ounce on 17 March 2008. Indexed for inflation, the 1980 high of $850 an ounce would equate to a price of around $2,400 in 2007 US dollars. Gold passed $1,200 an ounce on 2 December 2009 but has dropped into the $1,100 range since. It is time for further declines.

5. Utah unemployment will drop to 5% FAILED

Currently the Utah unemployment rate is 6.3%. My prediction of 5% or less is optimistic but achievable considering the positive business climate, the need for services from a growing population, and a fiscally responsible state government.

More Predictions

My predictions are rather bold so I do not expect all of them to succeed. What do you think? Which ones are sure to fail or will any succeed? Do you have any predictions for 2010? If you have blogged about them consider putting a link to your post(s) in the comments.

Check out these predictions:

8 Predictions for SEO in 2010
Oscars 2010 Predictions – Early Oscar Predictions 2010
10 Apple Predictions for 2010
Earth2Tech Predictions: 5 Biggest Hurdles for 2010

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Central Bank Gold Reserves

The Top Twelve Central Banks Gold Reserve Holdings

The Top Twelve Central Banks Gold Reserve Holdings

With China and India acquiring gold it is interesting to see that the United States still holds almost eight times the gold that China does and more than fourteen times India’s reserves.

Of note is that the United States has 78% of its foreign reserves in gold. Of the countries listed below only Greece (91.6%), Portugal (90.3%), and the Slovak Republic (83.3) have higher rates. However, China has only 1.8% of its foreign reserves in gold. India is looking a little better at 6%.

Only the top 50 countries by gold reserves are listed below. Of course the IMF and a few others are not countries but they do own substantial holdings.

Click on the column headers to sort.

Country Tons1 Percent2 $ Billion3
United States 8,966 78.3 313.80
Germany 3,762 69.5 131.66
IMF 3,546 N/A 124.13
Italy 2,703 66.1 94.59
France 2,701 73.0 94.55
China 1,162 1.8 40.66
Switzerland 1,147 37.1 40.13
Japan 843 2.1 29.52
Netherlands 675 61.4 23.63
Russia 592 4.0 20.71
India 615 6.0 21.52
ECB 553 18.3 19.34
Taiwan 467 3.8 16.34
Portugal 422 90.3 14.76
Venezuela 393 36.5 13.75
United Kingdom 342 17.9 11.97
Lebanon 316 26.8 11.07
Spain 310 39.0 10.86
Austria 309 56.3 10.80
Belgium 251 40.4 8.78
Algeria 191 3.4 6.70
Philippines 170 11.2 5.94
Libya 159 4.3 5.55
Saudi Arabia 158 11.9 5.52
Sweden 146 13.5 5.10
Singapore 140 2.1 4.92
South Africa 137 10.4 4.81
BIS 132 N/A 4.63
Turkey 128 4.9 4.48
Greece 124 91.6 4.34
Romania 114 8.1 4.00
Poland 114 4.8 3.97
Thailand 93 2.0 3.24
Australia 88 7.0 3.08
Kuwait 87 18.6 3.05
Egypt 83 6.3 2.92
Indonesia 81 3.8 2.82
Kazakhstan 80 10.6 2.80
Denmark 73 4.0 2.57
Pakistan 72 17.5 2.52
Argentina 60 3.4 2.11
Finland 54 17.7 1.89
Bulgaria 44 7.2 1.54
WAEMU 40 10.6 1.41
Malaysia 40 1.2 1.40
Peru 38 3.2 1.34
Brazil 37 0.5 1.30
Slovak Republic 35 83.3 1.23
Bolivia 31 10.4 1.09
Ukraine 29 3.1 1.03

Not all countries are listed.

Notes

1. 1 tonne = 1.10231131 short tons.
2. Percentage share in gold of total foreign reserves.
3. 1 short ton = 29,167 troy ounces. Worth is calculated at $1,200 per troy ounce.

Sources

“International Financial Statistics,” International Monetary Fund, 2009.
Gold reserve“, Wikipedia.
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Arkansas Bank Charges 82,563% Overdraft Interest

Bad checkThe fuss lately over bank fees has left me mostly disinterested. After all, fees are what other people pay — those folks who don’t know how to manage their money. Wrong. When it happens to you then it isn’t carelessness any more. It’s just the law of averages — sooner or later the fee devil will get you.

Too Little Money

When I was raising a family occasionally the bank would call and tell my wife that our account was overdrawn but if she would make a deposit that day there would be no fee. Those were the days when you each had a checkbook and tried to keep the register balanced. When the bank statement arrived each month you would reconcile it and discover your true balance. It is much easier these days because you can check balances online. So no more overdrafts. It was never a case of too little money but just poor timing.

A few years ago I became debt free and began putting surplus funds into rewards checking accounts. This earned me an interest rate of between 4% and 6%. Once in a while I would change banks to earn a better rate but leave the old accounts open to move funds back again if rates improved at the old bank or worsened at the new bank.

Just Poor Timing

On the 5th. I moved a sum from an Arkansas bank, leaving just $1.00 in the account to keep it open. I have a company that automatically charges one of my credit cards $3.31 a month, billed on the 4th. Naturally I set up my Arkansas rewards checking account to pay this bill so that it would count as a transaction. On the 6th. the $3.31 was posted, leaving me $2.21 negative and triggering a $25 overdraft fee. On the 8th. I remember the automatic payment and transfer $30 back to the bank account which will probably not arrive until the 10th. or 11th. Not a case of too little money but just poor timing.

So far in summary:

4th Nov: $3.31 billed by company.
6th Nov: $3.31 posted in bank account.
6th Nov: -$27.21 new balance ($1.00 – $3.31 – $25.00).
8th Nov: $30 transferred to cover.
10th Nov: Overdraft cleared.

Back-of-the-envelope calculation:

6th to 10th = 5 days.
$25 / $2.31 = 11.31.
365 days / 5 days = 73.
11.31 x 73 = 825.63 = 82,563% APR.

There you have it. Even people who think they are reasonably competent money managers (me) can make a slip. It isn’t the bank’s fault, it was me who miscalculated. It wasn’t a case of too little money but just poor timing.

I think I want to own a bank.
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