Personal Finance Topic #274 - 7 Gems of... | Gather

by Jeff S.

Member since:
August 16, 2008

Over the last few years, I've been posting articles on how to save money, get out of debt, save on income tax, and become wealthy. ? In this post, I will offer another quick summary on personal finance concepts and relating with money. ?Understanding these few gems of wisdom will keep your financial life lean and healthy:

7 Gems of financial wisdom - relationship

1. Never cosign for someone else?s loan ? The reason lenders require cosigning is that they believe the loan will not be paid back. Not cosigning is tough love, especially if the borrower is your child or your parent. This extends to mortgage, student loans or car loans
2. Never lend money to or borrow from someone you care about ? Lending or borrowing between two people who care about is called enabling. Enabling is not helping either party. If one has the money, simply give it.
3. Never start a partnership in business ? Most partnerships start well, but don?t end that way. Unless you have clearly defined exit strategy, don?t do partnerships.
4. Teach your child to be financially independent ? Teaching financial independence means modeling good behaviors with money. Discussions about saving, spending, using credit, retirement contributions, insurance, and other financial matters should be held frequently and when opportunities present themselves.
5. Commit to a monthly budget process with your mate/partner ? Only with two people agreeing to a binding set of budget numbers and communicating to negotiate if the money in one category is exceeded, can they reach their long term goals and aspirations.
6. Never link finances or ownership if two are not married ? This is a form of partnership. If relationship sours, then money problem and possession problem will be compounded
7. Never have separate checking accounts if two are married ? Separate checking and credit card accounts mean secrecy. If one does not know what the other is doing, there may be an unpleasant surprise in store for one or the other

Most of these ideas are common sense stuff, but if you are alert with these ideas, you will do well. Good luck in your relationship.

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