Poria asks: How do you inquire about your potential spouse’s financial health (assets vs. liabilities) without being too invasive, especially if it's earlier in a relationship? Should I judge her based on my observation of her spending habits?
Observations are key to signaling all sorts of red flags – including financial ones - early on in a relationship, but there’s nothing quite like direct communication. It’s fine to keep your eyes open to certain questionable behavior, such as overspending, tipping poorly or “whipping out a different credit card to pay for each meal,” says David Weliver, founder of MoneyUnder30.com, a financial blog, and a recovered “debtaholic.” But if you really want to learn the truth about her financial health, best to address the issue head on, albeit gently.
“I would broach the subject casually by mentioning steps you, yourself, have been taking to save extra, learn to invest, or stick to a budget,” says Weliver. Break the ice with the following lines: "Let's go to the park instead of a movie today. I've been watching my spending each week so I can pay a bit more towards my college loans; it's so hard to get ahead, isn't it?"
A conversation about college may actually unveil quite a bit about debt levels and student loans, which are proving to be an even greater financial disturbance than credit cards.
Another strategy: Talk about your personal and professional goals, which can open the door to a deeper conversation around money and how prepared each of you is to afford those goals – whether that’s going back to school, starting a business or buying a home. If you’re not sure where to begin, Weliver offers the following question to help launch that discussion: “What's something important that you want to do or see in the next five years?”
LaRue emails: Please suggest the best way to get car insurance for our son. He just got his license. Is it best to just add him to our existing insurance?
Your instincts are right. Adding your teen driver to the family’s existing car insurance policy is often the most affordable way to go since rates are partly determined by one’s credit. Without any credit history, a teenager is likely to face much higher rates than older, experienced drivers.
Still, adding a teen to your policy can carry some sticker shock. “The rate is likely to double,” says Doug Whiteman, insurance analyst at Bankrate.com. “Insurance companies charge more to cover teenagers than any other class of driver because, among that age group, accidents are so common,” he says.
To save, take advantage of “good student discounts,” available at all top 10 auto insurance companies, including State Farm, Allstate, Geico and Progressive. To qualify, students need to have a B or higher average at school, be on honor roll, or place in the upper percentiles on standardized tests. Discounts average 20%, but some agencies like Liberty Mutual will knock as much as 30% off a family’s policy. “The thinking is that if a teen is getting good grades, they’re more likely to be a cautious driver,” says Whiteman.
Send Farnoosh your money questions on Twitter @Farnoosh or by emailing her FarnooshFinFit@yahoo.com.