The Best Way to Manage Money As a Couple - Huffington Post The Best Way to Manage Money As a Couple - Huffington Post

Thursday, June 7, 2012

The Best Way to Manage Money As a Couple - Huffington Post

The Best Way to Manage Money As a Couple - Huffington Post

If you're in a relationship -- or have ever been in a relationship -- you know that managing money as a twosome can be tricky.

We get questions every day about how to divide money and who should pay for what. So when rather controversial research came out suggesting there's a whole new way to divide your money as a couple, we perked up. Especially since, in many traditional American households, the husband manages the investments while the wife manages daily budgeting and spending... and that, researchers say, might be all wrong.

The Findings

In the 2009 National Marriage Project report "The State of Our Unions," Ronald T. Wilcox, faculty fellow at the National Marriage Project and professor of business administration at the Darden School of Business at the University of Virginia, presents evidence that a non-traditional arrangement of a household's finances might be best: That is, the woman invests and the man determines the day-to-day budgeting and spending.

According to Wilcox, we develop feelings of ownership over household tasks, from who empties the dishwasher to who pays the cable bill. Because of this, couples tend to settle into a routine of who-does-what without necessarily considering who might be more effective at what -- and he finds that women would be more effective as the family investors for the following reasons:

1. Men Are Overconfident

"[Men] tend to trade stocks and bonds more actively because they are convinced they know what the next market movement will be," writes Wilcox. "What is likely to go up, and what is likely to go down. In so doing, they incur a host of transaction costs associated with trading -- from commissions and taxes to bid-ask spreads -- but do not pick assets any better than women."

But women, who are well-known to lack confidence around investing, make fewer active trades, so they're able to generate "risk-adjusted returns," meaning the returns they can't get when someone won't hold onto the stock long enough. In other words, by not trading all the time, their money tends to make more money.

2. Women Look at the Upfront Costs

Women are less likely to pay exorbitant fees with the confidence their investment will earn it back (or to pursue the expensive hot stock of the moment),  which means that they tend to select good, safe mutual and index funds with low fees. This is particularly important because the bulk of household retirement funds are invested in mutual and index funds, and we all know that retirement should be a core concern for women, who have an exclusive set of challenges.

3. Men Don't Take Advice

If there's a retirement planning seminar (or an introductory retirement article, for that matter), Wilcox writes that women are much more likely to take advantage. Because they don't tend to have the same innate confidence in their own knowledge and abilities as their male counterparts, they're more willing to both take and use investing advice.

4. Men Make Better Budgeters

"Men lose money at the stockbroker's office; women lose it at the shopping mall," argues Wilcox. Thanks to their usual appetite for riskier financial tasks and disinclination toward household budgeting, he says, men might actually be more conscientious, effective holders of the purse strings.

"Even if they don't enjoy doing it, it is that natural aversion to the activity that is likely to lead to stronger household balance sheets," he explains. In other words, because they like to get in and out, men, for example, may not spring for a cute new sponge or fresh flowers at the grocery store, thereby driving down your bill.

(And he may have a point: Overspending is one of the seven mistakes women make more than men.)

So, Who Should Do What?

We've heard before that women could make the best investors, but the idea that men might be better-suited to household budgeting is a new one.

In the same report, Jeffrey Dew, faculty fellow at the National Marriage Project and assistant professor of Family, Consumer, and Human Development at Utah State University, writes that his new research shows disagreements about money to be the most accurate predictor of divorce, and when a spouse doesn't believe his or her partner handles money well, reporting marital unhappiness is more likely.

In fact, a May 2012 study sponsored by TD Ameritrade, "Till Debt Do Us Part," showed that feeling like your partner spent money foolishly increased the likelihood of divorce 45% for both men and women.

But forget men, women and gender for a minute: It stands to reason that if each of us took on the financial tasks for which we're best suited (and "none" is not an option) within our relationships, we would be happier overall.

What would you be best suited to doing -- and what would you assign out to a partner?

More From LearnVest

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LearnVest is the leading personal finance site for women. Need help managing your money? Our free Money Center will help you create a budget. Our free bootcamps will help you take control of your money, cut your costs or get out of debt. And our premium financial plans--managed by LearnVest Certified Financial Planners--can help you chart a course for the future you want.

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George Osborne should slow pace of financial reform, MPs warn - The Guardian

George Osborne should slow down his radical programme of financial reform or risk failure, the treasury select committee will warn on Friday.

The chancellor's financial services bill, which hands the power to supervise financial institutions back to the Bank of England and creates a regulatory body to protect savers, is about to move to the House of Lords.

The cross-party committee of MPs, chaired by the Conservative Andrew Tyrie, has already secured a number of amendments to the bill. But it has taken the unusual step of publishing a report detailing the changes it believes must be made if the bill is to fix the shortcomings that led to the 2008-09 financial crisis.

"No explanation has been given for the rush to produce the bill and place it on the statute book by the end of the year. Better to take a little more time and get it right, than rush it," said Tyrie, adding: "The financial services bill is the most important overhaul of financial regulation ever undertaken in this country."

The committee is particularly concerned that the court that oversees the work of the Bank is too weak to constrain its powerful governor.

"Many people argue that the current corporate governance at the Bank is defective; we agree," said Tyrie. "What's being proposed, even with the amendments as a result of committee and parliamentary pressure, risks replicating those defects. There is more to be done."

Tyrie would like to see the court handed a statutory responsibility to carry out reviews of the Bank's performance, with the select committee given a veto over the appointment of future governors.

The Bank recently announced several reviews of its performance during the financial crisis, following intense pressure from the committee – though some observers have complained that they are too narrow in scope to constitute a comprehensive overview.

Tyrie and his colleagues are also calling on the Treasury to clarify what powers the department would have to overrule Sir Mervyn King and his successors.

Former chancellor Alistair Darling's autobiography revealed his concerns about whether he could command King to act at the height of the banking crisis. Darling also recently described the governor as an all-powerful "sun king".

Osborne came to power determined to dismantle the so-called tripartite system created by Gordon Brown, in which the Financial Services Authority, the Bank and the Treasury shared responsibility for safeguarding the stability of the banking system.

Wash. audit: Allocate more money to classrooms - KOMO News
SEATTLE (AP) - Washington state school districts could do a better job getting more of the $12 billion spent each year on education into classrooms, where it will make the most difference, a new state audit said.

The performance audit released Wednesday included detailed comparisons among school districts of similar size, as well as suggestions about how some are spending more money in the classroom than others.

The audit noted that moving just one percent of school spending from administrative offices to the classroom would be enough to pay for more than 1,000 teachers statewide.

Among the cost-saving suggestions were: Buy fuel for school buses in bulk, use more USDA surplus food in the lunchroom, and look at having some services provided by the private sector.

It also suggests cutting staffing dollars by making such changes as hiring licensed practical nurses instead of registered nurses for school infirmaries, sharing costs with neighboring districts, and contracting with the state or education service districts for some things.

Although many of the cost differences among districts involve choices, some are out of their control, such as how many special education students they serve.

The state auditor decided to do this performance review because taking a closer look at education spending has been repeatedly identified by citizens and lawmakers as a high priority, said department spokeswoman Mindy Chambers. About 43 percent of the state budget is spent on K-12 education.

Auditor Brian Sonntag wanted the report to be practical for school districts and informative for lawmakers, while not trying to offer a one-size-fits-all approach, Chambers said.

The audit dings state school officials for overstating how much money is spent on classroom instruction by adding in a second number called teaching support.

The approach implies Washington spends 70 percent of school dollars in the classroom, which would be more than any other state in the nation. The federal government paints a different picture.

Washington and 11 other states spent about 60 percent of school dollars in classrooms, according to a 2009 comparison by the National Center for Education Statistics. Another 18 states spent more and 20 spent less. Washington's numbers have improved slightly since then, but no more recent national comparisons are available.

The rest of the money goes to transportation, food, nursing, counseling, outside help for special education students, administration and a variety of central district office functions.

The audit recommends the Office of the Superintendent of Public Instruction improve its transparency by taking the federal approach and use just the dollars that pay for teaching when it reports expenditures for classroom instruction.

Superintendent of Public Instruction Randy Dorn responded to that section of the audit by saying the office was already doing this on some reports and would look into the possibility of changing others.

The audit also urged the office to maintain the database the auditor's office created for the purpose of the study, saying it would help districts save more money if they could continue to see their operations compared to their peers.

Dorn said he would discuss the idea with his department's data management committee and see if they think it would be worthwhile to find the money to keep track of this information in the future.

School reform advocate Liv Finne commended the auditor's report for its wealth of information and practical advice for school districts.

Digging a little deeper and reading between the pages can reveal a lot about the choices individual school districts are making, said Finne, director of the Center for Education at the Washington Policy Center.

For example, she found it particularly interesting that Seattle Public Schools spends 59.7 percent on teaching, while many neighboring districts push a lot higher percentage of their money toward the classroom.

The Bellevue School District, for example, puts 65.6 percent of its dollars into teaching and Lake Washington directs 65.5 percent toward learning.

"That instruction number is very important," Finne said. "It reflects who is influencing allocation decisions in the district and what the priorities are in the district. Clearly they're not making instruction the priority."

She notes that most private schools and public charter schools do an even better job at this, because they do not have much of a central office staff to support and private schools do not have to pay for transportation.

Money looming even larger over Nov. election - CBS News

(CBS News) WASHINGTON -- President Obama is halfway through a two-day fundraising swing through California.

His trip underlines the importance of money in the 2012 campaign.

It's also being criticized by Republicans who say the president is spending too much time with celebrity Democrats.

The money-raising trip took him to San Francisco and Los Angeles, two towns where he hasn't been a stranger in recent weeks and months, spending plenty of time with the wealthy and famous in the entertainment and tech communities.

But his campaign tweeted Thursday that 98 percent of its donations in May were less than $250.

Either way, it's all about the money.

Mr. Obama got a warm welcome from campaign donors in the Los Angeles gay community Wednesday night, a group he considers crucial to his re-election prospects.

"I could not be prouder of the work we've done on behalf of the LGBT community," Mr. Obama said.

Full coverage: Election 2012

During his speech, he ticked off accomplishments under his watch, such as ending the war in Iraq.

But he also warned the audience about what's ahead during the campaign, and why their donations matter, saying, "You're going to see hundreds of millions of dollars in negative ads, because the other side's not offering anything new."

To build a war chest that would enable him to counter those ads and run his campaign, Mr. Obama is spending two days on the West Coast to raise an expected $5 million.

He will have done 153 fundraisers since formally declaring his candidacy for re-election a little over a year ago - nearly double the number President Bush had done at the same point in 2004.

With the majority of outside super PAC dollars going to Republicans, raising money will be crucially important for Democrats in this election cycle.

In the Wisconsin recall election, unions spearheaded the effort to unseat Gov. Scott Walker after he successfully limited their power. But the union effort to get out the vote was overcome by the GOP advantage in money and TV advertising. Walker raised $30 million. His challenger, Milwaukee Mayor Tom Barrett, raised only $4 million.

Rep. Steve Israel, D-N.Y., chair of the Democrats' campaign committee, warned that the Wisconsin results should be "a wake-up call" that the party needs money for TV ads to compete with the super PACs.

A California political power broker once put it this way: "Money is the mothers' milk of politics."

Four years ago, candidate Obama outspent his Republican opponent, Sen. John McCain by more than two-to-one - $730 million to $333 million.

To see Bill Plante's report, click on the video in the player above.

American Financial to refinance $200 million in debt - The Business Journal

American Financial Group  Inc. plans to refinance nearly $200 million in debt, it said Thursday in a Securities and Exchange Commission filing.

American Financial (NYSE: AFG) said it plans to issue senior notes and use the money it borrows and cash on hand, if necessary, to pay off $112.5 million in senior notes. It pays a 7.5 percent interest rate on those notes, which are due in November 2033. American Financial also will pay off $86.3 million in 7.25 percent notes that are due in January 2034.

If it has money left over from the debt offering, American Financial plans to pay off part of the $115 million in 7.1 percent debt that is also due in 2034, it said in the filing. It could also use additional money it raises for general working capital purposes.

The downtown-based insurer didn’t say how much it plans to raise in the debt offering, what the interest rate will be or when it will make the offering. It will provide that information later.

American Financial’s stock rose 17 cents, or 0.4 percent, to $39.42 in mid-morning trading Thursday.


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