I am happy to present this week's Let's Talk Money guest - Derek from Life And My Finances. Derek's personal finance blog was one of the first blogs I began following back in February when I started this blog. As he mentions below, he loves to talk about finance and enjoys sharing his knowledge through his blog. Let's take a look at Derek's personal point of view as it relates to money.
Please provide a brief introduction about yourself and your personal finance blog including when you created your blog. If comfortable, please share if you are married and how many children you have.
My name is Derek and I am the current owner and operator of Life And My Finances, a blog that encourages others to ditch their debt, learn how to save money, and gain wealth!
I graduated from college in 2008 with a Finance degree, but with all the banks closing down from the sub-prime mortgage crisis, a job in my desired field just wasn't happening. While I did find work that I enjoyed, I still found myself talking about finance all the time; so much so that my poor wife finally broke down and informed me that I needed to find a release for all of my financial mumbo jumbo or she was going to lose it. A few days later, the blog was born (on August 28, 2010). :)
Since I'm a natural introvert, I really enjoy hopping onto my computer and whipping up some articles without any face to face contact whatsoever. On the flip-side, I do love to help people, so now I get to impact the way people think about money without all of the awkward pauses in the conversation! It really has been great and I absolutely love what I do in the blog world.
How did your mom and dad spend money and how did that affect you?
My parents are definitely savers. I think they've only had one mortgage in their entire life and all of their other purchases have been made with cash. I believe that their example has affected me tremendously because I have seen what can be achieved with patience and careful spending.
I am the youngest of five children. My parents earned a lower-middle class income, but because they lived life according to a budget, they can now say that they've put all five kids through the private school system and college; plus, they have a house and a vacation home that's completely paid for!
I figure that if my parents could achieve that level of financial success with five children early in life, imagine what my wife and I could accomplish since we haven't started a family yet!
What is your view point regarding money? Money is meant to be saved? Money is meant to be spent?
While I do believe in saving money, I think that a life cannot be healthy without a little bit of both. My natural tendency is to save and I was pretty good at it, but when I met my wife (a natural spender) I realized that I wasn't really living life! I was 22 years old and still didn't know how to pay for a meal without walking up to a cash register.
Money should be saved for an emergency and also for long-term retirement, but if you've got those two things covered and you don't have any debts, don't be afraid to enjoy yourself once in a while by spending a few bucks. Remember, memories are priceless.
Do you think joint or separate checking accounts are appropriate when married, and why?
I am a big believer in joint checking accounts as a couple. If two people get married and they still keep their money separate, they may as well be two buddies that just happen to live under the same roof.
Sure, separate accounts might eliminate a few of those early fights in a new relationship, but it takes away from the closeness that a couple can feel when they sit down and decide where they are going in life, and how they are going to spend their money in order to reach their goals together.
How important is planning for retirement to you?
Planning for retirement is relatively important, but I don't think all the plans need to be etched in stone. My wife and I are investing about 15% of our income in our company 401(k) accounts, and we are also making additional payment on our mortgage so that we can own our house free and clear in just four years (instead of the typical 30). We can't tell you exactly when we're going to retire, but we're taking action today so that we can free up plenty of options in the future.
What is the most expensive item you have ever purchased?
Besides our house, I think we just bought the most expensive thing a couple of days ago. Since our Jeep was eating up our gas money, we decided to buy a 2008 VW Beetle. The price-tag: $8,900 and we paid cash. I don't know about you, but I think a car that's completely paid for is incredibly fun to drive!
If you suddenly received $500,000 as a gift and you were already debt free, what would you do with it?
I always said that if I ever won a large sum of money, I'd immediately put it into an interest-bearing account and sit on it for a year. Too often, people receive a large sum of money and figure that they'll never be able to spend it all, only to discover that it vanished soon after they received it, and many of the purchases they made were completely foolish!
Even though I consider myself to be financially wise, I still think that my emotions could get the best of me. By placing the money into an account and thinking about what to do with it for an entire year, my decisions are no longer emotional and I'd be much more prone to spend the money intelligently (that is, if I spent any money at all).
If you'd like a real answer to this question.... I think I'd sock it away with my other savings and live off the interest. Retirement at 26 years old sure would be sweet! :)
Derek, thank you very much for being today's interview guest and for taking time out of your busy schedule to talk about how you and your wife handle money. It gives everyone an opportunity to learn even more about you.
Source: http://tacklingourdebt.com/2012/04/25/lets-talk-money-series-derek/
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