My Husband Needs to Make More Money

Q: Thank you for writing about the fact that sometimes a person’s financial troubles are due to underearning. I am a stay-at-home mom with three children and my husband does not make enough money. As a result, we aren’t saving anything for retirement and college and in fact we’re going deeper into debt every month. He does not understand how much kids or for that matter life costs where we live. His solution is that if I want more money, I should go back to work, but that was not our deal. How do I get him to realize that he needs to generate more income?

A: Hold your horses.

You may be right that your lives would be easier if your husband made more money, but that does not relieve you of the responsibility of living within your means. The fact that you’re not saving and piling up debt shows very clearly that you’re not taking that responsibility seriously.

You have choices about how much to spend, and if you’ll look around in your community you’re likely to find families surviving on a lot less than your family makes now. You may have to make sacrifices, get creative and stop keeping up with the Joneses, but you can do it.

If you aren’t willing to make that effort, then your going back to work may be the only solution. It doesn’t matter what “deal” you made back when you decided to stay at home; that was then, this is now. The agreements couples make about money often have to change over time as circumstances change. If you demand a lifestyle for your family that exceeds your present means, then you need to help finance that.

Either way, you may find that your taking responsible action has a positive effect on your husband’s earning ability.

Right now, he may feel like every dollar he earns goes into a black hole; why should he work harder or look for a new job if the extra money he makes will disappear into that maw? If you switch gears and become an effective money manager, he may come to believe the extra effort is worthwhile.

In any case, you need to stop rowing against your husband and start rowing with him. Lay off the poor guy, and take care of your end of things.

Should you check your safe deposit box?

Dear Liz: Please remind your readers to regularly check on their safe deposit boxes, particularly after a bank merger. Our bank was recently taken over by a larger one, and I could not believe what happened. Even though I have an active checking account and am a “preferred” customer, the bank claimed that my box had been closed and no one could find my signature card (which I had signed within the last year to access the box).

Rather than contact me, the bank was about to turn the contents over to the state. I was treated poorly and was forced to identify contents of my box in front of bank employees.

I did not think bank employees were ever supposed to be allowed to view contents of boxes, and I am extremely distressed and horrified by the entire experience. But if I hadn’t checked, I could have lost precious family heirlooms. If you have any suggestions as to how to make banks more accountable for these types of errors, please do let me know.

Answer: Banks are supposed to try to contact customers before turning a safe deposit box’s contents over to the state unclaimed property department, but as you’ve discovered those efforts sometimes fall quite short.

You can make a formal complaint to whatever state or federal agency regulates your bank. You can call the bank and ask, or visit the Federal Financial Institutions Examination Council’s website at http://www.ffiec.gov and click on “National Information Center” to access a searchable database. You also can contact your lawmakers and push for legislation that would hold banks more accountable for this kind of error.

Employers’ Retirement Seminar May Be a Wise Time Investment

Dear Liz: No question here, just a suggestion. I think you should emphasize to your readers that they should avail themselves of retirement and financial planning seminars that may be offered by their employers early on in their careers.

That way, they’ll have the maximum time possible to make the right decisions and allow their investments to grow.

I finally went to one of my employer’s retirement seminars at age 40, after working for the company for 16 years. Although I found out that I was not too far off track, there were definitely things I could have done differently to maximize my retirement benefits. As you know, timing is everything in investing.

Answer: Actually, “time” is everything in investing. The earlier you start and the longer you stay invested, the better as you now know.

Your point about attending employers’ education seminars is well taken. Many people put off investing for retirement or aren’t comfortable making decisions about how to invest, and those seminars can help them get over those barriers. A few hours invested in one of those seminars can pay huge dividends.

How to Buy Stocks for Children

Dear Liz: I’d like to buy my children shares of stock to get them interested in investing. How do I go about this?

Answer: It’s not as easy as you might think.

Children under 18 generally are not allowed to own investments in their own names. As a result, you must decide first how to hold the shares: in a custodial account, in a joint account with them or in your own account.

Keeping them in your own name may be the best option if you’re concerned about future college financial aid, because the other two choices could count heavily against them in the federal aid formulas.

You also have many alternatives when it comes to buying the shares  always with a variety of fees, charges and options to watch.

You can buy your shares through a brokerage, but you may face commissions, minimum account balance requirements and account fees.

If this is a one-shot investment or you’re able to commit only small amounts of money at a time, a better option might be ShareBuilder Corp., a low-cost online broker, which has no minimum balance requirements or account fees.

ShareBuilder charges $15.95 for single trades or as little as $1 per trade in its automatic investing program.

You also might consider buying directly from the company that issues the shares.

Hundreds of companies  including many your kids would know, such as Coca-Cola Co., Mattel Inc., McDonald’s Corp. and Sony Corp.  sell shares directly to investors. Again, minimum purchase requirements, account fees and commissions may apply.

DirectInvesting.com, a website that provides direct investment enrollment services for hundreds of companies, can get you started.

All these options are electronic, so you won’t get a stock certificate you can wrap for holiday gift giving. If that’s what you’re after, you might check out the options at OneShare.com, a site that specializes in selling single shares of stock as gifts.

OneShare.com sells shares from about 130 companies; you pay the cost of the stock, plus transfer fees and framing that add about $90 to the cost of each share.

It’s not exactly a frugal option, but your kids will get real stock certificates to hang on the wall. They’ll also get annual reports, proxy statements and all the other paperwork that comes with being an investor.

Contributing to Ex-Employer 401(k) is Not an Option

Dear Liz: I’m working for a new company and they don’t have a 401(k) plan. Until they put one in place, can I put money into to my prior company’s 401k plan?