Financial Intimacy – What is It and Why Black Couples Need It So Much?

BY: - 20 Apr '17 | Money

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Of the many intimacies that we attend to and invest our energy into throughout the course of a relationship, financial intimacy usually is not at the top of the list…despite its impact on the day-to-day functioning and operations of a household.  In order to have a healthy, trusting, and holistic marriage, though, we must pay close attention to how we are working on deepening financial intimacy.

I define financial intimacy as enjoying the benefits of full disclosure and communication around all things related to finances with a life partner.

And as African-Americans, whose collective experience in this country has been marked by the systematic destruction of family structure and the elimination of opportunities for socio-economic mobility, it is even more imperative and pressing that we engender financial intimacy of our relationships. The fate of our collective economic and familial structures depends on it.

The Heart of Financial Intimacy

While every couple will have their singular way of fostering financial intimacy, financial intimacy looks and moves with a particular rhythm. You will know financial intimacy when you see and hear the following:

Use of data to ground money talks

Instead of making generalizations and broad statements about the state of a couple’s finances, financial intimacy dictates that each partner speaks in specifics about a particular financial focus. Instead of saying, “We are spending too much money,” a couple demonstrating financial intimacy will say, “Over the past three months, we have spent $200 more than we budgeted on entertainment and electricity.”

Focus on solutions

When couples experience financial intimacy, they leave the “blame game” out of the communication. Rather than say, “we did not meet our investment goals for this month,” couples with a healthy level of financial intimacy may offer solutions to the problem such as enlisting the support of a financial advisor, increasing the number of times they work overtime, or opting for a “cash only” system in order to address money gaps.

Candor around emotions

Partners that benefit from financial intimacy feel free to express the range of emotions that accompanies financial realities. In addition to communicating happiness, optimism, and hope with respect to their financial dreams, couples with a strong foundation in financial intimacy do not shy away from expressing doubt, angst, disappointment, and frustration when it comes to money matters. They just do it respectfully.
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The Benefits of Financial Intimacy

Establishing financial intimacy will do more than just improve the state of your money; it will permeate all facets of your marriage. Here are but a few of the benefits of having a marriage that forges financial intimacy.

Decrease in Financial Friction

Once you have established financial intimacy, fighting about spending, budgeting, and roles/responsibilities is less likely to happen since fighting around money is usually a symptom of financial disconnect, miscommunication, and muddled understanding.

Shared Goals

When you establish financial intimacy, you and your partner co-construct a financial vision for the family. With a shared financial vision, you and your spouse are on the same page with respect to the long term and short-term goals for the family’s financial future. With shared financial goals, you create financial alignment, increasing the likelihood that each financial decision will be evaluated in its ability to help you reach your financial destination.

Peace of Mind

You don’t have to worry about screening calls, opening bulky envelopes. You also won’t have to cross your fingers when you use your credit card or debit card hoping that it will go through. Financial intimacy eliminates surprises and fear.

Legacy of Financial Responsibility

Lamar Tyler, co-creator and CEO of Black and Married with Kids always tells us, his staff writers, “You never know who is watching [brands, organizations, and companies] so always be on your A game.” If you have children, whether you notice it or not, they are internalizing your messages about money, relationships, and how both are to be handled in a relationship. Even if you do not have children, you are part of a larger community with young couples looking for positive financial models to emulate.

The more financial intimacy you have, the more likely that you will be debt free and achieve greater financial freedom more quickly. Period. When couples support their shared financial goals, they make better decisions about how to invest their money, how to save their money, and how to grow their money.

BMWK – Has establishing financial intimacy been a goal for your marriage?

About the author

Kara Stevens wrote 141 articles on this blog.

Kara is a motivational speaker, life coach, and founder of the personal finance and lifestyle blog The Frugal Feminista .

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Student Loan Help – 5 Ways to Protect Yourself from Untrustworthy Student Loan Servicers

BY: - 25 Apr '17 | Money

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I hate student loans.

Don’t get me wrong. I’m grateful for the education that those loans afforded, but I despise the paperwork, the hassle, and the never-ending interest which make paying off student loans such a herculean task. Student loans represent some perverse never-ending form of bondage.

And nearly 44 million Americans are in this financial bondage to a tune of nearly 1.4 trillion dollars.

Why They Aren’t Trustworthy

That’s why recent headlines regarding student loan servicers are especially infuriating. These companies with names like Navient, Nelnet, MOHELA, and Great Lakes Educational Loan Services act as middle men between the student loan lenders (federal government and private banks) and the borrowers. Their job is to collect and keep track of payments and help you select payment plans that fit your financial circumstances.

But often they are accused of providing terrible service, giving inaccurate advice, and making mistakes that affect borrowers financial futures. One particular egregious example is Navient.

A spin-off of Sallie Mae, Navient is the nation’s largest student loan servicer with more than 12 million borrowers and $300 billion in loans under management. On January 18th of this year, Navient was sued by the Consumer Financial Protection Bureau (CFPB) for systematically deceiving borrowers. In a CFPB press release, CFPB Director Richard Cordray charged that:

“For years, Navient failed consumers who counted on the company to help give them a fair chance to pay back their student loans. At every stage of repayment, Navient chose to shortcut and deceive consumers to save on operating costs. Too many borrowers paid more for their loans because Navient illegally cheated them and today’s action seeks to hold them accountable.”

Navient is accused of a wide range of misdeeds. The company, for instance, did not correctly allocate borrowers’ payments to their accounts. These errors were often not corrected unless a customer discovered and pointed out the error to Navient. The company failed to adequately inform consumers of the need to renew their enrollment in special payment plans causing the consumers’ monthly payments to jump by hundreds of dollars. Navient erroneously reported many borrowers to credit reporting agencies, causing damage to their credit reports

In a particularly egregious offense, the company encouraged struggling borrowers to seek forbearance on their loans instead of enrolling them in the more financially advantageous income based repayment plans. Forbearance allows borrowers to take a break from making loan payments but interest continues to pile up on the loan. Income based repayment plans, on the other hand, can reduce a person’s monthly payments to 10% of their income, making the loans much more bearable. Unfortunately, Navient made more money when customers entered forbearance as opposed to an income based repayment plan.

Navient created an uproar when they responded to the CFPB lawsuit by claiming, “There is no expectation that the servicer will ‘act in the interest of the consumer’”. In essence the company claimed that they were simply an agent of the lender (U.S. government or private bank) and had no fiduciary responsibility to work in the borrower’s best interest.

Ironically this runs in direct contrast to Navient’s marketing which claims that Navient is there to help you navigate the student loan process. The CEO even professed that, “At Navient, our priority is to help each of our 12 million customers successfully manage their loans in a way that works for their individual circumstances.”

So what can you do when your student loan service provider claims their job is to help you, but then fail to work in your best interest? What can you do when your student loan servicer can not be trusted?

1. Document and keep track of everything

It is critical that you document every encounter with your student loan servicer. Log all phone calls and keep detail notes of your conversations. Retain all email and snail mail correspondence between you and your loan servicer. Do not misplace promissory notes, bills or cancelled checks which could be used to identify errors made by your loan servicer. Finally, make sure to use certified mail with return receipt for all mailed correspondence.

2. Keep track of your loans

You can use the National Student Loan Data System to keep track of your loans. Keep all documents to show what payments you’ve made.

3. Check your credit report

It’s always a good idea to check your credit report to make sure no derogatory or inaccurate information has been placed on your report by a loan servicer. You can get a free copy of your credit report annually by visiting AnnualCreditReport.com

4. Understand your options

As seen with Navient, your loan servicer may not have your best financial interests at heart. That’s why you must understand the best financial options for your situation. You can visit the Consumer Financial Protection Bureau Repay Student Debt Tool which offers a step-by-step guide to navigating your repayment options. In addition, the US Department of Education Federal Student Aid website is full of information to help you make the best student loan repayment decisions.

5. Get help when needed

If you have a dispute with your loan service provider over a federal student loan, the US Department of Education has a checklist which you can use to try to resolve the problem. If you need further assistance, even after having tried to resolve the issue with your loan servicer, you can contact the Federal Student Aid Ombudsman Group which is a neutral and confidential resource to help resolve problems with federal student loans.

About the author

Alonzo Peters wrote 291 articles on this blog.

Alonzo Peters is founder of MochaMoney.com, a personal finance website dedicated to helping Black America achieve financial independence.

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