This cupcake almost singlehandedly led me to change my opinion on weddings

I don’t wanna sound blasphemous, but I hate weddings. They’re such an elaborate waste of money, I just can’t stand them.

According to CNNMoney.com, the average wedding cost $21,814 in 2008 down from $27,490 in 2007.

You got $22,000 burning a hole in your bank account, then buy me a high quality diamond. Something I can look at and admire on a daily basis. I want women whose weddings cost tens of thousands of dollars to be so daggum jealous of me, they [fill in something debilitatingly clever here].

Now, don’t get mad. I wouldn’t judge you for spending ridiculous sums of money on your wedding. I’d only judge you if you spent someone else’s money (e.g. American Express, your indigent mother) on your ridiculous wedding.

A while back, my best friend really ticked me off when she announced she was getting married to her on again off again boyfriend and wanted me to be her maid of honor. I don’t really get involved in people’s business, so it wasn’t the groom that bugged me. It was their rocky relationship. The problem was that she asked me to incur non-refundable expenses for an event that was unlikely to occur.

I realized I’d gotten off easy when a friend told me she couldn’t go with me to Ireland, because she couldn’t afford it due to a wedding she’d committed to. Both her and her son will be in the wedding.

Here’s the rundown.

Are you essing me?!

Over $2,200 for somebody else’s stuff!

It’s not fair!

Most people aren’t like me. You might really enjoy attending weddings or being in them. Plus, you may not want to completely disappoint your loved ones by selfishly refusing to participate in costly activities that are important to them.

If you care for the person who asked you to either attend or participate in their wedding, and you’re loaded, then it’s perfectly okay to be a part of their big day/week.

If that’s not the case, here’s what I suggest. Instead of responding with, “Ain’t nobody got no money!” when you’re asked to be a member of the wedding party, stay calm.

Try this four step process for dealing with the situation.

Step 1

Understand your friend may be a bit jaded when it comes to the expenses you’ll incur. She is spending $22,000 on a wedding after all. Your $2,250 represents mere pennies in her eyes.

Step 2

Find out how much the event will cost you. Use the budget above as a starting point. To share in this glorious occasion, you might have to sell something or take on a second job or push off motherhood for another year or take a semester off college. But it’s best to know this upfront.

Step 3

If you find you simply can’t afford what your friend is asking of you, then tell her. Perhaps she’ll be open to reconsidering her wedding budget. Presumably, you’re a close friend if you’re asked to be in a wedding.

Step 4

There’s nothing wrong with saying no if you don’t have the money. Under no circumstances do I advocate going into debt to be a part of a friend’s wedding. She should understand that you function in a world of limited resources. If she can’t comprehend that, then it’s fine to go back to the preamble to Step 1:

“Ain’t nobody got no money!”

This article was featured in the Carnival of Personal Finance #245 – “Dollar Doodles” edition at Budgets are Sexy.

Has a friend ever asked you to participate in an event that you either couldn’t afford or just didn’t want to spend the money on?

Photo credit – Sugarbloom Cupcakes

Now that I’m back from vacation, I’ve been pondering a blog post that’ll knock your socks off. The financial argument I’m about to put to you is profound, earth shattering, mind blowing even. It is radical. I might go so far to say that it’s soul shifting.

Let’s talk about life insurance.

Wait! Don’t leave. This is good stuff. Just hear me out.

I’m not going to bore you with complex life expectancy data from actuarial tables. Or get into the differences among term, whole, variable, and universal life insurance policies. I can’t. I’ve done next to no research on this topic. I trust you have the good sense to do it yourself should you consider what I’m suggesting.

There are occasions where I have no choice but to challenge standard financial advice. If you’ve read a few personal finance blogs, watched the Suze Orman Show, listened to a Dave Ramsey podcast, or browsed through Money Magazine, then you’ve likely been advised to pass on life insurance if no one depends on your income.

I don’t have a term life insurance policy for precisely that reason. Plus, I figure if I’m dead I’ve got my own problems to worry about. The living can figure out how to feed themselves. I’m joking…kinda.

But seriously, I believe the decision to buy life insurance deserves more thought. My closest friend was diagnosed with breast cancer when she was 27 years old. Shortly afterwards she suggested I obtain life insurance because a cancer diagnosis could severely limit, or eliminate, my chances of obtaining non-employer provided life insurance. I disregarded this suggestion as pure foolishness because I wasn’t married, I didn’t have any children, and there was no one else who’d hurt financially if I was to leave here.

Five years later, another close friend is diagnosed with soft tissue sarcoma at the ripe old age of 37. As far as I knew, both of my friends were healthy. Now, I’m thinking. What if I have children? What if I get married? What if I’m stricken with a major illness that’d render me uninsurable before I get married…before I have children? Term life insurance isn’t that expensive for a young, healthy individual. Could I spare a few dollars to secure the financial futures of my nonexistent husband and offspring?

But enough about me. If you’re planning on getting married or having children, do you think it’s worth it to jump the gun and purchase life insurance in anticipation of these major life events? If you decide to get the insurance, your risks are you’ll have wasted money on an unnecessary financial instrument when you die an old, ashy, childless, spinster. If you decide against it, your decision could cost your future family their financial security.

What are your thoughts?

The other day, I was casually chatting with a family member. She is a financial dunce who repeatedly serves up material for this blog. If you’re a regular reader of You Have More Than You Think, then you already know this particular family member’s name. If you’re not, her name is Larissa, and I will be referring to her as such going forward.

Since I’m a personal finance nutjob, I anxiously await the opportunity to bring up the subject of money in nearly every conversation. Doesn’t matter how inappropriate. If an opportunity doesn’t present itself, I create one. It’s what I do.

So, Larissa and I were talking about eeeeh, something, when I asked her if she had homeowner’s insurance on her paid for home. Her response was a lackadaisical, “Oh, I forgot to renew it.”

My response was, “Are you *expletive* me?!”

Look, this is beyond stupid. Perhaps you were expecting me to drone on about how buying quality goods is frugal. Forget about that cheap watch you got in AnyChinatown, USA that fell apart only days after you bought it. That’s child’s play compared to inadequately insuring your assets.

Your primary residence is one of the most important assets you’ll ever own. If you have a mortgage on your property and you fail to make the payments, you’ll find that the mortgagee (the lender) will pay the homeowner’s insurance for you. Why? Because they know how important it is to protect their asset.

Paying off your mortgage and eliminating the lender’s interest in your property is a wise financial move. However, you must take on the responsibility of making sure your asset is protected at that point.

You’ll likely spend decades paying off your mortgage. Decades! Throughout that time, you’ll probably pay three times the purchase price of the home after factoring in interest. If your home was destroyed while you didn’t have insurance, here are your options:

1. Renting
2. Owning….again
3. Squatting with a loved one
4. Homelessness

For some reason, I find the first two options to be the most offensive. You’ve already paid for your residence once. And you’ve likely done this over many, many years.

I don’t care if you live in Miami, FL and your homeowner’s insurance policy expires on July 15th. If you have to sell your A/C unit to renew your homeowner’s insurance, then so be it. Sweat it out.

Although far more acceptable, going without health insurance and disability insurance is equally stupid. But I’ll save that for another day.

What are some of the dumb strategies you’ve used to save money?

The following is a guest post from Tiá Jones, MBA.

Picture it. On a blistering cold evening in the winter of 2005, I received a frantic phone call from a family member whose loan application had just been denied.

To protect the indigent, let’s refer to this family member as Larissa. Unable to obtain law school financing due to her poor credit, Larissa contacted the only relative (albeit a single mother of a one-year old son) who could solve her problem.

Other family members were undesirable credit risks, i.e, plagued by bad credit. I was the only one stupid financially stable enough to cosign a student loan of a whopping $40,000. With a 7.5% interest rate, no less.

Fast forward to 2009. Still a single mother, but a newly minted MBA, I was all fired up to purchase my first home. With a 741 FICO score, decent savings, and preapproval letter in hand, I found the perfect place. I even managed to negotiate $14,000 off the asking price. I paid for inspections, gave my landlord notice to vacate, then packed up my belongings and put them in storage.

Days before closing, I discovered there was one stipulation remaining on my file. Out of the blue, this $40,000 student loan – which, according to my inexperienced loan officer, would be a non issue – stood between me and my dream home. After a meticulous review of my file, in the same fashion and passion as Suze Orman, the underwriter sent me an e-mail:

“YOU ARE DENIED! YOUR DEBT-TO-INCOME RATIO IS TOO HIGH!”

There is a happy ending to this story. At least Larissa can call herself a lawyer now. I, however, am forced to look for an apartment rental because my son starts school in 8 days.

I won’t put you to sleep with all the gory details of this financial blooper. I fear the final tally will cause me to lose my lunch, but here’s a rough sketch of what it’s cost me.

So if my story wasn’t enough to convince you, I want to provide the top 4 reasons you should never ever cosign a loan.

1. People who need cosigners need them because the lender doesn’t think they’ll repay the loan. When have you heard of anyone with a good cosigning experience?
2. No one is worth risking your financial future (maybe your kid or spouse, but – eh – maybe not).
3. Cosigned debt is 100% your debt. If the primary borrower defaults or dies, you’ll be the one paying for it.
4. As evidenced by my experience, this debt is factored into calculations that determine whether you’ll get approved for a mortgage.

If you found this article after cosigning someone else’s debt…I feel sorry for you, but here are some things that you can do.

1. Take out a term life insurance policy on them. Their death doesn’t release you from paying off the debt.
2. Stay on them. Constantly remind them to renegotiate, refinance, and remove you off the loan.
3. Check your credit score. The loan may affect your ability to purchase large items such as a car or a home.
4. Call the lender. Find out what can be done to release you from the loan.
5. Make sure they’re making the payments on time. You might have to step in and make the payments to save your credit.
6. Don’t kill them. I thought this was worth mentioning after number 1.

Sometimes helping others achieve their dreams may cost you your own. Spare yourself the trouble, and learn from my mistakes.

Tiá Jones is President of New Legacy Services, LLC, a small business coaching and consulting firm.  Her clients include YouHaveMoreThanYouThink.org and SistersSpace.com.  When she is not trying to change the world through entrepreneurship, she blogs about event planning and all things pretty on TheHostessChick.com.