Its never too soon to agree with your spouse on how you spend money.  There was a study that I read a long time ago that said the number one source of tension in marriages in a random sampling of couples was (Dum dum dum) MONEY!  Ok, so who here is surprised?  I know I am not.  Considering most of us Americans have a large load of debt so when you bring two people with debt together (or even one person with debt and one without) there are bound to be some hard money discussions.  The best time to figure out finances is before you’re married when both of your money is separate.

I’m getting married in August but we have had relatively combined finances for quite a while.  Admittedly I came into the relationship with more debt than Lauren did.  The one main thing is that we both want to get out of debt but not become misery in the process.  That being said, I know quite a few couples who just cannot figure the money thing out.  There is a one huge lesson to learn here: if you are getting married, talk about money beforehand, it is never too soon.

I have had a few people write in asking about the new sponsor on the left that replaced Prosper.  From John in Portland:

“Hey Jesse, aren’t you a financial blog? Whats with the 24 hour fitness sign/sponsor?”

After my new years resolution article where I encouraged everyone to  follow through on their resolutions including getting fit both physically and financially I received an email from a VP at 24 hour fitness asking me about my experience.  I responded that I was very happy with my local 24 hour fitness sport and things went from there.   I do not personally plug companies with graphic affiliate ads unless I believe in them (as I still do with p2p lending and ING banking).

As most of you know, I am not an advocate of the ultra frugal lifestyle but the responsibly frugal lifestyle.  I believe spending money on things that are of great value, and I believe fitness is one of those things that is valuable and worth spending some money on.  If you are entrenched at your local gym or comfortable with your home gym, by all means keep at that.  If you are looking for a gym try out a 24 hour with the 30 free day trial.  Hopefully at some point I can find a introductory offer for TPS readers.

Actual reader email from Josh in Arizona:

“Jesse,

Are you around?  This may seem weird but I am starting to get mad at you not posting, sort of like a penpal that doesnt write back…especially since this is the weirdest/hardest financial time we have seen in this country in ages.  Ok enough weird emails to bloggers that don’t know me

Josh
PS please post”

Well to the delight of many of you, and the consternation of a few of you you, I am alive and better than ever.  I haven’t quit blogging, I have just slowed down lately because I have had a son on the way and he was born this week!   Jackson Lee:

Lauren and Jackson are both doing great.  Thanks to everyone for the concern as to my whereabouts.  I have a bunch of articles that I am just finishing and I finally finished the ebooks I have been promising so look for them to come sometime this week!

So good news: they accepted our counter offer on Lauren’s house.  This has been one of the biggest stress points for us over the past few months.  We were afraid that with the market as it is we wouldn’t be able to sell, or at least that we wouldn’t be able to sell in time for the baby.   One thing down!

Unfortunately, it’s been a bittersweet week though because we found out that Lauren does not get partially paid maternity leave as we had thought.  In fact, its slightly ridiculous because the company does have paid maternity leave but we are missing out because of a small technicality on insurance enrollment dates.

I understand and love our capitalist system but using small loop holes and technicalities to cut people off unexpectedly strikes me as unnecessarily harsh.

Since I am eventually going to have to consolidate all of our insurance into one policy I decided to shop around a bit and see what is out there. I have been very happy with State Farm car insurance and I love my agent but I figured it can’t hurt to look around a bit. There are a few things I knew I did not want to consider like esurance (see my previous dealings with them) and titan (who Ive heard terrible things about) so I started looking around. On a side note, I really can’t believe how much more expensive it is being off my family policy and onto my own. I was going back through some old papers and my car insurance when I was under my parents was roughly a fifth (adjusted for change in car) of what it became when I went out on my own. But I digress.

If there is one thing I found its that going to different insurance sites and getting online quotes individually is a pain. Im not sure why but I would almost swear they try to make it painful to fill out the quote forms. A huge pain. This led to some frustration and me giving up for a while. So next I tried some of the those “compare and get quotes” places. The main advantage to the “compare” type of site is simple: you only have to fill in all the ridiculous amount of information that insurance companies make you fill in once instead of every time. At very least it saved me some time trying to go through all the different sites. My two favorites I found were the highly touted progressive and a british Car Insurance site. Obviously the british site doesn’t do me much good since Im in the US but I liked their forms and layout. Progressive has a pretty nice layout too and shows the various rates that each car insurance company would give. There is one caveat Ive gotta throw in: somehow progressive is ALWAYS lower. Im not so sure I believe their commercial anymore.

On a side note, holy cow Farmers insurance is expensive. It was routinely (on insurance.com and progressive.com) 1/3 more than all the others. I guess they are greedy little farmers.

That’s right, we’re having a baby boy!  I am a lucky guy.  A few years ago I had a rough patch of life when I got laid off…  Little did I know that the next portion of life would be so rewarding.  I met the most amazing woman who I now get to marry, got a great job and now the latest development; I get to be the father of a baby boy.  I pretty much get choked up just thinking about it, I cant wait for the first time I get to see him.

It seems like it was just yesterday that I was the kid looking up to my dad.  I remember nothing was ever a huge problem as long as dad was around.  Now its my turn to be the protector and guide and Ill be honest: its damn scary.  That being said Ill try to stick to some financial talk here.  I made a checklist of financial things that need to be done before/after the baby is born that aren’t related to buying things…Ill write more on that a different time.

1) Get the baby’s Social Security Card

2) Get the baby’s Canadian Social Insurance Card (since I am a Canadian citizen, he gets to be one too)

3) Adjust insurance to cover baby

4) Adjust budget for coming baby expenses

5) Check for government benefits/tax credits

6) Adjust my life insurance policy

7) Do a complete re-read of our company insurance policy so I can understand exactly what is covered with dependents and expenses once they are added.

8] Possibly start a 529 Educational savings plan

Feel free to add any that you think of…

Before I get into anything I should put a small caveat on this:  laws vary from state to state.   That being said it has been quite the ordeal dealing with this whole car-is-now-expensive-1ton-paperweight thing.

1) If you are not at fault they need to give you a rental car equal or similar to your car
If you drive an SUV and they try to give you a tiny compact car (though right now gas costs you might prefer a tiny compact) push back on them.

2) They will lie to you
Esurance told me I HAD to take my car to one of their preferred shops.  This is a flat out lie.   Colorado, like most states, allows you to pick where you want your car taken to.   The shop then told me I couldn’t take it to another shop, which is akin to my car being taken hostage (and is very illegal) so I had a wrecking company get a flatbed, pick it up, and move it.

3) They will try to screw you - behind your back
Once I had my car moved, I gave the new repair shop all of the insurance information and called and left a message for the insurance agent that I had moved my car to the new shop.  I was out of town on business and missed one call from the insurance agent.  He called Enterprise (where my rental was with) and told them to cancel my rental because I wasn’t responding to him.  Luckily Enterprise called me and left me a message saying what the insurance agent was pulling and so I was able to call both of them and make sure that didnt happen.  Sleezy.

Ok so you probably knew those things already, but let me pound it into your head: beware when dealing with them, they have one thing in mind and surprise: its not your best interest.

While driving with Lauren to go see a property management company about my house someone turned out in front of me.  Here is what happened:

Here is how I handled it and I think so far its been very effective:

1) Call the police
I called the police right away since it was substantial.  Even in a wreck where there is not substantial damage it is still a good idea to get a police report because this will be vital later on as far as determining insurance coverage.  If it the other persons fault, such as in my case, you need to establish that the other party is officially the one at fault.

2) Call your insurance agent
As it turns out State Farm wants you to deal more directly with the other persons insurance but if you have an insurance agent that actually gets on top of things for you, you want to get them involved early on.  Insurance agents know how to deal with other insurance agents.

3) Take pictures of the damage
Having your own set of pictures is essential in case some sort of dispute comes up later.

4) Get the other drivers information
In this case I got it from police.

5) Call the other persons insurance
I called Esurance and sure enough he had reported the accident but he didn’t say it was his fault or give them any of my information.  My insurance had also not called them yet.  I got all of the correct information in to them and got them to set me up with a rental car.

This is as far as I have gotten, currently they are inspecting the damage and I am waiting to hear what they have to say.  I will, of course, add as things come.

So this article has like 50 pictures. I think thats a record. The length probably is too. In any case I found most guides out there incomplete, annoying, or trying to sell something so I am going to give you my experience.

So as you saw yesterday I am engaged a wonderful woman. The first thing I had to do when I was starting the process along was find an engagement ring. Luckily for me Lauren was pretty specific as to what kind of things she liked so I knew a good place to start. As I have written about before, and engagement ring is something I did not want to skimp on, but that doesn’t mean you shouldn’t look for a deal. Beyond all else buying a ring should be an informed decision so that you do not get ripped off. This is good for both men and women to understand. So lets start off with the basics and follow my decision tree. I should note I am focusing on a traditional diamond engagement ring: not all engagement rings are diamonds, they can be anything you want. I even know of someone who carved their engagement ring out of wood…its up to the couple, but since I am following my process, ya get diamonds in this article! The financial and budgetary parts are at the bottom so if you don’t want to know all of the basic info, you can skip right to the bottom

The ring or “the setting” as the fancy term for it is:

You have generally a choice between gold, white gold, and platinum. The three, that order, are presented below:

When selecting a gold band (yellow or white), definitely get at least 18k (karat) gold. The differences between white gold and platinum are beyond the scope of this article but suffice it to say, they are very close in look (but NOT the same in chemical make up). I already knew Lauren liked white gold so I knew where to start.
Next you have to pick if you want accent jewels or not. This means if you want other stones around the diamond. The rings shown above are all “Solitaire” which is fancy Latin speak for “all by itself.” Some other typical arrangements are:

Three stone engagement ring, five stone engagement ring, multi stone engagement ring, and colored accent engagement ring (in that order). In my case, I knew Lauren liked the style of #2 with 5-7 stones surrounding so I went with a similar one.

Now to the main event, the diamond.

I am the first to admit, I hate diamonds. Why do I hate diamonds? They are an artificially created market. Diamonds are not a commodity. Most people think they are like gold but they are not. Gold is fungible which means that quantities of gold are freely interchangeable. Gold’s purity can be readily assayed and it basically indestructible, making it a reliable store of value. It can be melted down and reused. Gold’s price has remained high throughout all of history. Diamonds on the other hand, contrary to the James bond film, are not forever; they can be damaged or destroyed. The value of diamonds varies widely depending on grade which is completely arbitrary. Diamonds are controlled mostly by the De Beers cartel and fund a lot more African warfare than we as Americans like to think about. All that being said, am I going to be the one who doesn’t give my girlfriend a diamond ring when all of her friends, coworkers, and family have them? No. But should I ever meet a top De Beers exec in a dark alley, I would congratulate him on a genius business strategy and promptly give him a good beating for just now within the last few years cracking down on blood diamonds.

So diamonds are rated on four things: color, cut, clarity and carat (not the same as Karat)

Color:

There are specifically colored diamonds which are out of the scope of this article. Color as I am referring to it is in reference to its whiteness, or more correctly: colorlessness. Most all natural diamonds contain small quantities of nitrogen atoms that displacing the carbon atoms within the crystal’s lattice structure. These nitrogen impurities are evenly dispersed throughout the stone, absorbing some of the blue spectrum, thereby making the diamond appear yellow. The higher the amount of nitrogen atoms, the yellower the stone will appear. Below is the scale:

That breaks down into:

Diamond Color Designations

• D, E, F - colorless (white)
• G, H, I, J - near colorless
• K, L, M - faint yellow or brown
• N, O, P, Q, R - very light yellow or brown
• S, T, U, V, W, X, Y, Z - light yellow or brown

Diamonds with a faint tinge of color (K, L, M, N, O) have a slightly warm color and are more affordable. For those who want a larger diamond within a certain budget, selecting diamonds with a lower color grade may be the best option especially if you are using yellow gold as your setting. Aside from Carat, color is the most costly piece of the puzzle.

Unfortunately white gold and platinum are less forgiving, though you can still get away with a “near colorless” without seeing much color. That was my original plan, to get a G or H color diamond. The only problem was, no matter how I looked at it, anything less than an “F” I could see yellow and it bugged me. Here are how they look from the side:

So I ended up going with an “E” color.

Cut

Ok so as you can see, cut is fairly self explanatory as to what it means, but it is actually fairly complicated. When jewelers judge the quality of a diamond cut, a lot of times they rate it as the most important of the “4 Cs.” The way a diamond is cut is primarily dependent upon the original shape of the rough stone, location of the inclusions and flaws to be eliminated, the preservation of the weight, and the shape. Cut is not shape: shape is the outward appearance, the cut is the facets, symmetry, polish, and all the other specifics that make it sparkle.

When a diamond has a high quality cut (ideal cut), incident light will enter the stone through the table and crown as shown above and travel toward the pavilion where it reflects from one side to the other before bouncing back out of the diamond’s table toward you. This phenomenon is referred to as “light return” which affects a diamond’s brightness, brilliance, and dispersion. Any light-leakage caused by poor cutting, will reduce the amount of light returned, and how good the diamond looks. Here are a couple representations:

Long short of it, don’t skimp on cut. The ratings are:
* Ideal Cut
* Premium Cut
* Very Good / Fine Cut
* Good Cut
* Fair Cut
* Poor Cut

Go no lower than Very Good cut. The good news is that generally the price increase is not prohibitive because most people cutting diamonds are skilled and have no reason to cut them poorly. I went with ideal, as I wanted it to sparkle as much as possible.
Clarity

Clarity refers to how free a diamond is from tiny little (generally microscopic) imperfections inside the diamond. Diamonds are assigned clarity grades based on what can be detected with 10X magnification. If there’s a microscopic piece of dust on a diamond, it affects the clarity grade. The thing is, most imperfections have almost no impact on the brilliance of your diamond. So, if small clarity characteristics don’t affect a diamond’s beauty, why are diamonds with higher clarity grade so expensive? To pay for rarity. This means that you do not need a very clear diamond because you will not be looking at the diamond under 10X magnification, you will be looking at it with your naked eye. The way they are rated:

Diamond Clarity Designations

* FL - “Flawless” no inclusions at 10 x magnification
* IF - “Internally Flawless” no inclusions at 10 x mag.
* VVS-1 - “Very Very Small” inclusions hard to see at 10 x magnification
* VVS-2 - “Very Very Small” inclusions. VVS1 better than VVS2
* VS-1 - “Very Small” inclusions visible at 10 x mag. - not naked eye
* VS-2 - “Very Small” inclusions VS1 is better grade than VS2
* SI-1 - “Small” or “Slight” Inclusions or “Imperfections” still invisible to naked eye
* SI-2 - “Small” or “Slight” Inclusions or “Imperfections” may be visible to naked eye, may not
* SI-3 - Inclusions large, probably visible under inspection
* I1 to I3 - Starting to suck

You just have to see and decide. I recommend anything over SI2/S2. I couldn’t see anything until then when I was comparing the two. I ended up going with the Very Slightly Included.

Carat

Carat is the one that most everyone knows so I wont spend much time on it. The Carat weight largely determines the cost of the diamond and it is the obvious “size” you see. Carat is the measure of weight of a diamond. 1 Carat = 0.2 grams or 0.007 ounce. The table below gives a frame of reference (not actual sizes):

So anyway, that about covers it. On to some more finance specific things:

What is the most cost effective diamond?

The real answer is “it depends.” You really have to look for yourself. But since I hate when people say that, I will give my general opinion. From a pure “cost effective” basis, I believe the best deal would be an ideal cut, H color, I2 clarity, .99 carat diamond would be your best bet to get a good sized, fairly colorless, and acceptably brilliant diamond. A quick look on bluenile.com and I found that exact diamond for under 4k. (.99 gets you close to a carat without paying the “over 1 carat” premium).

A few things to remember when buying an engagement ring:

1) Stick to a budget
Don’t get carried away and put yourself into a poor position because you get carried away. If she is unhappy with you after you have tried hard to get something beautiful for her, you probably shouldn’t be marrying her anyway.

2) Ask for a discount
Diamonds have one of the most ridiculous retail markups of anything you can buy. If you are ready and willing to walk away from a jeweler they will cut you a good discount. Their markups are anywhere from 40% to 1000%. Ouch. Avoid “mall” stores, they are the biggest rip off.

3) Know your to be fiancee
Getting something expensive is nothing compared to getting something you know your other will love. Seriously, spend some time, do some investigation, its worth it.

So, as many of you may have noticed, I haven’t been around since early last week, well Ive been busy…and on Friday night I asked my girlfriend to marry me.  She said yes, which makes me basically the luckiest the guy on the face of the planet.

Here is a pic of right after:

I have a series of posts that will be coming this week based on my notes that I took along the way that I think will be helpful.  Sorry for the downtime, as you can tell, Ive had other things on my mind.