As couples prepare holiday marriage proposals, Northwestern Mutual study finds 1 in 3 Americans believe serious discussions about financial dreams – and debt – should happen in the early stages of dating Almost half of Gen Z say financial compatibility is more important than physical compatibility MILWAUKEE, Dec. 5, 2023 /PRNewswire/ — December is, by … [Read more…]
The information provided on this website does not, and is not intended to, act as legal, financial or credit advice. See Lexington Law’s editorial disclosure for more information.
The debt snowball method is a repayment plan that involves paying off debts in order of lowest to highest principal sums. As you pay off small loans, you gain the confidence and money needed to repay larger ones.
Paying multiple debts is a juggling act. On one hand, paying all debts at once is tempting but expensive. On the other hand, paying one at a time is more affordable, but that takes long-term financial management. Thankfully, you can use the debt snowball method to simplify your debt payoff plan..
The debt snowball method is a debt repayment plan in which you quickly pay off small debts to focus on larger ones. Even though it’s simple in concept, you may have questions about the execution. To help you out, we’ll explain the method in detail, walk you through its steps and share a few best practices.
Table of contents:
What is the debt snowball method?
How to snowball debt in 4 steps
Snowball method example
Best practices for the snowball method of paying off debt
The snowball method vs. avalanche method of debt consolidation
Pay off debt and improve your credit with Lexington Law Firm
What is the debt snowball method?
The snowball method is a debt repayment approach where you pay off debts in order of smallest to largest principal sums. After making the minimum payment on all debts, spenders invest all they can into debts with the smallest principal. Once you pay off these small debts, you can roll funds over to the next highest.
Unlike other debt consolidation and payoff strategies, the snowball method doesn’t factor in interest rates. Instead, this approach focuses on principal payments. With each debt repaid, you should feel better equipped to tackle the next in line.
Who should use the snowball method?
Anyone juggling multiple debts should consider the snowball method. It provides a simple strategy for organizing your debts. As you knock out small debts, the snowball effect offers the momentum and confidence you need to get out of debt.
Pros of the snowball method
The snowball method of debt repayment offers distinct benefits over other approaches. The main advantages include:
Actionability: Small changes to your budgeting make this approach actionable. It doesn’t come with any prerequisite or additional charges. As a result, jumping in is fast and straightforward.
Empowerment: If you can’t pay your bills or keep up with debt, the snowball method mentally and financially empowers you. With every small debt cleared, you see progress and stay motivated as you pay off greater debts.
Simplicity: The snowball method is easy to wrap your head around. It also breaks large chunks of debt into smaller, approachable pieces.
Cons of the snowball method
Despite its strengths, the snowball method comes with a few downsides, including:
Interest accrual: If your larger loans have a higher interest rate, the snowball method may not work as well. According to these credit facts, if you follow the strategy, higher interest rates may cost you more over time.
Emphasis on small debts: This approach works best when knocking out small debts back to back. You won’t see the same immediate results if you’re juggling a few large loans.
Inflexibility: The snowball method doesn’t leave much room for customization. You may want to consider another option if you want a malleable strategy you can modify.
How to snowball debt in 4 steps
Thanks to its simplicity, you can implement the snowball method in only four steps. This is the process in detail:
Step 1: Take a debt inventory
The first step of the debt snowball method is to list all your debts from smallest to largest. While you can keep interest in mind, focus on the principal balance. If two debts share a similar principal, you can place the one with a higher interest rate first.
Step 2: Make minimum payments on all debts
Make the minimum payment on each of your debts every month. This step is crucial because you don’t want to incur any fees or penalties for not making payments on other debts even as you focus on one in particular.
Step 3: Pay down your smallest debt
On top of the minimum payment, invest as much as you can into your lowest principal balance. While you want to pay it off quickly, don’t forget to set money aside for:
Savings
Groceries, laundry and other household costs
Day-to-day expenses like eating out or investing in your hobbies
Step 4: Repeat until debt-free
As you pay off each debt, you can roll more money into larger ones. When you aren’t juggling as many debts, you’ll have the resources to focus on paying down the highest sums. Eventually, most or all of your debts should get paid off.
Snowball method example
To help explain the snowball method, here is an example of how you budget for it. Assume you make $2,500 a month and have to manage these expenses:
Rent: $700/month
Utilities: $150/month
Student debt: Minimum payment of $120/month (total principal: $21,000)
Medical debt: Minimum payment of $60/month (total principal: $4,500)
Auto debt: Minimum payment of $40/month (total principal: $1,800)
Credit card debt: Minimum payment of $15/month (total principal: $900)
You would implement the snowball method of paying off debt like this:
Pay necessary expenses like rent and utilities. This brings you down to $1,650.
Pay the minimum balance on all debts. Your spending money drops to $1,415.
Pay down your lowest debt. In this case, it’s the credit card debt. Let’s say you pay $500 and bring that principal down to $400. Your remaining balance comes out to $915.
Spend the remainder of your money on day-to-day expenses. Remember to save as much as you can. It never hurts to have an emergency fund ready.
Once you pay off the credit card debt, move on to the next lowest principal sum. So, you would pay off auto, medical and student loans in that order.
Best practices for the snowball method of paying off debt
To see the best returns on the snowball method, follow these tips:
Don’t base repayment order on interest: Anyone trying the snowball method should focus on principal balances. This approach relies on small wins to build up to bigger debts. Large, high-interest loans get in the way of that.
Mitigate high interest with lower rates: While focusing on small loans, try to reduce interest on larger ones. Negotiating a lower interest rate will help save money in the long run.
Track spending over time: You should avoid wasting money that could go toward paying off debt. Additionally, track the amount you spend on debt repayment. That way, you can stay on track as weeks or months pass.
Don’t fall behind on bills: Falling behind on bills or loans can lead to fees or a higher interest rate. In the long run, this will slow down your repayment.
Set aside emergency funds: You shouldn’t invest every cent in settling your debts. An emergency fund can help you avoid more debts after home repairs or health issues.
The snowball vs. avalanche method
The avalanche method is another way of paying off debt that determines payment order by interest rate. In both the avalanche and snowball approaches, you make minimum payments on all debt each month. From here, they diverge:
The avalanche method has spenders pay off the debt with the highest interest rate first. Once customers pay off this loan, they move to the one with the next highest interest rate.
The snowball method ignores interest rates to focus on principal payments.
While the snowball method quickly pays off small debts, the avalanche approach is slow and steady. It may take you longer to pay off your debts, but you will accrue less interest. So, depending on your interest rate and principal sum, you may pay less overall, which could make this option more appealing.
Which method is right for you?
The avalanche and snowball methods can both help with debt repayment. The right approach for you depends on personal preference and your financial situation. To find the right strategy, ask yourself:
Do you need help staying motivated to pay off debts? If so, the snowball method offers more small wins to keep you going.
Is your financial management style analytical and patient? Then the avalanche method will complement a slow and steady approach.
Do you have several small loans or a few high-interest loans? The snowball method suits the first situation, and the avalanche method fits the second.
Work to improve your finances and your credit with Lexington Law Firm
Whether you need to rebuild your credit or get out of debt quickly, the debt snowball method can help. Unlike other strategies, the snowball approach is easy to jump into. While paying off debts can take time, this method gives you the confidence and direction to pay down debts one by one. While using any debt repayment plan, you don’t want to forget about maintaining or even improving your credit. Stay current on all your bills, create a budget and track your spending. If you’re working on repairing your credit, Lexington Law Firm could help you on your journey with our credit repair services.
Note: Articles have only been reviewed by the indicated attorney, not written by them. The information provided on this website does not, and is not intended to, act as legal, financial or credit advice; instead, it is for general informational purposes only. Use of, and access to, this website or any of the links or resources contained within the site do not create an attorney-client or fiduciary relationship between the reader, user, or browser and website owner, authors, reviewers, contributors, contributing firms, or their respective agents or employers.
Reviewed By
Brittany Sifontes
Attorney
Prior to joining Lexington, Brittany practiced a mix of criminal law and family law.
Brittany began her legal career at the Maricopa County Public Defender’s Office, and then moved into private practice. Brittany represented clients with charges ranging from drug sales, to sexual related offenses, to homicides. Brittany appeared in several hundred criminal court hearings, including felony and misdemeanor trials, evidentiary hearings, and pretrial hearings. In addition to criminal cases, Brittany also represented persons and families in a variety of family court matters including dissolution of marriage, legal separation, child support, paternity, parenting time, legal decision-making (formerly “custody”), spousal maintenance, modifications and enforcement of existing orders, relocation, and orders of protection. As a result, Brittany has extensive courtroom experience. Brittany attended the University of Colorado at Boulder for her undergraduate degree and attended Arizona Summit Law School for her law degree. At Arizona Summit Law school, Brittany graduated Summa Cum Laude and ranked 11th in her graduating class.
When architect Simon Storey’s clients took him to a steep lot of undeveloped land for sale in Silver Lake, he advised them to pass. Storey’s firm, Anonymous Architects, is used to building on difficult sites, but he knew this particular lot would be especially challenging.
“It’s more difficult and more time-consuming,” says Storey.
The lot lingered on the market for a few years and then the asking price dropped. That’s when Storey and his wife, Jen Holmes, decided they were willing to take on the difficult ground-up construction.
Sloped lots typically require excavation and complicated and costly foundations, and have issues ranging from erosion to drainage to landscaping. It’s not for the faint of heart.
“It’s such a huge pain. But I proved myself right: It wasn’t easy,” he says.
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Storey and Holmes bought the 2,900-square-foot lot in 2017 for $92,000 and started to plan their home. The land was not just steep — a grade of 33% — but also long and narrow. (For comparison, the steepest street in Los Angeles, Eldred Street in Highland Park, has the same slope.) The couple bought the land from entrepreneur Judd Schoenholtz, who bought the lot in a trust sale. Ironically, Schoenholtz was considering how to build on it and had looked at some of Storey’s other houses for inspiration. “Simon is probably the only one who could figure it out,” he says with a laugh.
Working within the constraints of a narrow lot was familiar to Storey, who had previously built his own home in Echo Park, a compact but elegant structure whose 960 square feet exceeded the 780-foot-lot it was built on.
Storey’s previous home, dubbed Eel’s Nest after the slender homes typical of dense neighborhoods in Japan, was a study in efficient urban living. He found ways to enlarge the space, just 15 feet wide, through the clever use of windows and skylights, high ceilings and a floating staircase that did double duty as a light well.
Storey and Holmes wanted to take the best parts of Eel’s Nest and the lessons learned from living in that space for more than a decade and apply them to this new project, which they called the Box. Once again the constraints of the lot dictated the design. “We had no choice but to go right up to maximum width and stick with it for the entire building,” explains Storey.
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The result is a long building that spans just 18 feet across and 100 feet long. Yet adding just three more feet than their previous house makes a dramatic difference. “Every inch makes an outsize difference. I don’t think of it as being a narrow building,” says Storey.
Storey wanted the house to be as utilitarian as possible. He chose a corrugated cement panel typically used for farming and industrial buildings in Europe as a siding material above the two-story concrete base.
With the structure built three feet from the property line, the couple were constrained by city code in the amount of windows allowed on the side of the building. As a result, the windows are arranged in a horizontal expanse, providing panoramic views of the hills in Silver Lake and Echo Park.
The entrance to the house is set back another five feet, allowing double-height windows that span two stories, bringing in more light. The floating staircase from Eel’s Nest makes another appearance in the Box, across from the entrance. A narrow walkway on the top floor connects the front and back of the house but allows light to filter in on both sides to the floor below. The skylight in Eel’s Nest also reappears in the Box, bringing more light into the shower in the primary bathroom.
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With a workshop sitting between the ground-floor garage and the two main stories of the house, Storey and Holmes were able to construct all of the cabinetry, millwork and even features like their stair treads on-site. “Anything made of wood we built ourselves,” says Storey.
Holmes, who works in development at LACMA but was an art student in college, found her sculpting skills came in handy. “I knew how to weld but didn’t do it for 20 years,” explains Holmes, who took a half-day welding class at Gearhead Workshops in Torrance to brush up on her skills.
In fact, much of the construction they did themselves, as a budgetary consideration but also to ensure the level of detail met their standards. Weekends, holidays and vacation days for nearly three years were spent working on the house.
The couple estimate they spent 5,500 hours working on the house, not including the hours spent on planning, designing and general contracting, and saved about $520,000 in construction costs based on pricing from comparable projects Storey has worked on.
“I’d take naps on a furniture blanket on the floor or in the car,” says Holmes, who became a regular at the nearby Whole Foods to pick up meals before they had a working kitchen. “Everyone [who works] there knows me and I know all of them.”
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Other expenses included $300,000 for the foundation, more than three times what it would have cost for a similarly sized project on a flat lot, and about $20,500 for geology consultants to survey the slope. All together the project came in at roughly $1.3 million. However, the average homeowner shouldn’t expect such a deal. Acting as his own architect, general contractor and builder helped Storey and Holmes save considerably. Additionally, every hillside lot presents its own hidden expenses — and what a house costs to build is often very different than its market value in competitive L.A.
Before they started on the cabinets, the pair worked on sealing the envelope of the house to ensure better air quality and circulation. They meticulously identified every gap in the framing stage, foaming and caulking the gaps to improve efficiency.
Once that was complete, they set about building their own window frames and cabinetry. The two handpicked all of their own lumber from Bohnhoff Lumber Co. in Vernon, a decision Storey says is key to guaranteeing high quality. “It was a cost issue but also a quality issue. There is a shocking level of inconsistency when you don’t pick it yourself.” The natural wood provides a calming contrast to the industrial materials used on the exterior.
Most of the casework is a mix of red and white oak. With construction of the house happening during the pandemic, the cost of white oak saw a precipitous rise. Storey and Holmes began to introduce red oak as an accent material, though the effect is still monochromatic. “I don’t want to live somewhere austere, but I like things that are minimal,” says Holmes.
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All of the cabinetry and woodwork is custom, designed to suit the couple’s needs. Separating the kitchen and living room is a multipurpose room-within-a-room that includes a custom pantry on one side and cabinetry to house their record collection and stereo on the other.
“Every element of the house has a function,” says Storey. The focus on utilitarian design is a carryover from Eel’s Nest. “We are squeezing as much utility into the building as possible.” Appliances, primarily Fisher & Paykel, are hidden behind custom wood panels, as are closets and bathrooms.
With four bedrooms and three bathrooms, the house was designed to be flexible enough to adapt to changing needs. Planned prior to the pandemic, Storey’s design called for his office to occupy the back of the house, with living spaces in the front. However, the office can easily be converted into a guest suite for relatives or visitors that includes a kitchenette and a private entry.
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As a passionate cook, Holmes programmed the layout of the kitchen to her specifications. The sink is placed in a central island, facing the views. “Every party I go to, people end up in the kitchen,” says Holmes. “I wanted it to be comfortable to cook in but also a place to entertain. We can have four or eight or 20 people here and it doesn’t feel too big or too small.”
While Holmes wanted the kitchen to be as functional as possible, Storey wanted the kitchen to not look like a kitchen at all. “The fridge and freezer vanish. Nothing screams ‘kitchen.’ We had competing objectives but managed to merge into a perfect solution,” he says, adding, “It’s a good allegory for marriage.”
Welcome to Episode 8 of The Kings Table Podcast, a captivating new show hosted by Ashish, Mike, Aaron, and Matt. Join us for an unfiltered, authentic experience as we gather weekly to delve into the raw discussions that drive our lives, businesses, economics, and the world.
Meet the hosts:
1. Mike (The Sage) Ayala is an accomplished investor, speaker, and podcast host, who stands at the helm of Investing for Freedom, guiding busy professionals and entrepreneurs toward the path of genuine liberation and optimal living. 2. Ashish (Hostess with the Most-est) Nathu is a founder and CEO, entrepreneur, real estate investor, triathlete, and host of the Rich Equation Podcast. 3. Matt (Hero of Hospitality) Aitchison is a distinguished real estate investor, captivating speaker, and committed philanthropist. 4. Aaron (The Trend Spotter) Amuchastegui is a seasoned real estate virtuoso with a remarkable track record of over 1,000 house transactions, predominantly acquired through astute foreclosure purchases at courthouse auctions.
In this installment, we dive deep into the realms of business relationships, marriage, parenting, and the essential building blocks that foster strong and healthy relationships. Our conversation kicks off with an exploration of business relationships and why people leave. We ponder questions about religion, in-laws, financial harmony, and setting shared goals early in a partnership.
As the discussion unfolds, we shift our focus to parenting, sharing valuable insights and keys to becoming a successful and nurturing parent. Discover how to create an environment where your children can thrive and flourish.
Tune in, engage, and let’s continue to explore the tapestry of life’s most precious relationships.
Highlights:
01:19 – An article from Berlin about people who identify themselves as a dog 11:49 – Thinking more positive thoughts or thinking less negative thoughts 16:41 – Do employees owe you 2 weeks notice when they quit 47:21 – Marriage and family dynamics regarding religion, parenting, money, and dealing with in-laws 01:19:10 – Parenting advice
Connect with us!
We eagerly await your feedback about the show! Kindly share your thoughts via text message at this number: (844) 447-1555.
Mike Ayala: Instagram: https://www.instagram.com/themikeayala/ YouTube: https://www.youtube.com/channel/UCoa4pNSAYxBM6nSn2jCrPYA Website: https://investingforfreedom.co/
Don Jr, Eric, and Ivanka Trump have taken out a combined $22M in mortgages on their new swanky homes in Florida since relocating from New York over the last two years
DailyMail.com can reveal Ivanka and Jared Kushner lead the siblings with the highest mortgage, borrowing $15M against their $24M Indian Creek Island home which was finally completed last month
In Jupiter, about 85mi north on Florida’s east coast, Don Jr, 45, and fiancée Kimberly Guilfoyle, 54, snapped up a $9.7M pad with a $4.8M home loan, while Eric, 39, and wife Lara borrowed $2.4M on their $3.2M house
By Chris White For Dailymail.com
Published: 07:12 EST, 26 November 2023 | Updated: 19:02 EST, 26 November 2023
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He has an estimated net worth of $2.6billion according to a Forbes report last month – but Donald Trump’s fortune is pitted against $200million worth of debt from his portfolio of luxury real estate, resorts, and golf courses.
And just like their famous father, Don Jr, 45, Eric, 39, and Ivanka Trump, 42, have followed suit in taking out massive loans to invest in their own swanky mansions and property.
DailyMail.com can reveal the three oldest Trump siblings took out massive mortgages, all at virtually the same time two years ago, totaling over $22million.
The hefty investments came when the family left New York and began putting down roots in Florida – where Trump relocated after losing the 2020 presidential election.
DailyMail.com can reveal Ivanka Trump and Jared Kushner took out a $15million mortgage on their $24million fixer-upper on Indian Creek Island in April 2021, a few months after they moved from Washington, D.C. to Miami. The couple’s monthly payment on their home loan is around $111,000
Miami Beach’s exclusive Indian Creek Island is known as ‘Billionaire Bunker’. The couple spent two years and spared no expense when they gutted and redesigned their new residence, which boasts six bedrooms and eight-and-a-half bathrooms
Jared and Ivanka finally moved into their newly renovated mansion with their three children, Arabella, Joseph, and Theodore in October.
And now, DailyMail.com can reveal that Ivanka and husband Jared Kushner took out the highest mortgage out of all the Trump kids for their new Florida digs.
The couple borrowed $15million for the $24million property they purchased in April 2021 on Miami Beach’s exclusive Indian Creek Island, known as ‘Billionaire Bunker’.
The home loan was obtained from Bank of America through an LLC linked to Kushner’s general counsel, Christopher Smith.
The deal is for 15 years and at the time would have been secured at a 3 per cent going interest rate, working out to a payment of around $111,000 a month.
Trump and Kushner, both 42, took more than two years and spared no expense when they gutted and redesigned their new residence, which boasts six bedrooms and eight-and-a-half bathrooms.
The extensive renovation project on the 1.3-acre estate was finally completed last month, just in time for Ivanka to celebrate her 42nd birthday with a dinner party at the palatial property.
Donald Trump Jr. and fiancee Kimberly Guilfoyle took out a $4.8million mortgage on the 11,000-square-foot mansion they snapped up in the exclusive gated community of Admirals Cove, in Jupiter, for $9.7 million in March 2021
The home loan for the six-bedroom, 11-bath mansion was obtained by Valley National Bank for 30 years and breaks down to approximately $29,500 a month, plus property tax
The political power couple joined the list of rich and famous residents in Admirals Cove, located just 20 miles from Mar-a-Lago
New aerial images of the resort-style property show its expansive sun deck, perfect for enjoying the balmy Florida heat year-round.
The private 300-acre Indian Creek Island’s wealthy residents include retired NFL legend Tom Brady and, most recently, Amazon’s Jeff Bezos, who purchased two neighboring mansions for $79million and $68million in the last three months.
The island has 34 homes, around 42 residents, and its own private 13-person police force that guard the single bridge to get on and off the estate, as well as a 24-hour marine patrol.
Meanwhile, about 85 miles north on Florida’s east coast, Ivanka’s older brother Donald Trump Jr, 45, and fiancée Kimberly Guilfoyle, 54, snapped up a $9.7million pad in March 2021 in the celeb-enclave of Jupiter, home to numerous sports stars such as Tiger Woods and Serena Williams.
Documents obtained by DailyMail.com show the pair took out a $4.8million mortgage on the property.
The home loan is with Valley National Bank for 30 years with the first 20 being at 3.25 per cent before increasing to the Federal funds rate. This is approximately $29,500-a-month plus property tax.
Younger sibling Eric, 39, and wife Lara, 41, picked up a $3.2million estate also in Jupiter near his older brother, in March 2021
The couple’s $2.4million 30-year mortgage from Valley National Bank works out at just over $10,000 a month plus taxes. The 7,715-square-foot home has five bedrooms, five bathrooms and is in his dad’s gated Trump National Golf Club
Just like his older siblings, Eric had been mainly based in New York before he and wife Lara followed his family down to Florida in March 2022 (pictured in April 2023)
Eric and Lara Trump’s $2.4million mortgage
The 11,000 square foot mansion is in the exclusive gated community of Admirals Cove, 20 minutes from his father’s primary residence of Mar-a-Lago, and boasts six bedroom, 11 bathrooms, pool, gym and games room.
Meanwhile, younger sibling Eric, 39, and wife Lara, 41, picked up a $3.2million estate, also in Jupiter in March 2021. It comes with a $2.4million mortgage from Valley National Bank.
Like Donald Jr, his mortgage is over 30 years, initially at a 3.125 per cent rate for 20 years, then at the Federal funds rate. This works out at just over $10,000 a month plus taxes.
The 7,715-square-foot home has five bedrooms, five bathrooms and is in his dad’s gated Trump National Golf Club.
The only grown up sibling not to have made an real estate investments in Florida just yet is Tiffany, 30 – Trump’s daughter from his second marriage to Marla Maples.
She was reported to have been house hunting in Miami Beach a couple of years ago, but it’s not clear if she ever went through with a purchase. She married
Jamie Lima remembers his divorce six years ago as one of the most emotionally draining and financially challenging experiences of his life. As a result, he resolved to use his professional background as a certified financial planner to help other people going through similar situations.
“I want to make sure other people don’t step on the same land mines and be an advocate for them,” says Lima, founder of the Ramona, California-based Allegiant Divorce Solutions, a financial planning company that helps people going through divorce.
While the financial aspect of divorce is often overshadowed by the emotional impact, rebuilding finances after the dissolution of a marriage can be an integral part of overall recovery. Lima and other financial experts recommend following these steps to navigate the financial challenges post-divorce:
Adjust to your new cash flow
A separation of finances after a divorce may mean you have to do more with less. “You want to start to look at, ‘If I walk away with half the assets and these are my income streams and this is my lifestyle, what will I have to do?’” says Erin Voisin, CFP and director of financial planning at EP Wealth Advisors in Torrance, California. The answer might be changing your spending habits and adapting to a new budget, she adds.
“Your whole timeline of your life might also have to change,” says Megan Kopka, CFP and founder of Kopka Financial in Wilmington, North Carolina. You might need to delay retirement or put off a career change, for example. “A lot of people are basing their mortgages and lifestyles on two incomes, so everybody has to reassess” following divorce, she says.
Rebuild your safety net
Dominique’ Reese, CEO of Reese Financial Services, a financial coaching firm in Los Angeles, says many people also need to rebuild their savings after going through the financial shock of divorce. She suggests giving yourself microgoals to avoid feeling overwhelmed.
“Everybody’s financial situation is different, but you can start off with $100 and then let’s go to $300, then $500” and onward, Reese says. While it’s ideal to save three to six months’ worth of expenses, she acknowledges that amount is impossible for many people and says a smaller goal can be more motivating.
Build credit in your own name
Opening bank accounts and credit cards in your name only, if you had not previously done so while married, is also a critical step toward rebuilding finances post-divorce, Voisin says.
“It’s important to build credit in your own name,” Voisin says, as well as save for retirement in your own account, update your real estate documents to reflect the correct owner, and update any beneficiaries listed on your financial and life insurance accounts. This multistep process can take several months or longer.
While marital status is not reflected on credit reports, getting divorced can indirectly impact your credit because of shared accounts or if you used credit cards only as an authorized user on your spouse’s accounts. Post-divorce, it can be a good idea to request your free credit reports to make sure they no longer list your former spouse’s accounts or accounts previously held jointly but no longer yours.
Get help from experts
Given how complicated the financial aspect of divorce can be, sometimes turning to professionals can be worth the cost. “Before you hire your attorney, hiring a certified divorce financial analyst to help you with finances and a good divorce coach to guide you through the emotional aspect can help a lot,” Lima says.
A certified divorce financial analyst is trained in the financial aspects of divorce. The Institute for Divorce Financial Analysts can help you find one. Divorce coaches come from a variety of professional backgrounds and focus on helping clients achieve their goals for their post-divorce life.
Lima says consulting such professionals is something he wished he had done sooner when going through his own divorce because third-party input might have helped him make more rational, less emotional decisions around separating his finances.
In future relationships, talk about money early
While most couples don’t sign a prenuptial agreement, which generally lays out how money and assets are to be divided in the event of a divorce, financial experts say having one in place can make sorting out finances post-divorce much easier. That can be especially important when getting remarried later in life with more assets or when children are involved.
If a couple isn’t comfortable talking about a prenup, they may have some work to do before committing to a lifelong partnership, says Nicole Sodoma, a family law attorney at Sodoma Law in Charlotte, North Carolina, and author of “Please Don’t Say You’re Sorry,” a book about marriage and divorce. Talking about a prenup, she says, forces couples to have hard conversations about money that they might ignore otherwise.
“Hopefully, after having those discussions and agreeing on a prenup, you’ll put it in a drawer or safe and never need it,” she adds. “But in the event you do, it will be a diagram for what separation looks like.”
This article was written by NerdWallet and was originally published by The Associated Press.
The wedding dress has been altered, the tuxes are pressed, and the rings are tucked safely in velvet boxes. Chefs are preparing an elaborate meal, bartenders are ready to fill Champagne flutes, and a DJ is putting the final touches on his playlist. The venue is decorated with flowers and candles, and the hotel is packed with happy guests.
The only question is: Who’s paying for all this?
Weddings are notoriously expensive. But they are also an important and romantic day in a couple’s life. Who foots the bill for this party has changed over the years. Below, we’ll break down who pays for which wedding expenses in 2023 — and who traditionally paid in previous generations.
Who Pays for the Wedding in 2023?
In the past, it’s been the tradition for the bride’s family to pay for nearly the entire wedding, and the groom’s family to pick up smaller expenses such as the rehearsal dinner. In some cases, families still follow these traditions, but increasingly people are embracing new ways of covering these costs.
Nowadays, wedding expenses can be split any number of ways, and couples are exploring many different ways to pay for their big day:
• Independent couples may decline help from parents and instead pay out of pocket or borrow money to cover the wedding costs.
• Both families and the bride and groom may decide to split the costs. Sometimes grandparents or other extended family members will offer to pay for a portion of the wedding.
• If the groom comes from a wealthier family, his parents may chip in beyond their traditional requirements.
• Since the legalization of same-sex marriage in the United States, LGBTQ+ couples are creating their own traditions since there’s not a single bride or single groom at the altar.
That’s the beauty of your wedding day: It’s yours. Many brides and grooms are embracing the fact that they no longer have to follow outdated customs if they don’t want to.
For others, however, tradition matters — and that’s OK, too. If you’re planning to follow cultural traditions to a T when funding your wedding, how do you split the bill?
Let’s break down who traditionally pays for the wedding and other related expenses.
💡 Quick Tip: Need help covering the cost of a wedding, honeymoon, or new baby? A SoFi personal loan can help you fund major life events — without the high interest rates of credit cards.
The Bride’s Family
Historically, the bride’s family pays for most of the wedding expenses. Depending on the size and extravagance of the wedding, it can add up.
If you’re the parents of the bride who plan to foot the bill, but you don’t have enough money in savings, it might be worth taking out a personal loan to cover the wedding expenses. In the long run, it’s typically a cheaper option than putting everything on a credit card.
While the bride’s family traditionally takes care of many of the wedding expenses they don’t pay for everything. And every wedding is a little different. You may choose to skip certain items or events (and you may find yourself adding, too). Here’s what the bride’s family typically covers:
Expenses the Bride’s Family Is Traditionally Responsible For
• Engagement announcements
• Engagement party
• Wedding planner
• Invitations, save-the-dates, and wedding programs
• Venue for the ceremony
• Venue for the reception
• Flowers and decorations
• Wedding photographer and videographer
• Wedding dress
• Transportation and lodging for the bridesmaids
• Transportation and lodging for the officiant
• Food at the reception
• Wedding cake
• Brunch the morning after the wedding
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The Groom’s Family
If you have only sons and think you’re off the hook, don’t get too excited. You still have to cover some costs at the wedding as the parents of the groom.
Though less extensive, the groom’s family’s financial burdens can add up. Personal loans are also an option for the groom’s family; in fact, weddings are one of the most common uses for personal loans.
Here’s everything the groom’s family traditionally pays for at a wedding.
Recommended: Tips for a Dream Wedding on a Budget
Expenses the Groom’s Family Is Traditionally Responsible For
• Rehearsal dinner
• Marriage license
• Officiant’s fee
• Boutonnieres for the groom, his groomsmen, and family members
• Bouquets for the bride and bridesmaids
• DJ or band
• Transportation and lodging for the groomsmen
• Alcohol at the reception
• Honeymoon (in some cases)
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The Bride
Many women have dreamed of their wedding days since childhood. But as little girls, they probably didn’t think much about the actual wedding costs they’d have to pay themselves — and there are quite a few.
Expenses the Bride is Traditionally Responsible For
Traditionally, the bride pays for her future husband’s wedding ring, as well as a special gift for him. She may also buy gifts for her bridesmaids. In some cases, she’ll pay for the flowers, and she usually pays for her own hair and makeup.
Nowadays, however, brides may step up and pay more to help out her parents. Many brides choose to do this in part so that they can feel like they have more say in determining the plans for their special day.
People are also getting married later than they did in past generations (the average age for women is now 30 and for a man it’s 32), which means brides (and grooms) may feel more financially capable of covering the expenses themselves.
The Groom
The groom isn’t off the hook either. At weddings, he’s responsible for a few purchases as well.
And even though he and the bride may have separate wedding responsibilities, as a newly married couple they are likely planning to combine their finances, if they haven’t already. Even if they don’t have a joint bank account, the bride and groom are essentially covering their wedding expenses together.
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Expenses the Groom Is Traditionally Responsible For
The first big expense a groom encounters is the one that sets the whole wedding in motion: the engagement ring. The average cost of an engagement ring is now about $6,000. Grooms who don’t have that kind of cash lying around often turn to engagement ring financing options, including personal loans.
While the ring is often the groom’s biggest expense, he’s also responsible for the bride’s wedding band, gifts for his groomsmen, a gift for his bride, his own tux, and the honeymoon — if his parents aren’t footing the bill. (The honeymoon isn’t cheap either; the average cost of a honeymoon is now $5,100.)
Some grooms may also pay for the license and officiant, instead of asking his parents to cover that cost.
Who Pays for Other Wedding Costs
There is also the cost of being in someone’s wedding. For instance, groomsmen and bridesmaids are typically responsible for paying for their own tuxedos and dresses.
These two groups also pay for the bachelorette and bachelor parties for the bride and groom. Bridesmaids may also need to pay for their hair and makeup on the big day.
As someone attending a wedding, you should give a gift, unless the couple has discouraged this. And if it’s a destination wedding, you’ll have to pay your own travel costs, which can include hotels and transportation.
Wedding Costs
Now we know who traditionally pays for what at weddings — and that many modern couples are foregoing these traditions. But how much does a wedding cost?
In 2023, the average couple will spend $29,000 all-in on a wedding. For couples who are paying without their families’ help, a personal loan is the best route, if they don’t have the money in savings or have that money earmarked for buying a house or starting a family.
Are you considering taking out a loan to cover the cost of your wedding? Here are the typical personal loan requirements you’ll need for approval.
The Takeaway
Weddings are expensive, and traditions usually put the bulk of the financial burden on the bride’s family. However, many couples are breaking from tradition nowadays, paying for wedding expenses themselves or splitting the cost among family members more evenly — or in a way that reflects each family’s means.
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FAQs
Who pays for the wedding reception?
Traditionally, the bride’s family pays for most of the wedding reception, including the venue, food, and decorations. However, the groom’s family usually pitches in by covering the music and the alcohol. Increasingly, couples are choosing to pay for their wedding receptions themselves or splitting the cost with their parents.
Who pays for the engagement party?
The bride’s family is traditionally responsible for paying for the engagement party. Nowadays, however, engaged couples often pay for such parties on their own.
Photo credit: iStock/Halfpoint
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Architect Louis Naidorf had a disastrous 80th birthday cake. In 2008, Naidorf, who designed the Capitol Records building in Hollywood, was presented with a celebration cake that had been custom-baked in the shape of his iconic cylindrical building. But the pastry soon reflected the rather substantial difference between concrete and flour.
“When the cake was brought out, it gently collapsed, and everyone applauded,” Naidorf says, laughing over the phone from his home in Santa Rosa. “It was like in one of the movies where the Capitol Records building was destroyed.” Thankfully the cake for his 95th birthday, which he celebrated last month, was more structurally sound.
Designated a historic-cultural monument in 2006, the building has long been a favorite Los Angeles landmark to demolish on film — especially for filmmaker Roland Emmerich, who blew it up with an alien spaceship in “Independence Day” and slammed it with twisters in “The Day After Tomorrow.” Yet no movie can ever write the building out of a central place in popular music history. The tower is synonymous with the illustrious Capitol Records, home of Nat King Coleand Frank Sinatra, and the American record label of Pink Floyd and the Beatles, with the latter’s stars lining the Hollywood Walk of Fame right in front of the building.
Over the last several years, the building has been illuminated in support of various sociopolitical causes. In 2020, it was lighted red to support independent music venues. Last year, during their performance in Hollywood, Duran Duran lighted the Capitol Records building blue and yellow in solidarity with Ukraine. “I think that’s excellent,” Naidorf says. “Anything that vigorously engages the public on the right side of good causes transcends other issues. I’m flattered they use the Capitol Records building. It means it has enough cachet to merit being chosen to do that.”
Like the famous landmark he designed, Louis Naidorf has of late been experiencing his own brush with stardom, with postcards from autograph seekers arriving at his door. He is flattered but doesn’t take the attention too seriously.
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“It’s obvious that if someone asks me for four signatures I’m part of trading baseball cards or something,” he says. “They are going to trade four Lou Naidorfs for one Joe Smith.”
Still, he’s surprised and somewhat baffled by the sudden burst of recognition after all these years. “I guess my name ended up on a list or something,” he shrugs.
Naidorf was just 24 years old when he designed the Capitol Records building, in 1953. It was the world’s first circular office building.
Though it was 70 years ago, he vividly recalls how he felt when he received the assignment for his first solo project. “At one level, I felt enormous anxiety that if I didn’t get a solution, very, very quickly, something terrible would happen,” he says. “On the other hand, I felt a total confidence that I could do it. So it was a crazy contradiction.”
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Naidorf notes the building’s porcelain enamel sunshades with carefully spaced gaps to play with light and shadow. These cause spiral lines to appear on the building, drawing the eye into a rhythm rather than straight up and down. “You can see Capitol Records from quite a distance and you get a first impression of its basic form and character. You have a reading of it as complete,” he says. “But the building is designed so that the closer you get to the building, you discover more details.”
What about the long-standing myth that its round shape was designed to look like a stack of records with a rooftop antenna resembling a phonograph needle? As hard as it might be to believe, the legendary story about the building is just a coincidence — an urban legend that Naidorf has tried to debunk for decades.
In fact, when his boss, Welton Becket, tasked him with the assignment, the building was simply referred to as Project X. Shrouded in secrecy, Naidorf was given little guidance for the project other than being asked to design a 13-story building on a sloped side street in Hollywood that had to be kept as cool as possible and had smaller than usual floor space. He also didn’t know for whom he was designing it. Naidorf says it was common for clients’ identities to be kept confidential during the initial planning stages of a project.
However, Naidorf relished the creative latitude. The absence of information left him unburdened by preconceived ideas. “I knew the door was open for something special. It urged me so strongly,” he says earnestly. “I felt, and I think all architects feel this way … there’s a drive to translate the mundane bare requirements that clients come in with into something that has some poetic qualities about it.”
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Naidorf then had an epiphany: The project’s requirements were “eerily resonant” with a series of circular buildings he had designed for his master’s thesis in college. “The round shape is a very efficient enclosure of space,” he says. “You get more bang for your buck.”
Not everyone agreed with his approach. Naidorf says that Capitol Records co-founder and President Glenn Wallichs became irate when Naidorf presented him with a model and drawings of a round building, and “violently rejected” the design. “He thought it was a cheap stunt designed by a young guy to make the building look like a stack of records,” Naidorf says, laughing.
Wallichs insisted that Naidorf replace the round design with plans for a rectangular building. But when both rectangular and circular designs were presented to the insurance company financing the land, Naidorf says that Wallichs was urged to proceed with the round design.
Soon after, when talk of the building housing a radio station (that never came to fruition) was raised, Naidorf fretted when he was asked to design an antenna. He was worried that it would look like a phonograph needle and cement the idea that the building was designed to look like a stack of records.
Owing to his nagging concern, Naidorf positioned the rooftop spire asymmetrically, poised to appear as if it touches the roof delicately, like “a ballerina en pointe.” He calls it the building’s “grace note.” Still, the stack-of-vinyl myth persists. Laughing, Naidorf says, “It’s the most enduring myth of all.”
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Despite his good humor, it leaves him conflicted. “The building was not designed as a cartoon or a giggle. To have it trivialized with the stack-of-records myth is annoying and dismaying,” he says. “There’s not a thing on the building that doesn’t have a solid purpose to it.”
Naidorf’s ingenuity has been especially impressive to Los Angeles-based architect Lorcan O’Herlihy, who says he has “often responded strongly to the fact and admired that here was this interesting architect [Naidorf] who was combining science and art, or artistry and technology. Welton Becket [& Associates], very much to their credit, were at a period where modernism was at its heyday and they had to come up with ideas that were new and fresh and they did it, and Lou was certainly instrumental in that. His work is extraordinary.”
Naidorf was born in Los Angeles in 1928. His father owned a shop where he made and sold women’s clothing, with Naidorf’s mother lining the garments. Owing to his father’s lack of accounting skills and business acumen, however, the business often collapsed, forcing his parents to work at a garment factory until debts could be paid off to reopen the store.
Throughout his childhood, Naidorf’s family struggled financially as they moved around, living mostly in Silver Lake and Los Feliz. With only enough money to rent studio apartments, Naidorf’s parents slept on a Murphy bed while Naidorf spent his nights on a mattress on the floor.
As a little boy, Naidorf felt drawn to buildings. When his third-grade teacher decorated the classroom with a Hawaiian vacation theme, his fascination morphed into a calling. “I asked my teacher who made the drawings and she said, ‘Naval architects.’ And then I asked her who draws the plans for houses and she said, ‘Architects.’ She told me to ask my mother to show me the floor plans that were published in the real estate section of the Sunday edition of the newspaper.
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“When I saw them, I was a goner,” he swoons. “I now knew what I wanted to do. I wanted to be an architect.”
Naidorf remembers, at age 8, designing a three-bedroom house, using a card table as a makeshift drafting table. Soon after, he began designing small towns. “It wasn’t anything brilliant, but I was learning to draw, learning to scale and learning to think in spatial terms,” he says. When he was 12 years old, Naidorf got a part-time job at a bookstore, where he spent his first two paychecks on architecture books, absorbing them until they were threadbare.
Beyond literature, Naidorf amassed a growing collection of architectural materials (T-square, rectangles, instruments for ink drawings), thanks to his bar mitzvah presents, and decided he was ready to get to work. Sanford Kent, a young architect who had just graduated from USC, hired a tenacious 13-year-old Naidorf, paying him out of his own pocket.
Naidorf says tackling the abstract problems Kent gave him at once stimulated his mind and were instrumental in forming his long-standing ethos. “It got me thinking about architecture in terms of its effect on human emotions. The key issue is, ‘How do people respond to your work, whether from a distance or by living it?’” he says.
He continued to soak up whatever he could about architecture, gearing his junior and high school classes toward studying architecture in university. He attended UC Berkeley instead of the privately funded USC, not only to leave home and expand his horizons but also because of its affordability.
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Even still, Naidorf couldn’t afford all of the program’s required materials. He borrowed airbrushes from his fellow students, who would also give him their pencil stubs instead of tossing them out. Naidorf submitted his assignments on pebble board, which was not only cheaper than illustration board but allowed him to draw on one side, flip it over and draw on the other.
In 1950, Naidorf graduated at the top of his class and got his master of architecture degree a year early. He skipped his graduation ceremony because he had a job interview the next day at Welton Becket & Associates, where he was promptly hired. Among his earliest design assignments: a tray slide for a hospital cafeteria, a clothes closet and a “Please Wait to Be Seated” sign for a restaurant.
Three years into his employment, he began working on the Capitol Records building. Naidorf says he would design it the exact same way if he were given the assignment today.
Andrew Slater, former Capitol Records president and chief executive (2001-07), attests to the building’s distinctive charm. “When you go to work every day in that building it’s like you’re going into a piece of art, and it informs your attitude … to do something with that mindset, which is great,” he says. “Even though working in the music industry is, in a sense, an industrial endeavor, you never felt like you were doing anything industrial when you walked into that building.”
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Still, Naidorf fears being perceived as a “Johnny One Note,” as he puts it. Noting the plaque bearing his name outside the building’s main entrance, he expresses gratitude but wariness “that this one modest project has to carry my whole reputation on it.”
It’s a fair point, given the magnitude of Naidorf’s notable oeuvre. It’s earned him 17 regional honor and merit awards and AIA California’s Lifetime Achievement Award (2009). His work also has been featured at the J. Paul Getty Museum in Los Angeles.
“I know Capitol Records is always the first one people talk about and it’s a splendid, iconic building that fuses artistry and functionalism, but he’s also produced other projects over the years,” says fellow architect O’Herlihy. “The Santa Monica Civic Auditorium is brilliant.”
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Naidorf designed the 3,000-seat capacity Santa Monica Civic Auditorium on the heels of the Capitol Records building, in the late 1950s. Essentially two buildings in one, it was a challenge to design a locale that functioned at once as a performance space with a sloped floor and an exhibit hall with a flat floor for sports events, banquets and trade shows.
He transformed the floor from flat to tilted using a hydraulic system that was hailed for its innovation. “I don’t think you’ll find any place that has a symphony on a Friday night and a gem show, or some kind of hobby show, on Saturday,” he says.
Formerly home to the Santa Monica Symphony Orchestrabut currently sitting vacant, the Civic Auditorium opened its doors to the public in 1958. From 1961 to 1968, it hosted the Academy Awards. It also was the site of live recordings including George Carlin’s comedy record “Class Clown” and the Eagles’ “Eagles Live,” a double LP recorded during their three-night run at the venue. It also hosted “The T.A.M.I. Show” in 1964.
In the meantime, while the Civic was still under construction, Naidorf designed the 15,000-seat capacity Los Angeles Memorial Sports Arena, the biggest arena in Los Angeles when it opened in 1959. (The arena was demolished in 2016 to make way for the Banc of California Stadium, now called BMO Stadium.)
Naidorf says the Sports Arena, home to various Los Angeles sports teams including the NBA’s Lakers (1960-67) and Clippers (1984-1999) and the NHL’s Kings (1967-68), was built to attract sports teams to Los Angeles, but uncertainty about whether they’d catch on meant the facility had to be viable for other purposes.
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In 1960, a year after it opened its doors, the Sports Arena hosted the first Democratic National Convention in Los Angeles, where John F. Kennedy became the presidential nominee. Muhammad Ali (then known as Cassius Clay) won a boxing match there in 1962. It also hosted rallies by Martin Luther King Jr. and the Dalai Lama, and saw concerts by legendary rock acts including the Grateful Dead.
Bruce Springsteen played the venue’s final concerts before the building was demolished, a three-night stint during which he dedicated his song “Wrecking Ball” to the building lovingly nicknamed “The Dump That Still Jumps.” “Well, it was pretty dumpy by the end,” Naidorf says, laughing. “Not all architecture is permanent,” he continues. “I’d rather it was demolished and some useful purpose made of the site than having it sit there old, shabby and neglected as it was.”
Naidorf’s credits also include the Beverly Hilton Hotel, the Beverly Center and the Reagan State Office Building downtown. Outside of Los Angeles, Naidorf helmed the restoration of the California State Capitol Building in Sacramento, a six-year undertaking and then the largest-ever restoration undertaken in the U.S., and he designed President Gerald Ford’s house in Rancho Mirage.
The tallest building in Arizona, the Valley National Bank building (now Chase Tower) in Phoenix, also was designed by Naidorf, as well as the Hyatt Regency Dallas and adjacent Reunion Tower, the most recognizable landmark of the city’s skyline.
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He details these and his other high-profile projects in his 2018 book “More Humane: An Architectural Memoir”, filled with photos, backstories and personal anecdotes. Flipping through its pages, one learns that Naidorf not only took risks designing his projects but even risked his job on occasion.
He writes in his memoir that in 1958, when he was designing the Humble Oil (now Exxon) headquarters in Houston, he refused to design separate locker rooms and drinking fountains for Black and white people, as the company asked him to. When he went home on that Friday night, he describes not knowing if he’d have a job the following Monday. Not only did Naidorf not lose his job, he says, but the company ceased segregating its locker rooms and drinking fountains after that.
“I realized architects have access to some of the most powerful people in the world and it is our job to bring up issues that represent social issues rather than just architectural design,” he says. “The only thing for evil to triumph is for good people to remain silent. Architects should not remain silent.”
Naidorf also understood that sometimes he was designing projects where people don’t want to be, like the Naval Medical Center in San Diego, which opened in 1988. “I felt that there were two emotions we had to contend with,” he says. “One was to lay the sense that this would be welcoming and have a more personal quality. But if you go to a hospital you want a quite contradictory thing. You want to have a sense that it’s state-of-the-art, that whatever powerful forces can cure you, they’re there.”
Instead of one medical building, which he felt would seem ominous, he designed several structures and a series of outdoor walkways to make the facility feel warm and comforting. The treatment and diagnostic part of the facility was bold, with an abundance of steel and glass. Walkways were lined with floor-to-ceiling glass to allow patients to see the outdoor courtyard, grass, trees, sky and distant views of a golf course “based on the primitive feeling you have in the hospital, which is to get out of the damn place,” he says.
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When he was out shopping a few months ago, Naidorf met a woman who mentioned that she had been in the Navy, forcing her to move around a lot when her son was battling childhood leukemia. Without knowing she was talking to the Naval Medical Center’s designer himself, she told Naidorf that it was the only hospital that didn’t scare her ill 6-year-old son, who has since made a full recovery.
“What kind of an architect…,” Naidorf says, overcome with emotion and his voice breaking, “do you have to be not to hold that as better than any design award?”
Though Naidorf had risen through Welton Becket & Associates’ ranks to become vice president, director of research and director of design, he grew increasingly unhappy after the firm’s merger with Ellerbe Associates (it was renamed Ellerbe Becket). He moved into academia full-time in 1990, spending just one day a week at the firm.
Naidorf became dean of the School of Architecture and Design at Woodbury University, earning numerous distinctions, including teacher, faculty member and administrator of the year. He was also a guest professor at UCLA, USC, Cal Poly Pomona and SCI-Arc. At his retirement ceremony in 2000, he was awarded an honorary doctorate, marking not only the end of his academic career but also his time in Los Angeles.
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Charmed by the beauty of Northern California, Naidorf moved up the coast to Santa Rosa. For the next 15 years, he continued working with Woodbury University as campus architect, designing and remodeling some of its buildings, and was invited to be a board member.
When he parted ways with Woodbury at 87 years old, it was not with the goal of taking it easy. Naidorf had other pursuits in mind, including his work with City Vision Santa Rosa revitalizing the city’s downtown area.
He also helped his close friend, Mike Harkins (who edited Naidorf’s memoir), design his new house free of charge after the 2017 Tubbs Fire burned Harkins’ home to the ground and he and his wife lost 99% of their belongings.
“Lou offered without solicitation: ‘I’d like to design your house,’” Harkins says. “To me or anyone else who knows him, it was a heartfelt offer that of course he would make, and yet so much more. One analogy might be if Eric Clapton said, ‘I’d like to play at your wedding.’ The knowledge and sensibility that comes along with a Naidorf design offering is huge, just like his heart.”
Most recently, Naidorf has been experimenting with plans for a project to help people who are unhoused.
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Naidorf has made the most of his architecture license over the last 71 years. His voice fills with pride when he reveals that he holds the earliest issued active architecture license in the state of California, obtained in 1952.
“It’s something I wanted to be since I was a little kid. My architecture license was so hard to come by. I don’t want to give it up,” he says with palpable emotion. “I don’t want to be retired. I want to be an architect until I fall over. I plan to be buried as a licensed architect.”
Of recently turning 95, he jokes that he feels like a bad vaudeville performer who soon will be pulled offstage by a hook. But Naidorf remains in remarkably good health after surviving both prostate and esophageal cancer in his 80s.
To keep his brain sharp, he does exercises including counting backward from 100 by sevens and taking IQ tests online.
As a nonagenarian, he says there is no key to living a long life. He suggests, though, that it helps to try to use it well. “It’s not how big the steak is but how tasty it is,” he says. “I think you have to seek a calling, listen for it and search for it. Find something in your life that is really yours. … Get engaged with something that’s going to scare you, something where the problems are hard. And take risks. There is no failure.”
He also notes the importance of adaptability. “I have had four marriages. I’d better be resilient,” he quips. Twice divorced and twice widowed, Naidorf has a daughter from his first marriage, four stepchildren (who call him “Dad”) from his fourth marriage, 11 grandchildren and six great-grandchildren. An intensely private man, he’s reticent to speak publicly about his relationships and family, preferring to focus on his work.
“I remain so fascinated with architecture,” he says. “I cannot even walk past a store where somebody is putting in an electrical outlet without stopping to look in and watch it.”
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The chatty Naidorf turns summarily succinct, saying, “I certainly have had a good run.”
Inside: Do you want to claim your partner as a dependent on your taxes? This guide will explain the rules of claiming dependents whether girlfriend or boyfriend and help you take the necessary steps to do so.
Navigating the waters of tax credits can be tricky, especially when it involves claiming an unmarried partner as a dependent.
The Internal Revenue Service (IRS) does permit the declaration of a non-relative adult as a dependent, provided certain conditions are met.
And that is where it gets tricky for the tax novice.
That is where we are going to reference the IRS guidance, so you can determine whether or not you qualify for this deduction.
By pointing you in the right direction, you can understand the specific tests and requirements to avoid any tax-related complications.
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Understanding dependency in the context of taxes
The word “dependent” might remind you of a newborn baby or an elderly family member. But in tax terms, the meaning broadens.
In the IRS terms, a “dependent is a person, other than the taxpayer or spouse, who entitles the taxpayer to claim a dependency exemption.” 1
This might be a child, an adult family member, a significant other, or even a close friend. This term “qualifying relative” is crucial in IRS parlance for its implications on your tax dues.
Typically, any person can qualify as a dependent if more than half of their financial support, including living and medical expenses, is taken care of. Also, it’s an opportunity to boost one’s tax return by up to $500 with the Other Dependent Tax Credit.
What qualifies a person as a dependent?
The IRS bases dependents on two categories: “Qualifying children” and “Qualifying relatives.”2 You might think of a qualifying child as your son or daughter. Expanding the scope, a qualifying relative can be a sibling, a parent, or even a significant other.
The essence lies in their financial reliance on you and the nature of your relationship. They ought to:
Be related to you via blood, marriage, or adoption;
You provide over 50% of their financial support including housing, food, medical care, and other expenses
They are U.S. citizen.
The income of the possible dependent.
These nuanced rules might sound overwhelming, but IRS guidance and tax experts like TurboTax can help lighten the load.
Now, let’s address this sticking point: Can you actually claim your partner as a dependent? The following section unravels the mystique.
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Can I Claim My Partner as a Dependent?
You can claim your partner as a dependent on your tax return, provided they meet certain criteria explained by the IRS, including passing the non-qualifying child test, the citizen or resident test, the joint return test, the income test, and the dependent taxpayer test.
I know this is where it gets difficult to follow for the average person.
So, we are here, to break this terminology down into layman’s terms, as such you can then make the best decision for your tax situation.
If you are still confused, then consult with an online tax software like TurboTax or a tax professional for guidance on your personal taxes.
Basic requirements for claiming your partner as a dependent
This essentially means that your partner should be financially dependent on you, where you bear more than half of their living expenses.
In essence, claiming your partner as a dependent revolves around these fundamentals: 2
Residency: Your partner must have been living with you for the full tax year.
Income limit: Your partner’s gross income should not exceed $4,700 for the year 2023.
Support Requirement: You are the main pillar for your partner’s financial needs by covering over half of their total expenses.
Anyone Else Claiming Them: None else should claim your partner as their dependent.
Unmarried. Your partner must be unmarried legally.
All fulfillment of these criteria moves you a step closer to enjoying some tax relief.
Confirm with an accountant or tax expert as exceptions can exist, such as temporary absences due to illness, education, business, and others.
Common scenarios where you can claim your partner as a dependent
Claiming a partner as a dependent isn’t as fancy as it sounds, but it’s plausible. Here are common scenarios enabling you to do so:
Co-habiting Before Marriage: You and your partner share a home, and you pay more than half of your partner’s living costs. However, your living situation cannot violate local laws, as in some states, “cohabitation” by unmarried people is against the law.
Unemployed Partner: Your partner’s tie with working life is severed (e.g., due to health issues or being laid off), and you bear most of the living expenses.
Supporting Student Partner: Your partner pursues their education, and you shoulder the majority of their expenses.
Take this interactive IRS quiz to determine whom I may claim as a dependent.
How much will I get if I claim my girlfriend as a dependent?
Now the pivotal question: what’s the advantage in dollars and cents?
In essence, claiming your partner as a dependent will slash your taxable income by $500 with the Other Dependent Tax Credit. 3
If you already qualify for Head of Household status with another dependent, then it is possible your deduction may be more. 4
Remember, there’s no one-size-fits-all answer. When tax complexities strike, consult an expert!
Is it better to claim my girlfriend as a dependent?
Honestly, like most tax questions, the answer is: it depends.
If you’re covering your partner’s majority expenses and they’re fulfilling all IRS criteria, then claiming them can bring solid tax savings.
Yet, bear in mind:
If your partner earns substantial income (greater than $4,700), they might lose personal benefits by becoming your dependent.
By claiming your partner, their Social Security or medical benefits may take a hit.
So, assess your partner’s income, benefit entitlements, and your tax situation. Then, tread wisely.
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Important Rules to Keep in Mind When Claiming Your Partner
When filing taxes, it’s crucial to understand that both parties are responsible for the accuracy of each other’s tax reporting and liability.
It’s worth noting that tax advantages and disadvantages exist in the scenario of being married and filing jointly, such as potential reductions in your tax bracket and sharing of business losses. So, it may be something to consider.
Can I claim my girlfriend as a dependent if she has no income?
In a nutshell, yes! If your girlfriend had no income in the tax year, you might claim her as a dependent. Given you provide over half of her total support and she lived with you all year, you’re golden.
For 2023, your partner’s gross income should not exceed $4,700.
However, keep in mind that in cases where public assistance or Social Security benefits are her primary financial sources, claiming her could negatively impact those benefits.
Learn the answer to do you have to file taxes if you have no income.
Remember: tax waters are often murky. When in doubt, lean on a tax professional’s shoulder!
Support factors
Answering the support question plays a hefty role in determining who qualifies as a dependent.
You shouldn’t just share the living cost; you should pay more than half of it. Remember, it includes an array of expenses, like food, clothing, education, or medical expenses.
The implication of your partner being claimed by someone else
Here’s a key rule: if someone else is claiming your partner as a dependent, you’re out of the game. The IRS rules say a person can be claimed as a dependent by only one taxpayer in a single tax year.
This could happen if your partner perhaps lives part of the year with someone else like a parent.
Another possibility is if your partner is legally married still, then they would have to file a married, filing separately return.
So, if your partner qualifies as someone else’s dependent, even if they don’t claim them, you can’t claim your partner.
Frequent Situations Where You Can’t Claim Your Partner as a Dependent
Considerations for Non-resident or Non-citizen partners
If your partner isn’t a U.S. citizen, resident, or national, the dependent claiming game changes. Notably, nonresident aliens cannot be claimed as dependents.
However, if your partner is a resident of Canada or Mexico or a U.S. national, you may claim them. But they should be living with you full-time. 2
This rule extends to partners awaiting changes in their residency or citizenship status. In such cases, you must wait until their status changes before claiming them.
When your partner earns more than the stipulated income threshold
When your partner’s income level sails past the IRS limit ($4,700 in 2023), claiming them as a dependent slips off the table. 2
Any part-time job, seasonal work, or income source counts, even those seemingly negligible. As soon as they cross this threshold, regardless of how heavily they rely on you or where they reside, they can’t qualify as your dependent.
Make sure to stay updated on IRS rules. They adjust the income limit for inflation annually, which changes this income ceiling. Keep an eye peeled for those IRS updates!
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How to Officially Claim Your Partner on Your Taxes
To officially claim your partner as a dependent on your tax return, you will do this when you file your taxes.
Thankfully, this is made easier with online software companies like TurboTax or H&R Block.
The same is true when you are trying to figure out how to file taxes without a W2.
Necessary steps to claim your partner on your taxes
You will first identify them as “other qualifying dependent” or “other qualifying relative”.
Gather the facts first: Confirm your partner’s income, residency, and who has been supporting them for more than half the year.
Document expenses: Keep track of all relevant bills and receipts to demonstrate your majority support.
Use tax software or a professional: Follow prompts about dependents in tax software like TurboTax. They could guide you through the process and specifics.
Complete relevant Tax Forms: Prepare the necessary forms such as Form 1040 and Schedule H and have proof of residency, financial support, gross income information, and certification of your domestic partnership to support your claim.
File your return: Don’t forget to include your partner’s details and tick the correct boxes.
Remember, the devil is in the details. So carefully evaluate your situation to avoid missteps, and consult with a tax professional when in doubt.
Pitfalls to avoid while filing tax returns
While preparing to file your tax returns, beware of these common pitfalls:
Incorrect income calculation: Ensure you tally your partner’s gross income accurately. Reminder: it should not eclipse $4,700 in 2023.
Overlooked Living Qualification: Your partner must have resided with you the entire year. Temporary absences (illness, education) can be exceptions.
Ignoring Other Claimants: If someone else is poised to claim your partner as a dependent – even if they don’t – you can’t claim them.
Emergency Funds Consideration: If your partner taps into their savings for a large expense, this could speak against you providing most of their support.
Forgotten Documents: Maintain a record of bills, receipts, and other expense documents.
The IRS overlooks no mistakes, so take care and stay informed. When in doubt, professional tax help is a button away.
Frequently Asked Questions (FAQ)
Intriguing question! Here’s the short answer: Your partner’s marital status may indeed affect your ability to claim them as a dependent.
For instance, if your partner is married and files a joint tax return with their spouse, you can’t claim them as a dependent.
Remember, tax rules are lock-key specific, and bending them can lead to penalties. Always seek advice from a tax professional.
While you might be able to claim your partner as a dependent, laying claim on their children as dependents is unlikely. IRS rules are clear: you can claim a dependent only if they’re your child or relative.
Since your partner’s children don’t fulfill this requirement, you can’t claim them unless they can be considered your qualifying relative AND you provide more than half of their support.
As always, it’s best to run this by a tax professional for clarity on your unique situation. All we tax-seers can do is guide; the decision falls on your shoulders.
Here’s the hard truth: if your partner didn’t live with you all year, you couldn’t claim them as a dependent. IRS rules are stringent about this: your partner must have the same home as you for the entire year. That is 365 days, no less.
However, IRS grants a green light to temporary separations due to special circumstances like illness, education, military service, or even a holiday. The key lies in their intent to return and, of course, their follow-through.
Stay wise and stay informed, and consult with a tax analyst to seal your decision with assurance.
Get Online Help
Navigating tax rules and regulations doesn’t need to be overwhelming. With the advent of online help, understanding whether you can claim your partner as a dependent becomes considerably more manageable. Here are a few benefits of seeking online help:
Convenience: With online help, you can access the information you need anywhere, anytime. No need to schedule appointments or deal with traffic to get to a tax office. You can get the updates and instructions right from the comfort of your own home.
Accessibility: Some great examples of accessible platforms are TurboTax, e-File, and H&R Block which provide 24/7 support and resources. They offer a wealth of information and experts at your fingertips.
Expertise: Apart from the convenience, these websites employ tax experts who deliver professional analysis and guidance tailored to your specific needs. Specifically, you can use TurboTax Live Full Service for someone to do your taxes from start to finish. Or you can ask questions with TurboTax Live Assisted.
File your own taxes with confidence using TurboTax. This can greatly simplify the process and minimize potential missteps.
Now, Can I Claim my Unmarried Partner as a Dependent is Up to You
As they say, “Ignorance of the law is no excuse”. The same holds true for tax rules.
Falsely claiming a dependent can lead to severe penalties, not just a dinging of your wallet. You’d be sailing the choppy waters of tax evasion, which can bring on hefty fines or even dark days behind bars.
In blatant cases, the IRS could impose a Civil Fraud Penalty. That means a penalty amounting to 75% of the unpaid tax amount resulting from fraud. 5
In short, play by the rules! Accurate and clear tax filing may seem tedious, yet it will steer clear of any legal trouble. Remember, it’s always safer to ask if you are unsure!
Now, are you wondering why do I owe taxes this year?
Source
Internal Revenue Service. “Tax Tutorial.” https://apps.irs.gov/app/understandingTaxes/hows/tax_tutorials/mod04/tt_mod04_glossary.jsp?backPage=tt_mod04_01.jsp#dependent. Accessed October 23, 2023.
Internal Revenue Service. “About Publication 501, Dependents, Standard Deduction, and Filing Information.” https://www.irs.gov/forms-pubs/about-publication-501. Accessed October 23, 2023.
Internal Revenue Service. “About Publication 501, Dependents, Standard DeductionUnderstanding the Credit for Other Dependents.” https://www.irs.gov/newsroom/understanding-the-credit-for-other-dependents. Accessed October 23, 2023.
Intuit TurboTax. “Guide to Filing Taxes as Head of Household.” https://turbotax.intuit.com/tax-tips/family/guide-to-filing-taxes-as-head-of-household/L4Nx6DYu9. Accessed October 23, 2023.
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If you have a car loan, making your payments on time and in full each month should help build your credit over time.
Having good credit can save you a significant amount of money in interest fees on a car loan. Ideally, you’ll want a credit score of 660 or higher to get a favorable interest rate, but did you know that having a car loan may also help improve your credit?
We’re going to explain how car loans can affect your credit report and how they may be able to help raise your credit. You’ll also learn how to find the best car loans to help you save money on your new vehicle.
Is a car loan good for your credit?
Applying for a car loan can hurt your credit temporarily, but your credit can recover and even improve in time. When you apply for a car loan, the lender needs to run a hard inquiry to check your credit history, which is what can lower your score. The decrease can also happen if you refinance your car, but in both cases, the impact is usually minimal.
The good news is that a car loan can help you boost your credit in the long term. One of the primary factors that determines your credit score is your payment history. If you take out a car loan and make your monthly payments on time, these payments are reported to the major credit bureaus. If you’re wondering how fast a car loan will raise your credit, the answer is that it can take a few months to start seeing results.
One way to ensure you make your monthly payments on time is to set up automatic payments. After months of making these on-time payments, the consistent positive payments should far outweigh the temporary decrease from the hard inquiry.
How auto loans affect your credit report
Your credit report has a lot of data, and it can seem a bit overwhelming. Before going over how auto loans affect your credit report, it’s helpful to know the five factors affecting your credit score.
Each factor is weighted differently, so they’ll have a different level of impact on your credit. The following percentages are based on the FICO® scoring model, which is the most commonly used model.
Payment history (35 percent)
Your payment history is the most heavily weighted factor of your credit score at 35 percent. Late and missed payments can result in derogatory marks, which have a negative impact on your credit. On the other hand, when you make your car payments on time, the credit bureaus report them, which can help your credit.
Credit utilization (30 percent)
Credit utilization is how much you owe compared to your overall credit limit. Your utilization is often in the form of a percentage or a ratio. Ideally, you want to keep your credit utilization under 30 percent. For example, if you have a $1,000 credit limit and only owe $200, that’s a 20 percent utilization rate. Your car loan won’t affect your credit utilization.
Credit age (15 percent)
Your credit report also shows the length of your credit history, and this helps lenders see how much experience you have with credit. When you acquire an auto loan, you’re typically paying off the vehicle for years, and this is factored into the average age of all of your credit accounts. By having a long history of making your payments on time, it can help your credit.
New credit (10 percent)
Earlier, we mentioned that the application process can temporarily lower your credit due to hard inquiries. If someone is regularly applying for new lines of credit, it may be a red flag to lenders. But remember, financing a car can also help you build your credit over time, eventually outweighing the negative impact of the hard credit check.
Credit mix (10 percent)
The two primary types of credit are installment credit and revolving credit. Credit cards are considered revolving credit because when you make your payments, you can access that money again. With a line of installment credit, you owe a set amount each pay cycle, and car loans fall into this category. When you have a variety of types of credit, it helps improve your credit mix.
On your credit report, you will find two categories that will provide information about your car loan:
Types of accounts: In this category, you will find your credit mix, and under the installment accounts category, you will find your car loan as well as other installment loans. Other examples of installment loans include mortgage loans and student loans.
Current status: You will also see the status of your auto loan. If you make your payments on time, it may say that the account is “current,” or it will say “paid as agreed.” Basically, this showcases your payment history on a specific account. If you’re 30 days late on your payments, this can hurt your credit, and the lender may even repossess your vehicle.
It’s also possible that a reporting error inaccurately shows a missed or late payment, and this can unfairly lower your score. Should this happen, you can file a dispute to address it.
How to find the best car loan
It’s common for people to shop around for the best deal on a car, but it can also be helpful to shop around for the best car loan. When taking out a loan, one of the primary considerations should be the interest rate. The overall interest rate of the car can vastly change the price.
For example, let’s say you put $1,000 down on a $20,000 vehicle with a loan term of five years and a 5 percent interest rate. The total interest on the vehicle would be $2,513, making the vehicle cost $21,513.
Using that same example, you would pay far more at an 8 percent interest rate. At an 8 percent interest rate, the total interest would be $4,115, which is around $1,500 more than the 5 percent interest rate.
You may be able to find better interest rates by going through your current bank or other lenders. Good credit is another key factor in finding a good interest rate.
Repair your credit before shopping for a car
Your credit can have a major impact on how much interest you pay for your vehicle. According to recent data, the average car loan interest rate for a new car for people with a credit score of 781 or higher is 5.07 percent. If your credit score is under 661, the average interest rate for a new car is 8.99 percent.
If you need help with your credit prior to getting a car, reach out to Lexington Law Firm. There may be errors on your credit report hurting your credit, and we have a team who will work to address these errors on your behalf. Sign up today to get a free credit assessment.
Note: Articles have only been reviewed by the indicated attorney, not written by them. The information provided on this website does not, and is not intended to, act as legal, financial or credit advice; instead, it is for general informational purposes only. Use of, and access to, this website or any of the links or resources contained within the site do not create an attorney-client or fiduciary relationship between the reader, user, or browser and website owner, authors, reviewers, contributors, contributing firms, or their respective agents or employers.
Reviewed By
Brittany Sifontes
Attorney
Prior to joining Lexington, Brittany practiced a mix of criminal law and family law.
Brittany began her legal career at the Maricopa County Public Defender’s Office, and then moved into private practice. Brittany represented clients with charges ranging from drug sales, to sexual related offenses, to homicides. Brittany appeared in several hundred criminal court hearings, including felony and misdemeanor trials, evidentiary hearings, and pretrial hearings. In addition to criminal cases, Brittany also represented persons and families in a variety of family court matters including dissolution of marriage, legal separation, child support, paternity, parenting time, legal decision-making (formerly “custody”), spousal maintenance, modifications and enforcement of existing orders, relocation, and orders of protection. As a result, Brittany has extensive courtroom experience. Brittany attended the University of Colorado at Boulder for her undergraduate degree and attended Arizona Summit Law School for her law degree. At Arizona Summit Law school, Brittany graduated Summa Cum Laude and ranked 11th in her graduating class.