Tuesday, March 01, 2011

Save Money Through Better Money Management

Thank you to TurboTax for sponsoring my writing about household finances.Learn more about how TurboTax can help you find every tax deduction you deserve. I was selected for this sponsorship by the Clever Girls Collective, which endorses Blog With Integrity, as I do.

In my family, I'm the CFO - Chief Financial Officer. My husband and I decided early on in our relationship that I was better at managing the finances, and ever since I've been the one paying the bills, watching the accounts with a sharp eye, and preparing our taxes each year.

My job certainly isn't an easy one. We've gone through many periods of single-income living, several months of complete unemployment, and we each have small businesses with our freelance work that provide some income, but nothing we can reliably count on. Keeping our checking account above zero, our credit cards under their max, and our tax bill as small as possible is a juggling act that requires skill and organization.

While I'm not perfect at managing our money, I have picked up a few lessons along the way. Here are some of my suggestions on making money management a little easier for your family.

Decide who is the primary bill payer. This alone will save you money in late fees. It's difficult if you and your partner are both paying the bills to keep track of who paid which bill each month. Either designate one person as the primary bill payer for all bills, or designate which person is assigned which bills to pay. For us, it's easier for me to pay all of the bills and then update my husband regularly on the state of our money. If you aren't the one to track the money, have routine conversations with your partner about the bills so you're not completely in the dark about your finances.

Set a solo-spending limit. In our house, any frivolous purchase is limited to $25 without double checking it with our partner. So if I want a new $30 book, I'm going to run it past my husband first to make sure it's OK to buy it. He does the same for his purchases. Setting a limit on impulse buys makes us think a little more before acting on those more expensive impulses, and ensures there won't be a large surprise the next time we look at our bank account.

Save your receipts! If you have a small business (and that includes any money received as a result of your blog), receipts are vital to keeping your tax bill low. You may think you're just having fun at a blogging conference, or splurging on a new blog template design, but if you make money from your blog then those are legitimate business deductions as well, and will reduce the amount of tax you'll pay on that blogging income.

Just remember: when tax time comes, if you can't prove it with receipts, then it didn't happen and you can't claim it. So keep a folder someplace safe and stash any receipt remotely related to your business in that folder throughout the year. When it comes time to do your taxes in the winter, you'll be glad you kept yourself organized as you enter your deductions and watch your tax bill shrink!

What about you? Do you have any good money management tips to share?

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