Resolution #1: Get a Handle on Household Finances

One way for moms to Make More, Be More and Do More in 2009 is to get a handle on your household finances. You’ll never feel in control of your money until you are actually in control of your money.

In my early years of earning money, I tried to master the art of taxes, investments, retirement, and budgeting all by myself. Let’s just say it didn’t go well. It was incredibly overwhelming, and it took a few mistakes to realize that my intent to control my financial life was just the first step in the process. The next step was hiring experts to help me. I started with a tax advisor service, then an accountant, then a financial planner, then an estate planning attorney, and now I’m ready to start professionally handing my bookkeeping for my business.

In that same spirit, since I am not a financial expert or advisor of any kind and merely a mom and wife who earns money and manages the household expenses, I called in the experts to help my readers. Two of my twitter friends, @danfreeman and @JessRS, were kind enough to offer words of wisdom.

@JessRS is really Jessica Reagan Salzman, founder of Behind the Scenes, LLC.

1. Don’t let the fear of trying to understand your finances keep you from undertaking the effort. “It’s OK to get angry, upset, frustrated, or feel fear when addressing matters related to money.  Meeting the feeling with acceptance will bring ease into your dealings with money.  If you find that your feelings are paralyzing you, reach out to a friend or trusted colleague for support.”

2. Take Advantage of Technology. “Many people, myself included, have found it increasingly more difficult to track their personal spending habits in the digital age.  I clearly recall how much easier it was to track my income and expenses when I dealt only in cash and had a trusty envelope system to clearly indicate how much money I had left in each budget category as the month progressed.  However, the ease of using a debit card has certainly led to my extensive use of plastic instead of cash.  After extensive searching, I’ve discovered a wonderful online system that allows you to incorporate the powers of the digital age with the age old wisdom of the envelope spending system: http://www.mvelopes.com/ Mvelopes! Check it out!”

3.Ask for Help. “Even the savviest money managers often become overwhelmed with business bookkeeping software and other aspects of business related to taxes and making business decisions regarding money.  If this is true for you, give yourself permission to ask for help.” I’m a big believer in asking for help – it saves you time and frustration, and often saves you money in the long run.

Dan Freeman, of Pursue Business Advisors, offers these tips:

  1. Manage your finances with Quicken Online.Everyone knows what Quicken is. It’s what we all should be using to help manage and organize our finances. But, if you’re like many would-be money managers, you hesitate to invest the money and install it on your computer just to clog up space and never get used. Enter the online version of quicken. It’s totally free and there is nothing to install. The program keeps things very simple. You tell it what banks you want to connect with, and it does the rest. The program will alert you of payment due dates based on your past payment history It will calculate your “real balance” (meaning what you will have after you pay all your regular bills that are due before your next paycheck). It has an easy-to-use budget maker. The starting point is what you have done for the past 90 days. You can adjust from there, being a little more realistic than if you started a budget from scratch. As everyone knows, budgeting is difficult and we almost always set unrealistic limits on ourselves. This tool will show you what you currently spend and help you make better decisions on where money could be saved. Handy features like mobile alerts and payment scheduling make this program a must for people who want to manage money but also want to keep things simple.”

  1. Store receipts electronically. “Don’t chance losing your receipts or cluttering up filing cabinets. Instead, store them electronically. You can either purchase a NeatReciepts scanner or use any standard scanner. Any charity receipt, un- reimbursed business expenses, large purchases, freelance or 1099 expenses, and anything you are going to deduct on your taxes all should be stored. NeatReceipts will scan and store based on information on the receipt. You can also put receipts in folders on your computer based on however you will best be able to get to what you want. Just be sure to back up the data. You can also choose to store receipts on the Internet at a service like shoeboxed.com. If you want to forgo the scanning altogether you can just mail your receipts to a service like shoeboxed.com and they will sort, scan, and store them for you.”

  1. Evaluate your insurance.Take a good close look at all of the different insurances you are using (health, auto, home, and life). First, make sure your coverages are all appropriate. You may need to increase your life and home coverages. Second, you should take this opportunity to do some shopping. Call your insurance agents/companies and evaluate the charges. Then get cost estimates from some other companies and see if you can save significant money by switching providers. Be sure not to compromise coverage or quality of the company insuring you, but if you can find similar coverage and similar quality for less money – go for it! Everyone complains about the high cost of health insurance. It’s not a place you want to compromise, but it is a place you could save significant money if you pay for your own. If you haven’t yet, look into high deductible health insurance paired with a Health Savings Account (HSA). Instead of all of your money going to the insurance company, most of it goes into a savings account. All the money you put into this account is tax-free. This account can be used for all health expenses; it can grow with interest, and can then be changed into an IRA when you retire. It is, hands down, the best way to do health insurance right now.”

Thanks so much to Jess and Dan for the great (and easy to implement) ideas.

My personal financial management New Year’s Resolutions are:

1. Start using Quicken before January 1st.

2. Use Shoebox.com to help keep my desk clean and my tax records organized.

Stay tuned Saturday for Resolution #2: A Healthier You


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3 responses to “Resolution #1: Get a Handle on Household Finances

  1. I think Jess’ number one is the most important step for anyone to take. Fear keeps people from wanting to know what’s really happening with them, and if they can break through that and really look at the numbers, most people find out that they’re really not as bad off as they thought they were, and with a few adjustments can pretty much get along for awhile.

  2. Hi Mom With Money,

    This is Chelsea from Quicken Online. Of course, I like Dan’s suggestion that you use Quicken Online to get a handle on your finances in 2009 🙂

    One of the first steps in overcoming the fear related to money management that Mitch mentions is seeing all of your accounts in one place. Not only will you get that backward view Dan mentioned, you’ll get something other Web-based PFMs don’t offer: a forward-looking view of your money.

    Hopefully Quicken Online will help you focus on the future, and make wise choices as a result of seeing what’s down the line. I look forward to hearing how your experience turns out.

    – Chelsea, Quicken Online

  3. Also, make sure that you don’t forget your maximum IRA contributions for 2009. And if you own a small business you should start a SEP.
    Here are some details:

    http://www.erollover.com/blog

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