I've learned my lesson...Part One

Hopefully.

2009 was an interesting year in our household. We entered it with a 2 month old baby. Wow!! Only one of us working fulltime. Big transition for me after growing up in a 2 income house my whole life. (Yes, I know for Ariel's first two months I also wasn't working - but I was SO busy learning about the new person we had living in our house that money (or lack of if) wasn't really on my mind.) Since we decided I would stay home with Ariel, the money matters became my territory. So now, I want to take some time to reflect on the year and especially the lessons I learned about about being the household financial manager. This is a fancy name, but I think I earned it this year. If you manage the money at your house, you probably even deserve a name plate with this title. Managing the money is complicated (if not, stressful) business.

A few lessons learned:

First stop...tax season. Wow. This year it was crazy!!! I've filed our taxes for the last 5 years. It's always stressful for me, but this year really got me good. Jason is considered self-employed, but up until 2009 (well really 2008) his taxes were still withheld by his employer. Not this time. Our big mistake was not only not making quarterly payments, but we also didn't effectively save for his social security taxes (we have a low income and usually pretty much get full state and federal refunds, but SS doesn't work that way...you have to pay it). To make things a little more complicated, he isn't just self-employed...he is clergy self-employed (=a whole different set of rules). Further, he worked part-time with a church in VA (not NC where we live), so I had to file in two states. Past years and at first this time, I filed with H&R Block's online software, but they aren't very effective with the self-employed clergy thing...so I had to move on. Unfortunately, I had already paid a H&R specialist to review our taxes before I realized she didn't know what she was doing. I found Turbo Tax cause my dad always uses them and WOW! Awesome. It all worked out...I love turbo tax. I even managed to get my money back (close to $200) from H&R Block. We ended up having to pay some (SS), but the amount quoted by H&R Block was so much higher than Turbo Tax that I could have paid our Turbo Tax amount and not gotten the $200 refund and still saved money. This took months though. This year we are much better prepared. I did some calculation to predict our tax liability. We set up a bank account just for tax money and budgeted to pay it monthly (and I actually did it!!). I probably should have started making quarterly payments, but several factors made me hesitant. Maybe we will do it that way for 2010...I've got to do more research.

Lessons learned:
1-for us...Turbo Tax is much better than H&R Block as online tax prep software,
2-don't just accept the numbers a tax prep program gives you...read it yourself, ask people you know who can help you understand...you could be giving away money,
3-just a reminder, start early (even if you do, you might end up ready just in time for 4/15 because of craziness) - it took me 2 1/2 months to get it all done and HOURS of headaches

Next stop...Coupons!!! They really do save you money. Grocery shopping (and other shopping) is more complicated with coupons and it takes much more prep time to go to the store....and the shopping trip might take longer too, but you really do save money. I budgeted about $200 a month for food this year. That seemed a little tight to me, but it was what we had and I felt up to the challenge. Coupons were a big part of how we managed to make this budget work. We use them everytime we grocery shop and I occasionally make special trips to Harris Teeter for double and triple coupon deals. As a result, we almost alwasy save at least $20 per grocery trip...I try to only shop one or two times a month sometimes less. Several times we even saved $50-$60 with coupons!

Lesson learned:
1 - Shopping with coupons takes time, but it is worth it. I did the math one month and it took me 4 hours to make our grocery meal plan for the month, grocery list, coupon match-ups, store match-ups, and do the actual shopping - but I saved over $80 using coupons (and sales) = I got paid $20+/hr for my work. Not bad in my book...especially since that was $80 we didn't have to spend on food that month.
2 - Coupons are money. Seriously, if you saw a quarter on the ground you would pick it up right? I know I would. I would be excited too. But how many people don't bother to use $.35 off coupons because they are so small? Just pennies right? Not when you need every penny. Plus, 3 of those coupons equal $1.05. It really does add up. There are big coupons available too...and they really can save you money.

Third...a little more about grocery shopping.

Some general lessons.
1- Price comparison is important. I started a price book this year, but honestly haven't followed through with it. The pattern that emerged was that Wal-mart was consistently the most inexpensive. If Harris Teeter has doubles or triples going on, then I would buy there for things that cost only change. Otherwise, I watch the ads (and blogs) for special store savings.
2 - Store brand is often most inexpensive and sometime the cheapest. (This year I learned the difference.) Even with coupons this is many times still true. It pays to look though. I usually shop based on the price per unit now and it has saved us money. As a result, I can spend a little more to get name brand on products that are important with my family (like Pepsi for hubby, dish washing detergent, yogurt, dog food, and cloth diaper detergent) - I stock up on these coupons if I can, but generally we still pay a little more for these.

Fourth times a charm...yeah I don't know what that has to do with anything!? Anyhow, onto utilities. At home, we are being more careful with our water usage - less bath time for one member of my family (not Ariel), shorter showers, turning it off when we can, using our new HE front loading machine (which I just love!!). We are doing the same with electricity. Our thermostat stays are a lower temp in the cold months and a higher temp in the hot months. We are learning to use our ceiling fans to help with heating and cooling (heating is new for us with the reversal of the direction). We take the time to turn things off (especially lights). We raise and lower our thermostat when we are going to be out of the house. We use windows when the temperature outside it conducive - this I love, but Jason hates...he's a trooper though. Along with a mild summer and fall, we have really seen savings this year. Our utility bill has been significantly and consistently lower this year than last year and rates went up this year!!! Like in the $30-50/month lower range.

Lesson learned: A little attention to conservation really can effectively save money around the house.

Five and final for today...saving with baby. We made a few decisions regarding Ariel that have saved us money this year. Generally, saving money was not the primary motivation, but a secondary benefit. Disclaimer, these things worked for us - I do not think they are the only good way to parent by any means. I'll try to keep them short (for me) and sweet cause these things are all over the place if you want to know more and some I've already talked about this year in earlier posts.

Lesson learned:
1 - Breastfeeding saves money cause it is free and formula (even with coupons) is expensive.
2 - Cloth diapering can be done in a variety of ways and almost all of them save major money. We chose a more expensive variation (BumGenius 3.0 one-size pocket diapers) and paid less than what we would have for 6 months worth of disposable diapers. We also use cloth wipes made from repurposed materials I had around the house and a homemade mix to save a few dollars (and a little bum).
3 - Baby doesn't have to eat baby food from jars. Fresh and canned produce can be cut up or put in the food processor. Meats can be done the same way. Lots of adult foods, like dinners can be "processed" into a healthy baby meal as well. If baby eats what you eat - no extra money spent. If you buy, food specially to make into baby food - still save at least half what would have been spent on little baby food jars (even the generic ones). These things don't take much more effort or time. Confession: we still buy a few baby food jars though for convenience when we are traveling and such.
4 - Staying at home with baby saves money (and heartache). We don't live close enough to family for anyone to keep Ariel all day. I would have to work at least a part-time job just to pay for childcare.

Those are a few financial lessons I've learned this year. There are a couple more that I plan to post in a 2nd part of this post later. I've just run out of time for now...you are probably tired of reading too (if you made it this far). :)