5 ways to handle your finances

Here are a few simple ways we manage our money. These are tried and true so check them out.

1. Sit down and have a conversation with your partner about expectations and needs you may each have. Do you have separate accounts? If so, is one of you more frugal than the other? Does that cause tension? It is so important to be on the same page financially otherwise there could be cause for resentment. Make sure that in this conversation you discuss setting aside "play" money for each other, who will handle the bills (maybe set up a bi-weekly meeting time to touch base), and money for savings accounts (i.e., recurring bills, retirement, college savings, etc.)

2. Save, save, save. Here are some easy ways to get extra money without feeling strapped all of the time.
A. You have a car payment that you've made for 4 years. Then you finally get it paid off- hooray! Instead of redirecting that money towards misc. spending, continue "making" that payment into a savings account. In this way, when you are ready to get another car, you have money in savings to either put a partial, or even a full, down payment. Even when you make that happen, continue saving that money and you will never need to take out a loan where you lose thousands of dollars in interest.
B. Open a Roth IRA and try to max it out. Even if you can only set aside a $100 a month at first, this will be money that you can take out tax free at 59 and a half years of age (you've already paid taxes on this money with every paycheck.) The latter is unlike a 401K where you pay taxes when you go to withdraw the money at retirement.
C. NEVER give up an employer match. If your employer offers a match then at least deposit that 2%, 3%, 4%- whatever it may be. That is money you have worked hard for! Don't give that up. Once you get your accounts automated, you won't miss that money. I promise! Just sign up and have them start taking that money out. Then, when you feel comfortable, increase the amount 1-2% every 6 months or so until you reach that 10-20% mark. The last thing you want is to have to work the rest of your life to make ends meet.
D. Have your bank create several savings accounts for you. This is so simple and effective because the money doesn't get lumped into one savings account where it can get "lost in the mix." You can see where it is going and how much of it is going there. Here are the accounts I had created for us:
1. HOA, lawn care, and hazard insurance
2. Car registration and car insurance
3. Home and car repairs
4. General savings
5. School tuition fees
What I recommend is taking the annual fee for your bills and dividing it by 12 then adding about 10% (or more, if you can) so that you end up with a padded account. Let me give you an example. Let's say my HOA is $144 per year (I wish!), lawn care is $280 per year, and my hazard insurance is $350 per year. I add all three of those up and get $784 that I need per year. I divide that by 12 months to find out how much I need monthly and get $64.50 so I'll round up to $65. Then I want some cushion in that account so I'll add another $6 (to $12) per month leaving me with $71 per month in account number one. At the end of the year I will have an extra month's payment in there because I am saving that additional 10% and over time the account will just have more and more money in it so that I never worry about, "How am I going to pay that next month?" It's a great and easy way to set aside funding.
E. Save that change! Get a money jar and save all of your change. You really should try to limit your cash transactions because it is hard to keep track of the green, but, on those occasions where you do use cash, save the change, don't reuse it! At the end you'll have a fun little account saved up.

3. Take the credit cards out of your wallet NOW! Just having them on you is temptation in and of itself. Cut them up, freeze them, put them somewhere where they are not readily available. You can live on what you make alone, and, if you can't then it is time to reevaluate your budget. What can you cut out? As suggested in the comment below, maybe turning off your cable would be a good alternative saving you hundreds (or thousands) a year. Call your local energy company and find out if they have an economic alternative (our co-op allows us to lower our base premium by agreeing to essentially shut our electricity off for minutes a day and only use certain appliances during predetermined hours.) What about eating out? I've mentioned it before and I think this is where many of us spend the most. And where do all of these extraneous expenditures end up? On the credit card! I applaud you for paying off your credit card bills monthly; I was there and did the same. BUT beware: Should there be one off month where something happens, you need extra money, or there is an emergency, you could fall behind and possibly never really recuperate. That is why living off of what you have at the moment works most effectively.

4. Barter services instead of trading. I know it sounds strange, but essentially trading involves some form of currency whereas bartering is simply exchanging one service/item for another. So... barter with people! If you NEED a date night, have a neighbor watch your kids in exchange for you watching theirs. If you provide tutoring to kids, offer free lessons in exchange for babysitting. Do you garden? Trade your fruits and veggies for eggs, meat, and the like. You get the idea. We have more available to us than we think. Make use of it! Do you like to sew? Shop yard sales, find plain onesies and you are on your way to making it big in the baby market, which you can then exchange with someone for... well, anything. Be creative! Use your talents and resources to put more cash back in your pocket.

5. Finally, find everything and anything free! Remember the library (free movies and books!)? Free summer movies at the theatres? Is someone offering you furniture that you don't want? Take it and sell it! Maybe they don't want to go through the trouble of posting an ad so a little of your time can go a long way. Go to the parks, run through sprinklers, go on walks, let the kids use scrap papers to make art, use hand-me-downs, and remember that at the end of the day, you are looking to be happy. So, volunteer with the kids and spread the joy a bit. The Humane Society, Habitat for Humanity, Meals on Wheels, etc. these are all ways that you can give back yet fill your days while teaching your family how to have an open heart.