For example, one of the goals we have is for our little one be financially savvy with her money when it comes time for her to move out.

Raise a Super Saver

Here are five ways parents have successfully gotten their kids into saving their money.

1.  Match their savings: Low interest rates can be great if you want to refinance a loan, but it’s terrible for savers, especially young ones. With banks paying pitiful rates right now, parents might want to boost the return on the account by offering a match. Depending on their age, you perhaps may do a 1 to 1 match with their contributions. If they are older and can save a bit more, you can still choose to create an incentive by giving a bonus on a monthly or quarterly basis.

2.  Have them be a part of the team: This year for the family vacation perhaps you can involve your kids with the spending plans. Everyone one who pitches in the pot can have a special activity planned. Perhaps your little one can save up for an ice cream shop visit after visiting the park. Plan ahead and help them to see how much certain activities cost. Perhaps the kids can team up for a common goal – a win-win for the family.

3.  Make it a contest: If your child loves to compete, having a contest with a prize at the end can help  show him or her the value of saving for long term goals. If they save up enough for a video game console, like an Xbox by a certain date that you two choose, then offer to get them a game or additional controller.

4.  Keep it visual: Let’s be honest – saving money at the bank isn’t the most exciting thing for kids. Help them out by having a visual reminder of the progress they’re making, perhaps a chart or poster of what they are saving up for along with their current savings.

5.  Set the example: This is the best way to encourage your kids to save – lead by example. Whether it’s saving for a car, their college fund, or your next vacation, show them that you save as part of your money routine and it’ll be easier for them to follow.

Right now we’re saving our little one’s small savings in an online bank. When she gets older we’ll work with her on using her money to reach her goals.

Thoughts on Kids and Savings

For all the parents reading this, what has worked well for you and your family when it comes to getting your kids to save?

Moving to an IRA can give you more freedom with your investment options, as you’re not tied to only the stocks that your old employer offered.

Where to Move Your Money

One of the first questions you may have is deciding which brokerage to roll  your money into so you can get your IRA off to a good start. If you already have an IRA with someone you can easily roll it over there so you can maintain a simplified financial system. If you don’t have an IRA already opened or you’re not happy with your current brokerage, here are some things to consider to find the best option for you and your money.

When looking at brokerages, check their fees, including commissions. As you’re building your investments you don’t want fees eating up your returns.

Open a Traditional or Roth IRA?

The great thing about IRAs are the tax advantages associated with them. With Traditional IRAs you can deduct your contributions. With Roth IRAs, your withdrawals are usually tax-free. You have to decide what is best for your circumstances. For us, we decided to have Roth IRAs.

Currently annual contribution limits for either account are $5,500 if you’re under 50 and $6,500 if you’re older. That gives you a great opportunity to stash your money away over the years.

Using Index Funds for Your Portfolio

You don’t need much money to get started with investing. You also don’t need a complicated plan. There are many ways to diversify your portfolio easily. One way to do this is by investing in index funds.

Looking for low cost index funds and Exchange Traded Funds(ETFs) can be beneficial for your portfolio. These are funds and ETFs that track a market index such as the S&P 500.  Since they are typically not actively managed but automated you have much lower fees.

Building Your IRA

Now that you have gained control over your money and have it in an IRA it’s time to set up an easy to maintain system to grow your portfolio. The easiest way to stay on target for your investment goals is to go ahead and automate your IRA contributions. It has certainly helped us avoid skipping deposits.

You may have a fixed budget now, but if you simply increase your contribution every time you get a raise, you’ll be surprised at how quickly you build up your investments.

Thoughts on Rolling Over your Money

How many of you have money left in a 401(k) at an old job? Are you rolling it over to your current brokerage or will you start fresh?

No Money for Your IRA Contributions?

With those tax benefits, you’d think that most people would  be aggressively contributing to their IRAs. However how many people actually maximize their contributions (currently it’s $5000/year)? Why is that the case?

One of the biggest obstacles I hear from people about why they are not contributing money into an IRA is that they don’t have the extra money in their budget. With budgets already tight, they feel like retirement contributions are out of the question.

The good news is that you can make some adjustments to your budget that will help you save for later without drastically sacrificing your budget now.

Finding Money in Your Budget

If you’re looking to jump start or increase your retirement contributions, here are some big ways to find money in your budget.

• Proper Withholding on Paychecks: If you haven’t reviewed your w-4 in awhile, you may want to look at it again. When it comes to withholding on your wages, you could optimize your finances by simply adjusting to what could work best for you. For some, being conservative with their withholding means they can get a bigger refund come tax time, which they can immediately use to fund their IRAs in one swoop. For others, getting more money in their paychecks throughout the years can be the right choice as they set up automatic contributions to keep them on point.
• Take a Week to Shop Insurance: Sometimes we can get into a comfortable habit of staying with the same insurance company simply because we’re used to dealing with them. There’s nothing wrong with being loyal to a good company, just make sure you’re getting value for your loyalty. For us, switching car insurance has cut our premiums by almost half. For my mother, calling around got her current insurance company to lower her bill.
• Consolidate Student Loans: If you qualify for lower rates with a student loan consolidation, you should seriously check it out and run the numbers. The money saved can then be redirected towards your IRA.

None of these adjustments will hamper your budget now, yet they can save you a good amount of money. If possible, once you make the change set up an automatic contribution to your IRA so you can stay on target.

Thoughts on Funding an IRA

I’d love to hear from you about your retirement contributions. How did you find money to contribute to your IRA? What has been the easiest adjustment you’ve made? What has been the hardest?

Contribute More to Your 401(k)

Did you know you can do yourself a (double) favor by contributing more to your company’s 401(k)? How? When you opt in and have a portion of your income set aside for the account, it’s done pre-tax. That means you’re lowering your taxable income for the year while putting money aside for your retirement. It’s a win-win.

If you haven’t contributed enough to get a full match from your employer, see if you can at least increase to that amount. That’s extra money that’s free and can go a long way towards your retirement with the power of compound interest.

Take Advantage of Flexible Spending Plans and Health Savings Plans

If your employer offers a Flexible Spending Plan or a Health Savings Plan and you’ve signed up for it, make sure you’re taking full advantage of it. They are considered tax favored plans because your contributions are pre-taxed- this allows you to get reimbursed for medical expenses while lowering your taxable income. Keep good records and all your receipts. Check to make sure you’re not wasting any of your contributions by making sure you have qualifying medical expenses.

While most jobs having open enrollment in the fall, you can still keep track of your medical expenses through out this year so you can plan for the next year.

Adjust Your Withholding on Your Paychecks

Depending on your needs and particular situation, you have some choice with your withholding on your paychecks. If you received a big tax refund last year and expect your finances to remain the same this year, you may elect to adjust your W-4 and have less taken out of your paychecks. That means getting a smaller tax refund next year, but having a small bump in your paychecks through out the year.

If you’re expecting a major event this year such as getting married or becoming parents, then you should consider sitting down with your Human Resources Department to update your withholdings.

Thoughts on Preparing for Taxes

I’d love to hear from you about your taxes and finances. How was this past tax season for you? What plans do you have for the rest of 2013?

I can’t list all of the bizarre taxes, but I want to list a few of my favorites.

Vending Machine Tax

I can see how some taxes are used to encourage or discourage certain behaviors. Some states have high taxes on goods like cigarettes that discourage some from smoking. California may have had a similar thought with their tax trying to get residents to  choose fresh foods instead of grabbing snacks at the vending machine. Fresh fruits are exempt from the tax, but if you get them from a vending machine, the food is taxed 33%. When you want fresh fruit and you live in California, go for the fruit stand instead and save yourself some money.

Bagel Prep Tax

Speaking of food, I found a NY tax on the books that charges customers about 8 cents if they have their bagel sliced or prepared. A Bruegger’s Bagel owner didn’t find out he was out of compliance until after an audit. Besides having to pay the taxes, his customer were very upset about the increase in price.

Tattoo Tax

Moving off of food, I found a tax that can hit lots of people that want to change their looks. If you live in Arkansas and you’re planning on having electrolysis to remove unwanted hair, getting a tattoo, or even just getting your ears pierced, then be prepared to pay a bit more taxes. The state charges a 6% tax on these services.

Durham’s Pet Tax

This tax isn’t bizarre per se, but it’s a different way to handle a typical county fee. As a Raleigh resident  I was relieved to find out that we avoided a pet tax that Durham residents have to pay.  If you own a cat or a dog that was spayed or neutered, you have to pay $10/year as part of your personal property tax. If you haven’t had your pet fixed, it will cost you $75. Before it was a tax, the county’s animal control sent out bills to collect the fees. One reason the switch was made was to increase payment compliance.

Thoughts on Bizarre Taxes

I’d love to hear from you about bizarre taxes. What is the weirdest tax you’ve heard about? Have you paid for a bizarre tax? What was it for?

I want to share some of the biggest ones available right now so you can see which one your family would qualify for and would benefit from the most when you prepare your taxes before the tax deadline.

American Opportunity Credit

Originally called the Hope Credit, the American Opportunity Credit allows those seeking a post-secondary education a tax credit of up to $2,500 per qualifying student. Qualified expenses include tuition and fees.

It has been expanded from covering 2 years to 4 years and now you can claim the expenses you paid for required course materials.

Lifetime Learning Credit

Like the American Opportunity Credit, the Lifetime Learning Credit allows you to receive credit for qualified education expenses you paid.

There is no limit to the number of years you can use the Lifetime Learning Credit, so if you’re taking classes to keep certified, this may be an option for you. Please be aware that you can not claim both the American Opportunity Credit AND Lifetime Learning Credit in the same year.

Deducting Tuition and Fees

If your income doesn’t allow you to take advantage of the American Opportunity or Lifetime Learning Credit, you may still be able to deduct some of your education expenses under the Tuition and Fees Deduction. This deduction can be worth up to $4,000, lowering your taxable income for the year.

To qualify for this deduction, please make sure that you’re claiming this for either yourself, your spouse, or your dependent.

Student Loan Interest Deduction

Just because you finished college doesn’t mean you have no tax breaks. If you have student loans, you may be able to deduct the interest you paid on the loans in 2012. If you meet the income requirements (modified adjusted gross income (MAGI) is less than $75,000 for single filers and less than $155,000 for those married filing jointly) then you may be able to deduct up to $2,500.

Even better, you don’t have to itemize your deductions to claim this on your taxes. Federal student loans would meet the criteria for deducting student loan interest, but a loan from a relative would not.

Thoughts on College and Tax Breaks

There are other tax deductions you may want to look into, including setting up tax advantage accounts for your younger children who won’t be attending college for some years. Using tax software like TurboTax can help you uncover what you’re entitled to and simplify filing your taxes so that you can keep more money in your pocket.

I’d love to hear from you about your family’s take on this topic. If someone in your family is going to college, which tax credits and deductions have you used?

1.  Go Online or Use TurboTax SnapTax to File

Using TurboTax online or SnapTax will make your life easy.  You don’t need to know the tax code.  TurboTax ask you simple questions related to your tax situation, puts your information on the correct tax forms, and gives you the tax deductions and credits you’re entitled to so that you can keep more of your hard-earned money.  You can also use TurboTax SnapTax from your mobile device to conveniently and accurately file your tax return in minutes.

2.  Don’t Miss Out On Filing and Your Money

The tax deadline is just a few weeks away so make sure you don’t miss out on filing your taxes.  Some new filers may end up thinking they don’t make enough money to file taxes, but if you had federal taxes taken out of your paycheck or are entitled to credits like education credits, or the Earned Income Tax Credit you may be missing out on a tax refund by not filing.

3.  Make Sure You Have All of Your Paperwork

I would say the most common problem I’ve heard people have while filing their taxes is that it’s hard to keep track of all of their documents. As the paperwork comes in, please have a folder or a tray ready to keep them safe until you decide to file.

Using tax software like TurboTax can help you get that information accurately submitted in a timely manner.

One note about tip income earned on the job. If you receive tips at your job, please make sure that you report that income when filing your taxes. Keeping a daily log of your tips as they come in can take away the headache of trying to remember everything that you receive. If you keep your employer in the loop, that information should be reflected in your W-2.

4.  If You Have Questions Talk to a TurboTax Tax Expert

If you are preparing your tax return and you have a tax question don’t hesitate to talk to a TurboTax tax expert who is a CPA, IRS enrolled agent, or tax attorney.  You can ask your tax questions for free.

Thoughts on Filing Taxes for the First Time

How many of you are getting your taxes filed for the first time? What is your biggest worry? Are you expecting a refund or do you think you owe money?

If you’re nervous about filing on time or worried about getting your taxes done right, there’s no need to worry.  I have a few tips to make this year’s filing easier on you.

Go Online and E-File

In my opinion e-filing has made getting taxes submitted easier and receiving my refund a bit faster. E-file with direct deposit is the fastest way to receive you tax refund.  The IRS estimates that 9 out of 10 tax refunds will be processed within 21 days.

Submitting tax returns through the mail can be time consuming and paper filed tax returns that are not e-filed are proned to mathematical errors and missed tax deductions and credits.

When you file your taxes with tax software like TurboTax you don’t need to know the tax code.  TurboTax will ask you simple questions so you get all of the tax deductions and credits you’re entitled to so you keep more of your hard-earned money.

Best of all, you may be able to file your federal tax return Free and save more money.

Have a Tax Question? Get Free Help

If you have tax questions don’t worry.  Only TurboTax lets you talk to tax experts who are CPAs, IRS Enrolled Agents, and tax attorneys while you prepare your tax return, free.

TurboTax’s blog is another great free resource that you can use to find tax tips and frequently asked tax related questions answered.

Prepare for Next Year

Though 2013 is still in its first quarter, now is a great time to get your system set up for when you file next time. If you haven’t gotten a smooth system for gathering your financial paperwork, consider using online options like to scan, save, and file these important documents for when you’ll need them.

I’d love to hear from you about how you manage your taxes. What do you do to simplify getting your taxes handled? If you’ve been stressed before, how did you cope? What tips do you want to share with others?

I wanted to make things easier for those making the name transition by giving you an overview of the process.

Get a Matching Set (of Names)

When we got married 5 years ago, it definitely had a huge impact our lives, in more ways than one. When we got back from our honeymoon there was plenty to do. On my list was getting my name legally changed.

According to the IRS if you changed your name (including taking a hyphenated name) and the name on your tax return with your Social Security number doesn’t matched what the Social Security’s office has on file, then you can have problems getting your taxes processed properly.

First thing, first, go ahead and get a few certified copies of your marriage certificate. Whenever you make a name change, make sure you go ahead and get it updated with Social Security Administration.

Fill out the application for a Social Security Card(Form SS-5) and submit it either in person at the local U.S. Social Security office or U.S. Embassy. You must also submit proof of the name change. You can mail it to the office along with the required documentation.

No Time for a Name Change?

In a perfect world, you would get everything done and squared away. However it doesn’t always work that way.

What if you got married, but you haven’t had time to change your name with Social Security or your driver’s license? The deadline for filing your taxes is fast approaching, what do you do?

In that case, go ahead and file your taxes jointly as planned; just make sure to your use your name as listed on your Social Security card currently. Once your tax return is completed and processed by the IRS, you can go ahead update your name later.

Thoughts on Changing Names

Fortunately getting my name changed was a fairly easy task and I received my new card in a couple weeks. How about you? How many of you changed your name in 2012? How quickly did you get your Social Security card updated?

What’s Better – A Tax Credit or Deduction?

First off, many families filing are a bit confused over what exactly tax deduction and credits are. While they can both help you with your tax obligation, there are differences.

Tax deductions lower your income that is eligible to be taxed. This helps you as it may lower your tax bracket. Tax credits, on the other hand, actually reduces your taxes owed, dollar for dollar.

There are two types of credits: non-refundable and refundable. A non-refundable tax credit will decrease your income tax owed and possibly eliminate it. You do not get a refund from it if your credit is more than your income tax owed. With the refundable tax credit, as the name implies, not only can you reduce or eliminate your income taxes, if it totals more than you owe, then you get a tax refund for the difference.

Tax Deductions for Families

If you’re looking at reducing how much of your income is taxed, here are some deductions you may want to check out to see if you qualify for them.

• Exemptions for Dependents: If you have dependent, such as a child, then you can claim an exemption worth $3,800 with your taxes. You must provide a social security number for the dependent.
• IRA Deductions: If you’ve contributed to your traditional IRA in 2012, you may receive a deduction, up to $5,000.
• Charitable contributions: Many of us keep receipts for charitable donations, but did you also include the supplies you purchased to help a non-profit organization?
• Personal property taxes: You may have received a state and local tax bill during the year for your personal property like a recreational vehicle. While it’s a chunk of change out of your budget, the good news is that state and local property taxes related to personal property is tax deductible.

Tax Credit for Families

While there are many tax credits available, the most common that affect families are Earned Income Credit, Child Tax Credit, and Child and Dependent Care Credit. I’ll briefly discuss the benefits of each, so you can get an idea of whether they apply to your family’s situation or not.

• Earned Income Credit: Depending on your income and your family size, you may be able to take advantage of this big tax credit. For example for 2012 taxes, the maximum credit for a family with 3 or more qualifying children is $5,891.
• Child Tax Credit: For parents meeting the income requirements ( currently for couples whose MAGI is under $110,000 or $75,000 for a single parent), this credit can be worth $1,000 for each qualifying child you claim on your taxes.
• Child and Dependent Care Credit: If you paid for child care for your dependents (under 13) while you worked or went to school, you may use this credit to claim up to 35% of expenses up to $3,000 for one qualifying dependent or $6,000 for two or more dependents.
• Adoption Credit: Those households who expanded family through adoption can use the adoption credit worth up to $12,650.

Thoughts on Tax Deductions and Credits for Your Family

By using all of the tax deductions and credits that you’re family is eligible for, you can minimize your tax obligations and perhaps increase your refund. I’d love to hear from you about which tax credits and deductions your family have used.

Here are some ways you can make a difference this year and beyond.

Small Gifts Throughout the Year

Sometimes we feel bad that we can’t give what we want to worthy causes because of our limited budget. If giving a large donation would wreak havoc on your budget, perhaps you can spend the same amount, but over the course of the year. There are many charitable organizations that offer small subscription plans.

While you may not think your contribution is much, most organizations could use that money for many projects throughout the year.

• Camp Sunshine: Camp Sunshine offers children with life threatening illnesses and their families a retreat from the strain and toll that these diseases can cause. Services given at the camp include medical, counseling, accommodation  and meals. The camp also offers families recreational activities.
• Feeding America: With a network of over 200 food banks around the country, this hunger-relief charity maximizes your donations. For every dollar you give, it will go towards getting $8 worth of food to someone in need.

Helping Out With Your Skills

Of course while money is certainly appreciated when it comes to giving, it is not the only thing you can do to help your charity. If you have some skills or even just some time available to share, you can do much good in your community. Not all organizations advertise that they need help (they may lack the resources to get the word out), so feel free to contact a local office to see if there is a need that you can fill.

For example, if you have some basic web design skills, perhaps you can donate your time to update the charity’s website. Or perhaps you can help with administration work that would free up time for the full time members to take care of the day to day operations.

Thoughts on Giving

Besides helping others, you may also get some tax benefits with your charitable donations. How many of you are planning on giving more to charity this year? How do you prefer to give? What organizations are dear to your heart and why?

Before we throw out old documents and clean out the room, we need to know what to keep (and for how long) and what we can shred, especially when it comes to our tax records.

Tax Records

How Long Should We Keep Tax Records?

I decided to check the IRS guidelines first.  The gist of their guidelines is that you only need to store records for as long as the period of limitations applies. For example, that means that if there is still time for you to amend one of your tax filings, you should keep the records for that tax year.  The period of limitations is the period of time in which you can amend your tax return to claim a tax credit or tax refund or that the IRS can assess additional tax.

The IRS also has different timetables, depending on your circumstances as follows:

Period of Limitations

I should also note that even though you may not need to keep these records for tax purposes, please check to see if you need them for some other financial or legal reason.

How to Store Tax Records

As I reviewed the IRS guidelines, I noticed that they did not specify a particular method on how to store your records. That means that if you prefer, you can keep an electronic back up of your tax records. You can also keep them in the traditional paper form as well, it’s up to you.

If you’re trying to explore some options for digital storage here are a few you may want to check out:

• Scan/Save: The easiest way to save and store that data is to go ahead scan and save the copies. You can put it on an external hard drive where you can store in a secure place.
• DropBox: They specialize with digital storage and have several plans available including free, professional, and team accounts.
• Amazon CloudDrive: Amazon also has a digital storage service that is free for the first 5 GBs.

Of course, you have to weigh which options would be best for you and your organizational needs. Since much of these records have sensitive financial information, please make sure whatever you choose is secure.

Thoughts on Storing Tax Records

For us that means we’ll be spending a weekend getting our financial records stored in a secure spot while shredding all of our old stuff from college. Hopefully it’ll only be a weekend project and we’ll have more space available to rearrange everything in our office next month.

I’d love to hear from you about how your filing system is done at home? How long do you keep your records (tax related and not)? Do you have electronic filing as a part pf your system? Why or why not?

If you are a parent, having a little one (or not so little one), can give you some big tax benefits. You may already know that for 2011 you can deduct $3,700 for each dependent as an exemption on your tax return.

However there are a couple more tax credits that all parents should review to save more on your taxes.

Dependents

Child Tax Credit – $1,000

The Child Tax Credit can be a significant help with reducing your federal taxes. Depending on your income you can claim up to $1,000 per qualifying child.

What defines a qualifying child? There are a few criteria that have to be met:

• Relationship: To claim this credit, biological children, adopted children, step-children, and foster children qualify. Other family members may also qualify.
• Age: Your child(ren) has to be age 16 or younger at the end of 2011.
• Support: Your child must not have provided over half of their own support.
• Residence:  Your child must have lived with you over half of the year.
• Dependent: You have to claim your child as a dependent on your federal taxes.
• Citizenship: Qualifying children include U.S. citizen, U.S. national, and U.S. resident alien.

If you’re using tax software like TurboTax then these factors will be checked as you file your taxes to make sure you get the credit if you qualify.

But the Child Tax Credit isn’t the only tax break you should look at. The Child and Dependent Care Tax Credit can also be a big win for you.

The Child and Dependent Care Tax Credit

If you paid for child care last year, then you may qualify for a tax credit based on your dependent care expenses up to $3,000 for one dependent and up to $6,000 if you are claiming two or more.

To qualify you must also identify the person who provided the care for your child. You and your spouse if filing jointly must have earned income. The child care expenses paid should not be given to your spouse or someone claimed as a dependent on your taxes.

Thoughts on Children and Tax Credits and Breaks

For parents looking at getting their taxes filed, have you looked at the Child Tax Credit and Dependent Care Credit? How much do you qualify for? What credits are you claiming this year?

Tax Deadline

Besides procrastination, some are delaying getting their taxes completed because they are worried about getting them done correctly. Fortunately there are ways to help with both.

Tips on Getting Your Taxes Done

If you’re worried that you won’t get your taxes done on time, here are a few tricks you can use to get it completed and off your already full plate.

• Create Your Own Deadline: October 15th is the official tax deadline, but you can do yourself a big favor and pick an earlier date to be your deadline. Mark it on your calender (offline or online) and make sure it’s listed as a big event. You don’t want to miss the date. Just think of it this way – the sooner it’s over, the sooner you can relax.
• Break It Down: Do you feel overwhelmed at the amount of work ahead of you? Break it down into little pieces of work. Get your W-2s in one day, take care of your 1099s the next, and so forth. When we were doing our taxesthis year, I simply entered the information bit by bit into TurboTax online as it came in. No stress, no mess.
• Enlist an Accountability Buddy: If you need a bit of a push, ask a friend or relative to keep tabs on you until you filed your taxes.

Try out any one of these tips starting today and add another if you need a bigger boost.  Don’t avoid filing your taxes even if you didn’t properly file an extension.  You may be missing out on a nice tax refund.

Thoughts on Tax Extensions

Please remember that the tax extension is an extension of time to file and not an extension to pay. If you owe money and you don’t have the total amount, please go online to the IRS.gov or call them (800-829-1040) to request a Online Payment Agreement and get on a payment plan. If you have any questions, please leave it in the comments below.

I’d love to hear from you about how you’re doing this year. How many of you had filed an extension for your taxes? How many of you still need to file before the deadline? What is the biggest barrier for you?

Becoming parents for the first time last year has been the biggest change in our lives. As other parents will tell you, it’s a joy and a responsibility to raise a little one. One of the first decisions we made when confirming the big news was starting a baby fund for our little one and our family.

Even before our little girl arrived, we had a baby fund ready.

Why Start a Baby Fund?

Some may wonder if we had any savings before we became parents; we did. Up until that point we were comfortable with the few months of expenses being covered by our emergency fund. When we found out we were expecting, though, we felt the need to increase the safety net.

For one thing, I’m self-employed which means any time I take off for maternity leave would basically mean no income from my business. Though we expected some monthly expenses to decrease (less eating out for example), we also assumed that we would need a buffer to help us as we get adjusted to being parents.

How Much Do You Need In Your Baby Fund

The next step to creating a baby fund is to figure out how much you want to save up. Of course, your needs depend on your specific family’s circumstances. However, here are some baby related expenses to consider when calculating the amount that is right for you:

•  Doctor Visits/Delivery Costs: Our visits to the obstetrician’s office was thankfully manageable. We talked to our family and friends who had babies recently to get a ballpark figure of what to expect for delivery costs.

We also checked with Human Resources with my husband’s  company to know what would be covered and what wouldn’t be. The total costs (for the prenatal visits and delivery at the hospital) came out to about $2,500.

• Diapers: Your preferences with diapers (disposable or cloth) can have a big impact on your expenses. Cloth diapers are more upfront, but it’s pretty much a one time cost. Baby Cheapskate and other sites like it can help you snag a great deal on cloth diaper sets, further lowering your costs.

Disposable diapers can be expensive in the long run. One tip I’d offer if you decide to go disposable is to use subscription services like Amazon Mom to have your diapers sent over to you and you can save around 30%. Our diaper costs have been around $20/month (not counting wipes – which can be found at stores like Costco for a great deal).

• Food: Whether you breastfeed or formula feed, food is an expense likely to increase when you have a little one (though it doesn’t have to be by much). For many parents the money they save from not eating out as often evens out the higher food costs. If you buy formula, use sites like the ones I mentioned in the diaper section to get bulk deals. It can amount to significant savings.

• Baby Gear: We had some money set aside for any items that we’d need that we didn’t get at the baby showers. Each little one is different so don’t be in a hurry to fill out all the gaps until your little one has arrived. You may be surprised at how little you’ll need. The money saved can be used for other baby expenses or you can put it into a college fund.

• Childcare: For many families, this is the biggest expense if both parents work. Use the time before the baby arrives to compare which options are best for your family’s circumstances and goals. Daycare varies greatly throughout the country, so please get local estimates.

How to Save for the Baby

For the two of  us, automated  transfers and savings were the main strategy. Whenever we got a windfall such as a tax refund or bonus from work, having an automated deposit or transfer has helped us stay on course. We also looked at ways to cut back on expenses on our monthly budget and transferred the money into savings.

Thoughts on Building a Baby Fund

Whether or not you start a baby fund as something separate from your other savings is up to you. The thing to focus on is having a safety net to help you make the transition into parenthood. If you’re looking for more information about baby expenses, please visit Couple Money where we and other parents have been sharing their own stories, tips, and advice on what works, what doesn’t, and what’s not worth stressing over.

Tax Tips for Newlyweds

Have a Financial Game Plan Ready

Before you two start tinkering on your finances, having an overall plan for your money and your goals can be incredibly helpful and empowering.

• Do you want to eventually own a house?
• Do either one of you want to start a business?
• Do you want to have children?
• What are your goals for work and retirement?

Get Your Withholding Squared Away

Once you’re married, you may want to update your withholdings. If you’re an employee, you should check out changing your W-4 with Human Resources. Going back to your goals that you’ve discussed, you may want to adjust your withholdings so you get more per paycheck throughout the year.

Perhaps you two may want to get a big tax refund so you can use that lump sum for a big financial goal. Each has its pros and cons, so the two of you have to decide what is the best match for you.

If you do expect a refund or you’re getting a slight increase in your paychecks after the adjustments, here are some suggestions on how you two can use the money:

• Build savings. Having a financial cushion in case of emergencies, a house down payment, or for starting a business can be a smart move.
• Pay down or knock out debt. Starting off your marriage with less debt can be a great financial win. Even if you can’t completely pay off the debt, paying down a bit can save you on interest charges.
• Boost your IRA. If you haven’t created one already, you can use the money to boost your retirement accounts.

Make Taxes Easier Next Year

Even though it’s a bit before you have to file your income taxes, it doesn’t hurt to get prepared now. It’ll make it easier for the two you and it could speed up process (and a refund) if done now.

When you file your taxes your name should match what the Social Security Administration has on record. If they don’t match, you’ll have problems with getting your taxes processed.

Just fill out a Form SS-5 (the application for a Social Security Card) and submit it either in person at the local U.S. Social Security office or U.S. Embassy. You must also submit proof of the name change, so have a certified copy of your marriage license. You can also mail it to the office along with the required documentation.

With just a little effort now you two can make filing taxes less stressful.

Thoughts on Taxes and Marriage

How many of you recently married? How are you two merging your finances? How’s the process going for you?

Saving Money

Saving Money Around the House

Saving money starts at home. There are ways you can lower your monthly living expenses.

• Refinance your mortgage. For most people their mortgage payments are the biggest expense. Check to see if you can refinance your home mortgage to a lower rate. Right now, you may be able to get your home mortgage rate in the 3% range.
• Optimize your electricity. With summer weather already here in some parts of the country, running the air conditioner from now until the fall will eat up your utilities’ budget. Try to cut back on your electric bill.
• Cook (and grill) more. Summertime is perfect for cookouts. Eating with family and friends at home from your grill can be a great way to have a fun time without breaking the bank. Burgers, kabobs, and grilled chicken are easy meals to make and taste fantastic off the grill.
• Have a home garden. You can boost your meals with some fresh items from your little garden. It doesn’t have to complicated – one year we just had herbs and some peppers.
• Review your cable bundle. Check and call your current provider to see if they have any promotion specials you can take advantage of. We recently did this with our internet and cut our annual expenses by $200 while increasing the speed!
• Shop around for cell phones. If you’re looking for the best value with cell phones with some flexibility, check out prepaid providers like Boost Mobile or Go. You can get some pretty good deals on plans and get the same coverage from the major providers.

Keeping Transportation Costs Low

The next biggest expense for couples are their cars – car loans, maintenance costs, and gasoline expenses can all add to a sizable chunk. Taking a few steps can help the two of you shrink your expenses.

• Skip on the car loan. If you’re thinking about shopping for your next vehicle, consider saving before getting a car loan or lease. We manage to save cash for our last few cars and recently found a deal on our family’s Accord. While you’re shopping for your next car, look at gas mileage and weigh it against the price. You can come out ahead both with the upfront purchase price and with the long term ownership costs.
• Improve your gas mileage. You don’t have much say about the price at the gas pumps, but you can lower your fuel costs significantly by increasing your car’s gas mileage.
• Shop around for car insurance. Ever so often we get quotes on our car insurance to make sure we’re getting the best value. Even if you’re happy with your company, it pays to double check and make sure you’re getting discounts you’re entitled to. Being Costco members helped us to decrease our insurance premiums significantly.

Your Money Tips

How about you? What goals do the two of you have for this year and beyond? How are you saving money?

Allowance

Allowance for Chores

One big benefit of having commission for chores is that it can help kids realize the connection between work and a paycheck – you have to earn it. Some financial gurus like Dave Ramsey prefer having kids work for their money as it can also help them appreciate the value of it. For some children, there is something special about money that one had to work for versus money just given.

With involved parents, it can be a great teaching opportunity for little ones as they take on more and more responsibilities and find ways to earn more.

The drawback for giving an allowance for chores is that your child could expect to be paid for every assignment they have. The tough part would be working a system where certain chores are to be completed without pay as a part of family responsibilities.

Weekly Allowance

With a regular allowance, kids can start a basic budget. They get paid on a set day and the money has to last until the next allowance day. Instead of just demanding money from their parents whenever they want it, having a scheduled allowance can give children a sense of responsibility. They can also set up goals for buying things that they might want, helping them learn the habit of saving.

For some parents, they start off with a set amount and add bonuses to certain chores. Others tie allowance to their kids’ age and increase as their children gain more responsibility.

The drawback for the scheduled allowance not tied to chores is the expectation of money without having to do anything. Parents would need some ground rules on what is expected for the child to get his or her allowance.

Thoughts on Kids and Allowances

Raising financially savvy kids takes patience and effort. Just because parents have a plan doesn’t mean things will work out that way. It’s about adjusting the allowance until all of you find a balance that works. What will we do? We’re not sure yet, but we’ll be keeping our eyes open for opportunities to teach her about money.

I’d love to hear from you about your family. How many of you have allowances for your children? How is it handled – do you tie it to chores or do you have another system? How do you determine what is a fair amount for allowances?

Travel Deals

Now that we have a little one, we’re looking forward to enjoying some family vacations of our own. How about you? Are you looking for some vacation ideas for this summer?

Road Trip or Flying Over

Depending on where you currently live, you have different options on how to get to your selected destination. While it certainly matters how much time you have for the break, I prefer taking a road trip if possible. Besides saving money on the flight, it’s also a wonderful way to learn the areas around your destinations, including some hole in the wall spots that you may otherwise miss with a flight.

Best Cities for Family Vacations

If you’re looking at taking your family on a summer vacation without breaking the bank,  here are cities that you may want to check out.

Atlanta, GA

If you want to check a metropolitan city without paying exorbitant prices, then Atlanta can be a great deal. Besides having beautiful downtown destinations like the Georgia Aquarium or the Cola Cola Factory Tour, you can also relax over at Stone Mountain Park and have a family picnic.

Savannah, GA

Lovely Savannah has some great scenery as downtown is home to some beautiful parks and the Savannah College of Art and Design. You can also enjoy riding a riverboat, hanging out at the beach, or appreciate some one of a kind art at a gallery.

Asheville, NC

What better way to escape the sweltering heat than a visit to the mountains? You can take the family on a camping trip, go horseback riding, and enjoy the great outdoors. If you’re more comfortable in a hotel, there are some bed and breakfasts around that have some of the most fantastic mountain views.

Memphis, TN

If you’re looking at incorporating some music into your family vacation, then Memphis, TN is the perfect spot. Stroll down Beale Street and see musical talents from all genres. You can also enjoy some of the best barbecue in the country as well. It’s a win-win!

Washington, D.C

History buffs and museum aficionados can appreciate what Washington D.C. has to offer up. With many destinations a short walk away from each other, you can keep the family busy and fit with a vacation to our nations’ capital.

Biggest Bang for Your Buck

If you’re looking to maximize your trip and cut back on travel costs, then using online travel sites can be perfect for you. Using the bidding feature on some travel sites can help you decrease costs by 30% or more. For us, it means planning ahead with bidding and starting low, slowly working our way up until the bid is accepted.

The downside of bidding is that you don’t know what hotel you’re going to get until the bid is accepted, however there are ways to make sure you’re getting a good hotel. We’re very specific about the type of hotel we want (at least 3 1/2 stars) and the part of the city we’re looking for. We’ve been on several vacations and have gotten some great deals using travel sites like Priceline.

Thoughts on Summer Vacations

What are your plans for your summer vacation this year? What have been some of your favorite destination spots in the past and why?

Starting a Business

From working with him and taking on some side projects, I was able to get an income stream that allowed me to work for myself. I then started building my business and I love it. If you want to start your own business, here are some tips to make it easier for you.

Have a Well Thought Out Plan

No doubt you’ve seen people mentioning having a business plan written out with an analysis of competition, target market, projected financials, and so forth. Depending on the kind of business you want to start, you may not need this. However, with any business you do need to sit down and figure out:

• What do customers/clients need? What problem is your business solving? Even if you have the interest and the skills for the business, you have to have a market to make it profitable.
• How is my business the best solution to their problem? You have to clearly define your unique selling proposition.
• What is a reasonable goal for revenue from this business? You may have an idea or service that can be incredibly helpful to others, but can you make a profit from it? No one can predict the future, but most people can get an idea of what to reasonably expect with certain inputs and by comparing competitors.

Use Free Resources to Start and Build Your Business

I also highly recommend using resources such as SCORE and the Small Business Administration to help you get your business off the ground and on the right foot. There are plenty of free workshops available online and offline that can assist you in advertising strategies, incorporating your business properly, and handling your business finances.

The real benefit of using resources like SCORE is that you get professional advice from people who have been in your shoes or who have extensive experience with running a business. You don’t need to master everything to start a business; you just need a network of people who can assist you in building it. Taking advantage of these free resources can help you reduce mistakes that can cost the business money or worse.

File Your Taxes Properly

Of course, with any business you need to be on top of your tax obligations. The IRS makes it easy for you to acquire your Employer Identification Number (EIN) by applying online. You can also take care of your estimated taxes online through  Electronic Federal Tax Payment System. If you want to enroll, here’s what you need to know.

For filing taxes, I personally use TurboTax and I review everything once it’s complete. Each business is different, so you have to decide for yourself what option is best for your tax needs.

Thoughts on Starting a Business

How many of you are thinking about starting a business? What is your biggest concern before jumping in? For those who have started your own business, could you please share what has helped you to succeed?