Kicking off the the money topic talking about savings but don’t worry this isn’t a post about skipping Starbucks, buying off brand or other habit changing ways to save money. This is the basic stuff that – hopefully – you already know about.
I’ll write more about our relationship with money later but a short summary is that Danny and I have different experience with and ideas about money. Prior to Lucas being born I was in charge of finances and we were living on 2/3 of our income without much effort. Once we started daycare our cushy financial situation started to look depressing and we decided that Danny would handle the budget and I would focus on making more money in order to grow the pie instead of eating less. Clearly we both failed. After a lot of ups and downs this became painstakingly obvious last month – hence all the budget stuff on the blog.
As I’ve taken a deep dive into our finances here are the first few lessons that stand out:
Keep an eye on subscriptions
Subscriptions are fun and convenient but they can also be an easy way to lose track of funds and overpay. Here are a few things to keep a look out for when monitoring your accounts.
- Accidentally signing up for a subscription: Danny loves Halloween and wanted to start a haunted house collection last year. He found a nice Victorian Halloween series and ordered one – every month as it turns out. We received a house in September, October, November AND December even though he’s repeatedly asked them to cancel and sends back houses. Thankfully it all appears it’s finally over and we received our money back!
- Double billing and multiple accounts: Last year (2017 actually) Danny bought me what he thought was three months of Book of the Month Club. What he actually did was set up his own account and was being billed every month for books while I had my own account and was also being billed… Let me say my love for BOTM is not unfounded because they backdated all the charges and fixed the accounts with no problem. Netflix hasn’t been so great at reimbursing us after we discovered they have been charging us twice a month. Resolving this issue and the one above got us $300 in refunds!
- Underestimating actual costs: When something regularly shows up at your doorstep when you need it, you don’t think too much about it. I decided to go with Honest diapers before Lucas was born and honestly I love them. However, I’ve come to realize that it is probably a luxury item we can’t afford. I genuinely thought we were getting boxes quarterly but after taking a closer look, we actually get them about every six weeks and that puts our diaper costs way higher than I thought. In this case, I am going to start buying off brand but in general my advice is to simply pay close attention to how regularly you’re paying for something.
Default savings
I’m not great with the eBates and other coupon programs (at least not yet) but there are three ways I do save money without much effort:
- Chase: If I can pay with my credit card I do it. We always pay our bill in full each month so we never lose money to interest. We get a percentage of our spending back in reward points that we redeem as cash towards our bill and every 3 months Chase gives extra rewards for certain kinds of spending. I don’t pay attention to what those savings are because it doesn’t impact what I buy but I do click the activate button so that if I am spending in those areas I get the extra cash when I redeem my points. With our Chase card we get a few hundred dollars back a year.
- Kroger Plus Card: We’ve been using Kroger’s ‘loyalty card’ for years for standard savings but I only recently learned that if you go online you can select coupons and add them to your card. They customize the selection to what I’m already buying and the coupons last for a several weeks so I don’t have to have my shopping list planned out and then go search for coupons, I click my go-to items every week or so and when I shop I don’t have to remember to use the coupons or an app when I check out – just my card (aka phone number) and I already do that! We saved $12 from a $107 bill on our last trip.
- Target Card: Who doesn’t love a good Target trip? The store card gives 5% off which basically covers taxes and the app offers other coupons. Since lines at Target these days can be rough I pull up the app while I’m waiting and scan what’s in my cart to see if there’s a coupon. It kills time and saves a few bucks every now and then. I saved $7.90 on our last trip when the bill was $88, just over $4 was the 5%.
Use a credit union
Our credit union gave us over $600 in dividends to start the year and it’s not because we have cash in the bank. They count our debt (aka our mortgage) as an asset and we get paid on our entire financial record. We have an account for Lucas and he gets $50 every year too. I love using a credit union and highly recommend checking them out if you aren’t using one.
If you use daycare open a Dependent Care FSA
The Dependent Care FSA is an easy way to ease daycare costs. With the FSA you can deduct up to $5,000 per child from your annual taxable income (combined so only one parent can do it). How it works:
- Your employer deducts $5,000 from your paycheck at a prorated 12 month amount
- You turn in receipts from your daycare provider to HR
- You are then paid whatever amount is available in your FSA based on the receipt.
If you do the $5,000 amount and get 26 checks a year, about $192 will be deducted per pay period but you’ll save (via no taxes) $1,500 over the course of the year. It’s hard to sugar coat daycare costs, but this does help.
CarrieDaway 