11 Great Financial Tips for Homemakers

These tips were provided by my wife, Laura Irwin, who gleaned them from many years of homemaking and learning from others. Homemakers face a myriad of challenges; not the least of them is managing family finances on only one income. This is just a short list of issues. Self education regarding family finances is crucial for homemakers because of reduced income, lack of retirement accounts, increased need for self-discipline (possibly more time to shop), and the fact that if the finances become an issue, homemakers may have to return to work. We wish you the best and hope that these tips are helpful.

1. Accountability - You must plan finances together with your spouse. This way, no one gets to play the 'blame game' when things go wrong. When both spouses work on finances on a weekly basis, overspending by either spouse will become apparent. You will also get the chance to congratulate each other on your successes. You are in this together. We all know that money is a huge cause for stress in relationships, and working together will help prevent years of financial stress. This may also help you both learn self-discipline and how to live on less. Accountability helps you not be that guy in the commercial where he says, "How did I do it? I am in debt up to my eyeballs!"

2. Keep depositing money in your IRA - Even though you may not be earning an income. Women are poorer in retirement than men are because they earn less, live longer, take time out for child rearing without contributing to retirement accounts, and receive less in Social Security benefits because of the time-out for child rearing. This is statistically even more important for women in minority groups.

3. Budgeting, Debt Reduction and Saving - Proper budgeting and debt reduction will help you meet your goals of being able to live on one income. Some women are naturals at budgeting, but if you are not one of them, a budget is simply a spending plan that helps you keep track of regular monthly expenses and savings for planned purchases and the future. If you have never created a budget, you may consider using software, an Excel spreadsheet, or simply paper and pencil. You will be spending a lot of time with it, so use whatever makes you comfortable. Put your debt reduction plan into your budget. For great information on reducing your debt, see www.debtproofliving.com.

4. Fifty Dollar Limit - Or any amount you both decide on together. This tip has saved us many unnecessary purchases because spouses must communicate about a purchase before spending over the limit. (This does not apply to the weekly bills like grocery or utilities.) At times, this rule may seem too restrictive, but we have found it to be a huge budget saver. It also helps to get a second opinion. Recently, my wife called me from the check out line about purchasing an item, and I was able to remind her that we already own one! Judge the long-term benefit of purchases. Our children are teenagers, so we have had a chance to learn from our mistakes and wish we had done some things differently. One of our regrets is overspending on toys, and watching the toys be neglected, eventually ending up in a garage sale. Since we have begun paying for our oldest child's college tuition, it is painful to think of how much money we could have put into a college savings account had we not purchased those toys. Other examples of this include purchasing children's furniture, which will have to be replaced as the child grows. An inexpensive bed rail can make an adult-sized bed usable from toddler age to adulthood.

5. Understand marital financial mindsets - What happens when opposites attract? They get married, then begin to fight about money! Consider the following ways people view their finances: There are optimists, pessimists, spenders, savers, planners, procrastinators, and any combination of these. Perhaps his parents were well off financially and she was raised in poverty. On the other hand, perhaps her parents taught her sound financial principles and his parents kept their finances a secret, or worse, he has copied their example of bad financial habits. Open and honest communication about both of your mindsets may help you work through any pre-conceived views or bad financial habits. Remember that this must be done without finger pointing and with the goal of financial harmony. Perhaps reading a good book together about marriage and money would be helpful.

6. Houses and Cars - These are the biggest expenses for most marriage partners. Ideally, if you can plan to have your mortgage paid off before your first child goes to college, you will feel less stressed about paying tuition. Another great way to save money is to buy great low-maintenance cars and drive them for a long time. There is no freedom like driving a car that is 'paid for'. Many experts recommend that you put the amount of your payment into savings after you have paid the car off to save for the next one. From personal experience, we also recommend planning for what kind of car you will need several years from now. In other words, do not buy a two-seater if you plan on having children in two years. Hold off saving for the family vehicle. Also, do not sell the minivan after middle school because the kids are not in sports anymore. You may need it to haul your child's belongings to college.

7. Get Organized - Buy a file cabinet for financial and other important papers. This central location will allow you both to understand where anything important belongs. You can avoid many financial mistakes by keeping papers and bills well organized.

8. Understand your Health Insurance - Health insurance costs have risen for everyone. If you have employer-provided health insurance, take the extra time to understand your coverage, especially during enrollment time. Understanding your coverage may help you save a lot of money. Figure out which policy is best for your family. For instance, if you have a high monthly prescription expense you may research which plan pays the most for prescriptions. If your medical and/or dental expenses are very high, you may be able to deduct them (7.5) of your adjusted gross income. Keep track of your mileage to doctor appointments (20 cents per mile). See your tax advisor regarding your specific situation and see irs.gov Publication 502.

9. Set long and short-term goals together - Creating goals together is a wonderful marital exercise. You will learn what each partner finds most important both now and in the future. It is amazing how current wants can be dismissed when they are compared with a written plan.

10. Determine areas of overspending - Each month as you both check your budgeting progress, watch for recurring overspending in any categories. You will probably find one or two areas that go over each month. If you are within your overall budget, you may want to raise your budget amount in those areas or find ways to lower your spending. Many busy families find that eating out regularly exceeds their budgeted amount. This one requires extra self-discipline to plan ahead and create freezer meals that you can fix in a matter of minutes. Tired moms will hate this suggestion at first, but it really can save hundreds of dollars.

11. Do not let grocery shopping be a budget buster - A penny saved really is a penny earned when it comes to grocery shopping. For decades, women have come up with creative ways to save on groceries. I remember my mother saying that any money she saved from groceries went toward birthday and Christmas gifts. Somehow, through hard work she was able to feed three growing boys and still have money left over! My wife's family preserved produce from their large garden and from local fruit growers. Others use coupons, shop for sales at multiple stores, or plan meals around sale items. All of these ways are wonderful - do whatever works for you. My wife recently read a huge stack of books from the library about saving money and discovered one recurring theme about grocery shopping. Most books recommended keeping a book of regular prices for each item you usually purchase. That way you can see if it is really a great sale price, or if they simply put it in the grocery flyer at the regular price. If that sounds like a lot of work to you, visit www.Thegrocerygame.com. After entering your zip code and your local grocery store, you will be able to access a computerized list of best deals at your store that week. After only three weeks, we have saved about $200, and we have begun a stockpile of groceries in the pantry.