Cozi Blog

Five Painless Ways to Cut Your Budget

Give yourself a personal-finance makeover with this easy-to-follow plan.

From nervous penny-pinching to cathartic impulse spending, the decisions we make at the cash register are based more on our emotional state than on the state of our finances. Here, a five-step plan to organize your finances and help you make rational choices.

Follow the bucks. Getting a handle on your household spending habits starts with figuring out where your dough goes. Free online budgeting tools such as Mint.com and QuickenOnline.com give you an instant three-month snapshot of your household cash flow when you export your bank and credit-card transactions from the past 90 days.

Identify your biggest budget-busters. Don’t get mired in tracking the details of every dime you spend. Instead, sweat the big stuff, by honing in on the priciest three to seven spending categories. Those tend to be food, transportation, housing, entertainment-related costs and infrequent but large expenditures, such as insurance premiums, medical care and taxes.

Set your new spending limits. Now that you know how much goes out every month, it's time to rein your expenses in. Set new spending targets for three to seven of the major categories you’ve identified. Base your cuts on either a dollar amount you’d like to save each month or on a percentage (for example, 15% less than what you typically shell out in a month). Divide those monthly numbers by four to set your weekly spending limits for each category of expenditure.

Give yourself an allowance. A simple, but highly effective, cost-cutting tactic is to physically limit your splurging power: Label individual envelopes with everyday spending categories (for example, “coffee/lunch/snack money”) and stuff them with a week’s worth of cash. The amount you put in each envelope represents your new spending limit. (You can also do this on a daily basis if you don’t want to carry too much money at one time.) Leave the credit (and debit!) cards at home, or at least promise yourself that you will use them only for actual emergencies. Why does this work? The visual reminder of the actual cash you have left to spend is a powerful one, requiring you to assess the damage you're going to do before you get to the checkout counter.

This trick works wonders. Consider how much you could save on food alone: The average American family spends 12.3% of its money on food-both at home and in restaurants-according to the Bureau of Labor Statistics’ Consumer Expenditure Survey. Cut back by 15%, and you’ll save more than $900 in savings in one year.

Set a date to do some savings homework. Mark your calendar with a formal “Save Money” date. Use this time to research ways to cut your car and homeowner's insurance premiums and to review your health coverage for ways to save (such as filling your prescriptions by mail.) Also, spend a few minutes of that time to get your tax refund right now by cutting off the free loan you're giving Uncle Sam. (Last year the average tax refund was around $2,300.) If you got a refund last year, use the IRS.gov withholding calculator to see if you should increase the number of exemptions you claim.

Cutting your budget to save more money for college? Cozi is offering the chance to win $529 for your child's college savings plan!

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MakingLifeBetter provides tips and smart strategies to help you feel good, look good, and get more out of life.

Win $529 For Your Child's College Savings Plan

As soon as your kids are born, you start loving them and worrying about them. The love and the worry are instantaneous and go hand in hand. You want them to be healthy, happy, and successful in whatever they do in life. You want to be able to support their dreams and help them soar. But as most parents soon learn, helping kids soar can be expensive, and you might worry that you won’t have the resources to help your child achieve his dreams in life.

The best thing you can do for your kids is to turn all this love and worry into an action plan. If you start planning early, you’ll have a much better chance of being prepared when the time comes. This is especially true with supporting your child’s education.

If you start a 529 savings plan for your child when he’s young, and add even a modest amount each month, you’re setting him up for success from the start. You’re laying a foundation that will help him soar in life.

Cozi has teamed up with T. Rowe Price to help make this family moment come true. We’re offering the chance to win $529 to jump start a plan for your kids (or add to one you’ve already started). All you have to do is use Cozi anytime between November 1st and December 31st, and you’ll automatically be entered to win. Sound simple? That’s what Cozi is all about!

Learn more about the 529 College Savings Plan by visiting Price529.com.

Create A Bill Paying System

Do you misplace bills or miss payment due dates? Do you have a stack of paid bills but aren’t sure what to do with them? A bill paying system gives you a way to find, pay and file your bills simply and quickly.

Unpaid bills need a home so they are easy to find when it’s time to pay them.

Personally, I like to keep an action file that is organized by the category of action such as “to pay,” “to read,” and “to follow-up.” I like the action file because I like doing similar activities together.

Some people like the tickler file system that is based on forty-three files (1-31 for each day in the current month plus one file for each month). Bills and anything else that need to be processed on a particular date are filed under the appropriate day. Items for future months are filed under the appropriate month. Some people like how the tickler file creates a daily agenda.

Regardless of how unpaid bills are filed, allow sufficient processing time.

Payments need to be mailed seven to ten days prior to the due date to avoid late charges. Allow three to four days for processing when making online payments. Record the date to pay bills in your calendar, and use this date to file the bills if you are using the tickler file. I like to limit my bill paying to a couple of days during the month because the routine provides me with a certain amount of financial predictability.  The dates chosen for the bill paying routine allow sufficient time for the payments to be received and processed.

Schedule bill paying in your planner.

Bill paying is a rather mundane task and it’s easy to put it off or forget about it. Scheduling provides the time to get it done and a certain amount of importance.

The last step of the process is filing the paid bills.

File the bills as soon as you are finished so you avoid making two tasks out of one. Using a month system to file paid bills is fast and easy. Bills paid in September are filed in September. In a year, just take out the old bills and shred them before filing the new bills. However, if your bills are tax-deductable you will need to file them with all of your tax-deductions for the year and keep them for seven years after filing taxes– or for the length of time your tax preparer recommends.

Organized bill paying involves providing a home for the paid and unpaid bills plus scheduling the bill paying. Once organized, you may find you never pay a late fee again. It’s like money in the bank!

Get your family organized and on the same page with Cozi, the free online family organizer.

Clear Spaces owner Denise Lee merges seven years of social service experience and seventeen years experience in Information Technology to bring you effective and personal organizing solutions for the home, the small business and the student. The Clear Spaces approach is holistic -- empowering you to live the life you want to live.

5 Ways to Save at the Supermarket

Motley Fool personal finance expert Dayana Yochim offers no-fuss strategies for reducing your grocery tab.

Want to save money in every single aisle at the grocery store? No sweat. Seriously! These five low-effort supermarket-savings strategies do not require complex cost-benefit calculations, time-consuming research or pre-shopping preparation.

1. Cheat off your grocer’s math homework. Is the bigger box of cereal actually cheaper than two smaller boxes? Put down that calculator and get the answer right off the sticker posted on the shelf — the per-unit price “cheat sheet.” This savings shortcut helps you instantly compare different sizes and brands of everything you toss into your cart. It’ like cheating off the smart kid in math class, only there’s no risk of detention.

2. Stick to your shopping syllabus. There’ a reason the proverbial “they” say never shop when hungry or without a grocery list: These timeworn nuggets actually work. An estimated 40% to 70% of supermarket purchases are unplanned (a.k.a. “impulse buys”). You can save some serious cash by composing a grocery list and sticking to it (the latter is a critical part of the equation). If you have standard meals in rotation, type out all the staples you need and make a stack of copies to keep in your pantry. Before each trip to the store simply checkmark the items you actually need. And no, adding things to the list as you toss them into the cart doesn’t count.

3. Become BFFs with your grocer. Most people don't need any more plastic in their wallet. The one exception is a card that helps you save money, not spend it: your supermarket’s loyalty program (sometimes called a shopper’s club card). Enrollment is usually free, and the rewards for card-carrying customers are instant. Soon your grocer may even get to know you better than you know yourself and provide tailor-made coupons (printed on your receipt or mailed to your home) based on your shopping patterns.

4. Stop binge buying. Yes, we’re back to harping about making a shopping list. Here's yet another reason to never leave home without one: The average household tosses 14% of its groceries down the disposal every month — that’s nearly $600 annually going to waste because of bad planning and overbuying. Toss fewer greens in the trash and keep more green in your wallet by making a list of what (and how much) you need before you’re at the store.

5. Pay with paper, not plastic. Give your credit cards a rest and start stocking your wallet with cash before you shop. Research show that people spend as much as 18% more when the transaction doesn’t involve cash. Using cash forces you to be more mindful of what you buy, plus it limits your spending to the amount of money you have in your wallet. Voilà! Instant budget!

About the author: Dayana Yochim is the consumer finance expert at the Motley Fool (fool.com) and the author of, The Motley Fool’s Guide to Couples & Cash: How to Handle Money with Your Honey and co-author of The Motley Fool Personal Finance Workbook.

provides tips and smart strategies to help you feel good, look good, and get more out of life.

A Hide and Seek Party on a Shoestring Budget

If you’re looking for a fun, inexpensive party idea for your two- to three-year-old child, you can take the simple game of Hide & Seek and build a complete party theme around it. This theme is loads of fun but also low-key. Parties can be so simple for kids this age. Take a look at these fun Hide & Seek ideas:

• Play Hide & Seek—the classic game, of course.

• If adults are attending the party, reverse it—have the kids look for their parents.

• Provide toddler-sized boxes that are either pre-decorated by you or that the toddlers decorate themselves. What a great craft activity! Have them use markers, crayons, and other decorations to make their own Jack-in-the-Box. (This can also be the take-home party favor!)

• Play Jack-in-the-Box. Have the kids climb into a box and duck down so as not to be seen. Play music, and let the kids pop up just as Jack would do.

• Hide a piñata that the kids must find in order to enjoy the fun.

• Organize a treasure hunt for chocolate gold coins.

• Make a mock tent using a large cardboard box and a sheet. Let each child hide in the tent and pop out, surprising the others. You can ask them to pop out using their imagination and become a lion, a dog, a cat, etc.

• Give them boxes of Cracker Jacks for the simple excitement of finding the prizes.

• Hide candy treats in a batch of cupcakes. The kids will discover the surprise as they enjoy their cakes.

• Play I Spy.

• Read books that have flaps to reveal hidden pictures.

• Have the kids make creations using play dough. Hide some small prizes in each little play dough jar for the kids to discover.

There will be plenty of surprises and prizes for the kids to find and take home at this party. This is low-cost, high-fun party for toddlers. It’s amazing how a classic game can give a party full of kids a great afternoon.

--Lisa Kothari, Peppers and Pollywogs

Saving for College

Saving money for college might be the last thing on your to-do list during these tough economic times. But, did you know that for the 10-years ended 2008, college costs rose more than twice as fast as general costs?  During the 2008-2009 school year, private college costs averaged $37,208 and a 4-year education at a public institution (tuition and fees) averaged over $30,000*.

However, higher education still has an advantage when it comes to life-long career earnings. College graduates earn anywhere from 58-78% more than non-graduates, which really adds up over many years of paid employment.

So, you understand the importance of post high-school education for your children and you’ve decided to make it a priority to start saving.  But, how much money should you save and where do you put it?

First, decide how much you can afford to set aside every month towards college savings.  Almost every financial expert will tell you that retirement savings is a higher priority than college. Why? Because there are many sources of funds available for post-secondary education, and the banks don’t offer loans for retirement.  So, look at your monthly money “buckets” and see what amount can be committed to education. In the beginning, it may only be a small amount. That’s ok – even a few dollars a month is better than nothing. The key is to “save early and save often”.

Then, decide what to do with the money. The good news is that there are lots of ways to save and tons of information about how to fund your child’s college dreams.  But, it can be overwhelming, and not every option available is right for your situation. You will need to do some research and maybe consult with a financial professional.

Here are some of the more popular ways to invest in your child’s future education and a few resources to learn more:

• State Savings Plans – Called “529’s” after the section of the IRS tax code that authorizes them, these are state-sponsored plans that have many advantages including tax-free growth, anyone can add contributions to the plan, and it’s transferable among family members. Most 529 plans can be opened with as little as $25. And, certain plans can be linked to a Upromise account where you earn rewards for eligible purchases on the things you buy every day like groceries, gasoline, online shopping, and more at over 40,000 participating retail stores and services. These rewards are then transferred to a 529 account where they grow tax-free.
  
  
• Education Savings Accounts (ESAs) – Also called the “Coverdell” ESA, these provide tax-deferred growth and tax-free withdrawals when the proceeds are used for qualified education expenses.  These accounts are flexible and can be used towards any level of education, not just college. There are some income restrictions for upper level income families.
  
  
• UGMAs & UTMAs - The Uniform Gifts for Minors Act (UGMA) and the Uniform Transfer to Minors Act (UTMA) are similar and are a way for minor children to own securities (stocks, bonds, mutual funds, etc.) and allow college savings and wealth transfer to children and/or grandchildren. These do incur taxes at child’s rate after first $750, then at a normal tax rate.
  
  
• CDs (Certificate of Deposit) - The College Savings Bank offers 3 different college savings products. Each feature FDIC insurance, principal protection, and they are wrapped within several tax advantaged programs.

*General inflation figure based on the Consumer Price Index produced by the Bureau of Labor Statistics. College inflation figure based on the Independent College 500 Index produced by the College Entrance Examination Board.

Stacey Sherman is the owner of Family Life By Design, a company dedicated to coaching and training families and youth in the important life skills of Home & Family Management and Personal Finance. She is a Certified Family Manager Coach and Creative Wealth International Coach based in North Carolina.

The Business of Families

We are all anxiously awaiting the re-vitalization of our economy so friends and family who lost jobs can get back to work, "nest eggs" can recover from the huge cracks they've suffered, and we can get a reprieve from all the negative news stories that have dominated the radio, TV and internet. 

While there is a sense of hope in the country, we've been told that it will take some time for the economy to fully recover. So, while the U.S. economy works to "fix" itself, we might be well-served to work on our own economies. Did you know that your home is an economic institution on a micro-scale? Income, expenses, budgets, purchasing decisions, long-term growth strategies and much more are not just the "business of business". They are also the business of families! 

We need to periodically assess the departments of our homes just as any business does quarterly reviews. And, given the current state of the financial world, now is a good time to evaluate your Finances Department.

First, think about what your family’s financial philosophy/values are. How do you view money – as a tool, a means to an end, something to spend freely and enjoy? Does your spouse/partner have the same or differing views? Has money caused conflict in your life? How?

Next, determine if you are meeting your financial goals. Are you living within your means or from paycheck to paycheck? Did you establish a six-month emergency fund this year? Are you using those coupons you clipped to save money or are they collecting in a drawer? Do you include your children in any of your buying decisions? Does your spending reflect your priorities? What changes do you need to make in your monthly spending to align your priorities?

Then, examine your family’s current financial plan. This includes everything that affects your family’s current and long-term financial life. Create a spending and savings plan that gives each dollar you earn a “job,” schedule an insurance check-up with your agent to review your coverage (home, auto & life), evaluate your investment and retirement accounts, make sure your family is protected by ensuring vital documents, like wills and living wills, trusts, and powers of attorney, are updated. 

These steps will help you begin to take a good look at your family’s finance department.

If you would like to do a more detailed and structured assessment, David Bach, author of the Finish Rich book Series, has a detailed FinishRich workbook that includes helpful exercises, checklists and planning tools.  Be sure to check your local library for a copy.

Stacey Sherman is the owner of Family Life By Design, a company dedicated to coaching and training families and youth in the important life skills of Home & Family Management and Personal Finance. She is a Certified Family Manager Coach and Creative Wealth International Coach based in North Carolina.

Storing Important Papers

Springtime seems synonymous with cleaning, organizing and purging. Usually it’s closets, drawers and living spaces that are the focus. But, now that tax day has passed and you probably have 2008 tax records still lying around, it’s a great time to go through all your financial papers and get organized. It will help you with everyday money issues and it is vitally important for the long-term security of your family’s financial well-being. Here are some tips to help you get going:

Find a central location. Often times, important papers and information are stored in various places in your home. It is best to find one general area so you know exactly where to find information quickly and easily. Location suggestions include a home office, a cabinet in your kitchen, a bedroom closet, or close to the place where you pay your bills.

Decide what needs to be filed and /or stored. Monthly bill and bank statements, investing and retirement account statements, insurance policies and other important papers like your wills and power of attorney, household equipment manuals, website info such as user names and password, auto records and medical information.

Select a type of filing system. This is dependent on the amount of space you have available and your personal preference. A traditional filing cabinet or drawer is the most common form of filing. But, three-ring binders work well as do accordion-type folders. For longer term storage, such as past tax and mortgage records, use a plastic storage box and store in a closet, attic or basement. For important papers, keep originals in a safe box at your banking institution or purchase a home fire-proof box. If you had to leave your home in 20 minutes, could you quickly gather all your critical documents to take with you?  Suzi Orman sells a Protection Portfolio that stores your most important information in a grab-n-go sturdy, waterproof case.

Set up file or folder for tax-related /deductible records. As you are paying bills or writing checks, drop donation/charity letters, dividend stubs, medical receipts, and various other receipts directly into your tax file. This will mean less time next tax season sorting through twelve months of old statements and receipts to find the tax-deductible ones.

Develop a routine. Schedule time to file and review financial statements on your calendar along with other daily or weekly tasks. Try incorporating filing as you pay bills to avoid piling and to save time.

Keep only what is necessary. For a concise list of what financial records to keep and for how long, read Bankrate.com’s article on how long to keep financial records.

SHRED IT!! Whether it is last April’s bank statement or an application for a credit card in today’s mail, don’t just toss it, shred it!  Crosscut shredders can be purchased for as little as $20 and are worth every penny to help protect against identity theft and financial fraud.

Stacey Sherman is the owner of Family Life By Design, a company dedicated to coaching and training families and youth in the important life skills of Home & Family Management and Personal Finance. She is a Certified Family Manager Coach and Creative Wealth International Coach based in North Carolina.

Financial Literacy for Youth - Tips & Activities

Did you know that April is Financial Literacy for Youth Month?

“April showers bring May flowers”. Remember this saying? It means that a rainy springtime will bring abundant flowers in the coming months. So what do rain showers and flowers have to do with April being recognized as Financial Literacy for Youth Month? Lots!

Like flowers, we nurture and cultivate our children with the anticipation that they will blossom into vibrant, beautiful young adults. So, when we start teaching them about personal finance, we need to remember that learning about money is no different than any other growth process -- it takes time. We need to start talking to children about money when they are young and give them small, continuous but relevant bits of information that they can absorb. Then, we can sprinkle on more information to help them build a strong foundation.

It doesn’t have to take tons of time to do and can be a fun learning experience for the whole family. And, since April is Financial Literacy for Youth Month, now is a great time to start. Here are a few ideas to get you going:

Instill the habit of saving money. Any simple empty jar, plastic zip bags, or a piggy bank will work great. For tweens and teens, check out the cash cache. When starting, the amount isn’t overly important. Just have them put some amount in daily or weekly.

Open a savings account for your child(ren). Take them with you to the bank and explain what a savings account is and why people use them. Use everyday opportunities as teachable money life lessons. Using coupons, shopping for re-financing rates, writing out checks, on-line bill paying – these are just some of the things you can explain and share with your kids while you do them.

Schedule a family fun night and play personal finance related games. Monopoly and Monopoly Junior, Life, Pay Day, and Cash Flow for Kids are a few favorites. For younger ages, create counting and matching games with coins or play “store."

Watch movies or DVD’s about money and related life lessons. Afterwards, ask your kids what the movie was about, what the lesson was and how they can use what they learned. For pre-school/elementary ages, check out The Money Mammals. Other movies – Pay It Forward, National Treasure, Boiler Room, The Pursuit of Happiness.

Read books together. Visit Children's Book About Money for a good listing by age. Ask your child what the book’s message is and what they learned from it.

So, start sprinkling a few of these activities into your family time and you will be on your way to raising children that blossom into financial responsible adults!

Stacey Sherman is the owner of Family Life By Design, a company dedicated to coaching and training families and youth in the important life skills of Home & Family Management and Personal Finance. She is a Certified Family Manager Coach and Creative Wealth International Coach based in North Carolina.

Last Minute Tax Tips

(ARA) - If you have yet to file your 2008 tax return, don’t panic. The key to getting it done quickly and efficiently is to have a game plan and know what to look for before starting. Use these tips to make doing your taxes easier this year.

Stimulus Plan
The new stimulus plan does not affect your 2008 Federal tax return unless you bought your first house between April 9, 2008 and June 30, 2009. If you did purchase your first house in this time period, you may qualify for the First-time Homebuyer Credit. To claim the First-Time Homebuyer credit, you’ll need to complete Form 5405. Keep in mind, however, that if you take the credit, you must pay the amount back over 15 years of subsequent tax filings. In other words, the credit is like an interest-free loan.

Tax Preparation Software
Using tax preparation software can help you be more efficient and accurate. Not only does it include the latest tax law changes like the updated First-time Homebuyer Credit, it also does the math for you and notifies you when information is missing. Most products are easy to use and understand, and include advanced tools to find deductions and credits. The price, additional fees, and included forms and schedules differentiate the products. For instance, some include five federal e-files.

e-File
Nearly 90 million taxpayers e-filed their returns in 2008 and the Internal Revenue Service reports that nearly 52 million tax returns have been e-filed this year. The IRS has made a big push for filing your tax returns electronically this year, and for good reasons. Thanks to the software that checks for mistakes, the error rate for e-filed returns is about 1 percent, compared to 20 percent for hand-filed returns. Those who owe money are also given additional payment options, including credit card, electronic funds withdrawal and the Electronic Federal Tax Payment System.

Tax Refunds
Approximately 75 percent of taxpayers receive a refund. So far this year, the IRS reports that the average Federal refund is $2,811. If you need your refund sooner than later, it’s best to e-file with direct deposit. This method makes it possible for you to have your refund in as few as eight days, compared to up to four weeks with paper returns. Through Form 8888, you can split your refund into more than one account.

Alternative to Filing an Extension
If you can’t pay the full amount you owe, don’t file for an extension. Instead, file your return and pay as much as you’re able to by April 15 in order to avoid penalties and interest. The IRS will send you a bill with a notice and only charge interest and penalties on the unpaid balance. You can contact the IRS at (800) 829-1040 to discuss payment options, including short-term extensions, Installment Agreement or compromise. More than 75 percent of taxpayers eligible for an Installment Agreement can apply using the Web-based Online Payment Agreement application available at www.IRS.gov. Tax extension guidelines and process vary by state, so check with your state’s tax agency if you need a state extension.

Regardless of the question or topic, it’s nice to know you’re never alone. Information about various tax topics is available around the clock on the IRS Web site at www.IRS.gov, and more tax tips and TaxACT product information can be found at www.TaxACT.com.

Courtesy of ARAcontent