Get Involved In Your Family’s Finances

I am not a personal finance blogger.  I don’t have any special personal finance acumen.  I can’t give you any secret tips to get and stay out of debt aside from what has worked for us, which is simply don’t buy something if you can’t pay for it right away and develop a hatred of owing money.  That’s about all that keeps us out of debt, my absolute hatred of being in the hole.  We live within our means and prefer to spend large chunks of our money on travel and home improvement {and gadgets, let’s be honest} instead of new clothing all the time and car payments and other short-term forms of entertainment.  We don’t go out a lot, and when we do go out it’s because I’ve found some sort of Groupon or discount.  I can’t remember the last time I’ve gone shopping for myself.  In my mind, every $25 I spend on a new top is $25 I don’t get to spend on vacation or $25 I don’t get to put into an interest-bearing account or retirement fund.  I have a weird mind, I’ll admit.

Now, I do have a credit card that we keep in circulation just to accumulate Disney rewards points to spend on vacation, putting one or two big purchases a month on and paying off every month.  Sometimes I let the balance carry if we’ve had unforeseen expenses and I don’t want to take money out of savings to pay it off, but as long as the balance isn’t over $1,000 I’m happy.  But aside from that card and our mortgage, we have no debt.  Our cars are paid for, we have no student loans thanks to scholarships, generous parents, and being able to cash flow Zac’s last year or so of school {thanks to having no other debt}, and everything is paid up every month.  We each pay certain bills {all out of our joint account, but we have just parceled out the bills so one person isn’t responsible for all of them} and Zac handles filing our taxes every year.

That last bit seems to be where I’ve painted myself into a corner.  I’ve never filed my own taxes.  I always gave my W2s to my mom because she was the family accountant and did everybody’s taxes at once.  Then I got married a year after graduating from college and started filing taxes jointly with my husband, so I just handed over my W2s to him and he took care of everything else.  Fortunately our taxes have never been very complicated so we have always used the taxes in a box system from TurboTax or H&R Block without any issues.  Until now.

Earlier this year we got a notice from the IRS saying that our income tax returns from 2010 were never filed and we owed many thousands of dollars in taxes for that year.  Which to my knowledge was incorrect, and later confirmed by my husband to be incorrect.  He mailed them a copy of our filed returns from 2010 and we thought that would be the end of it.  Several weeks later, we got another notice saying that our 2010 returns were never filed.  So we sent in another copy of our returns from 2010 via UPS so that we would know they were received.  We heard nothing for a couple of months.  Then about two weeks ago, we got a notice from the IRS saying that we owed a little over $2,600 for the 2010 tax year.  No detailed explanation, no “this is why you owe this money”, just the amount and the deadline to pay it or set up a payment plan.  Well, I’m not going to pay it until I know exactly why they think it is owed, and why we’ve gotten refunds in subsequent years when they claim our returns for 2010 were never even filed.  So Zac made contact with the IRS, which reset the clock and gave us an additional 30 days to have a CPA go over our returns and try to figure out what is going on.

If it turns out that we legitimately owe the money I have no problem paying it.  But I need it clearly explained to me.  It may be something like some information was entered incorrectly, so an exemption was granted that should have been or vice versa.  But I don’t know, because I’ve never filed my own taxes.  So I can’t even carry on an intelligent conversation about the issue with anyone from the IRS or the CPA that will be helping us.  On this issue, I’m completely dependent on my husband.  And while I love and trust my husband implicitly, I need to be more involved and more knowledgeable about this issue in case something ever happens to him, or just to be able to carry on a conversation and know what the heck is going on.  I could be told anything and have no idea how to verify it.  And I do not like being at the mercy of other people when it comes to holding onto my money.

When I think about how funny I am with my money, it is actually a little mystifying to me that I’ve just blithely gone on for nine years without getting involved in our taxes.  I have spending alerts, savings goals, budgets set up; I keep track of tithes and charitable donations.  I check my account a few times a week and my retirement account after every pay period.  I like to know what is happening with my money at all times, even though it isn’t a huge amount of money.  So I think it’s time to pull my head out of the sand regarding our tax returns, if for no other reason than to have an idea of what is going on when something like this happens.  I need to be able to talk to a CPA or IRS agent and figure out what is happening, and right now I can’t do that.  It not only puts me at a disadvantage, but it puts the entire burden of figuring out this situation on my husband when he may or may not have time to do so.

I know there are people out there who are not involved in their family’s finances at all.  Stay-at-home moms who just rely on their spouse’s pay stubs to know what they can spend, or have a monthly spending allowance on the credit card.  Husbands who just hand over their entire check to their wives so they can handle all the bills and shopping {like my dad}.  And if that works for your family, great.  It’s worked for my parents for 34 years.  But what if something were to happen to my mom?  My dad doesn’t know what bills need to be paid on what date.  I’m sure she has a store card or two that he doesn’t even know about, and even though she pays off everything every month, what if she charged something on a store card and then something happened?  He wouldn’t even know to pay that bill.  It would be completely overwhelming to him to have to suddenly head up his household’s finances.  What about a stay-at-home mom whose husband leaves or is in an accident?  What if one spouse or the other has a secret credit card that they’ve run up, and it becomes too much to handle even the minimum payment?  What if a job loss happens, as it did to us last year?  What if your obligations cannot sustain a sudden drop in income?

Yes, this stuff does happen.  Quite frequently, actually.  This is why both spouses/partners need to be involved in every aspect of their household’s finances.  This is why Zac and I regularly have State of the Household meetings and talk about our family goals and budgets and make sure that we are both on the same page.  We go over our accounts regularly, we check our credit regularly, we tweak our 401k contributions when necessary.  And this is why I now regret not taking an active interest in filing our tax returns every year.  Since I’m extremely invested in our household’s finances, it makes no sense to not be involved in preparing our taxes.

That changes this year, and you can take that to the bank.

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