A common complaint among consumers today is the lack of funds. Regardless of how much money a household might earn, there never seems to be enough of it. Making do with an average income is the goal of any household budget. In fact, the entire family should get involved in their financial management. Explore how managing the family’s money can turn out to be a worthwhile venture.
Formulating A Budget –
Families must create a budget before they can move ahead with a secure future. Take a look at every person’s income. Add up the household’s expenditures in a given month. Ideally, the family spends less than it makes.
This scenario doesn’t occur by accident. Many people rely on credit to keep up with their family expenses. Verify which expenses are fixed each month, such as the mortgage, and cut back on areas that can be adjusted. Buying name-brand clothing can be substituted with the store’s brand with equal quality, for instance.
Seeking Out Sales And Coupons –
There’s no reason why a family must pay full price for everything. Clever money management includes a hawk-like eye on local sales. Stock up on those household staples when they’re on sale, especially if they’re nonperishable items. Canned goods, toilet paper, paper towels, and other products should be snapped up when sales are flourishing.
Look for coupons in the mail or online. Saving a quarter here and there will add up to dollars later on. Use both paper and online coupons to see the savings add up. Check out coupon and promo code smartphone apps as well.
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Earning Money From A Child’s Perspective –
Teaching children about money management takes a bit more creativity. Handing out allowances or money upon request doesn’t teach responsibility. Parents might encourage earning money by offering specific amounts for chores around the house.
Avoid paying for good grades, however. Excelling in school should be the reward itself. It pays off when the children reach college and beyond.
Talk to the children about smart spending, such as cooking food at home instead of heading to an expensive restaurant. As they grow up, these lessons can be solidified in their minds.
Understanding Needs Versus Wants –
Families should create a list of items that are categorized as needs or wants. Some people might be surprised at the long list of wants that aren’t really necessary. Focus on the essentials first (the needs). Any extra funds can be put toward a few wants that are agreed upon by the family. It’s important to cover the necessities well before any frivolous desires.
Saving For Goals –
Budgeting for monthly expenses is the main priority, but don’t forget about other goals. Most families have a mixture of long- and short-term goals. Long-term costs include saving for retirement and college, for example. Short-term goals involve upcoming vacations or investments in a property.
Create savings accounts for these goals. Allocate a specific amount from the household’s income to these accounts each month. Pretend the money isn’t there to spend on everyday items. When the time is right, those long- and short-term goals can be achieved.
Preparing For Emergencies –
There may be a lot of household bills, but prioritize a savings account that’s geared toward emergencies. Put a steady amount of money into the emergency fund so that the family has a financial cushion in the event of a problem.
Ideally, put around six months of income into an emergency fund. If anyone becomes ill, injured, or loses a job, the funds are available to help the family thrive. Living without emergency funds means that credit or expensive loans might be the only solution.
Adding Insurance To The Mix –
A household budget may be stretched pretty far, but don’t overlook the importance of insurance. Policies are another monthly expense that saves the family money in time. Homeowner, renter, life, and auto policies protect families if a significant loss occurs. Thousands of dollars might be at stake without proper insurance protection.
Look for reasonable coverage with an affordable rate. Bundling various policies together might save money too. Insurance providers often discount their coverage with multiple policies in place.
Cost-Cutting For Family-Style Debt Management –
In the event of economic downturn, your immediate concerns might be bills or debts: rent or mortgage payments, electricity, gas, student loans, food, and essential utilities like water. In previous articles, we discussed how those individuals and families on a budget or debt management program can stretch their incomes – or even enter emergency debt mode, or declare bankruptcy if need be.
However, you still have other expenses to combat as you put together a debt management plan or discuss your financial situation with your credit counselor. You might be surprised to learn that most of these expenditures are unnecessary and that most have cheaper alternatives that are just as good. You can change your thinking from a carefree spending mindset to a thrifty, frugal, anti-bankruptcy mindset by exploring some more money management advice outlined below.
Daycare Or Childcare –
Like many families, you might be a member of a “both parents work full-time” household. There is no one available to watch the children between 9 a.m. and 5 p.m. weekdays. What’s a concerned parent supposed to do? After all, you don’t want to trust your children with just anyone!
There are great reasons to forgo daycare altogether if you can. Cost is the most obvious one. BabyCenter online states that daycare costs can reach $8,000-$15,000 per year. Worse, many daycare workers are underpaid themselves. The US Bureau of Labor Statistics states that the average income of non-supervisory daycare workers is not much more than 10 dollars per hour. Overworked, stressed, underpaid daycare center attendees are not likely to provide your child with the care he or she needs. And, with the number of kiddie colds and permutations of rotavirus going around, daycares are germ factories, as well.
If your child is over the age of five, check with your child’s community and school to see if low-cost programs are available. Many elementary schools offer after-school sessions for children with parents who work. Because the children are surrounded by teachers who are more likely to be invested in their learning than a daycare center would, the quality of an after-school program can be quite good.
Younger children might benefit from a church- or community-center-sponsored daycare program. In one northern suburb of Pittsburgh, PA, for example, the local Presbyterian church offers daycare for children who live in that community at virtually no cost, accepting children up to kindergarten age.
Children of all ages will benefit from a neighbor or relative, helping out with daycare costs. Perhaps you have a neighbor who is a stay-at-home mom, or one who works nights and needs extra cash during the day. That person might be a great resource for childcare services. Make sure your neighbor is a trustworthy person and well versed in childcare before proceeding, of course. Grandmas and grandpas love to watch the grandkids, too: Providing your senior parents are mentally and physically fit, they might make some of the best childcare providers your children will ever see.
There are yet other options, as well: If you and your spouse work later in the day, a trustworthy and mature teenager in the community is an excellent bet for childcare. Teenagers enjoy babysitting to earn spending cash for clothing, entertainment, and that ever-coveted set of first wheels, and they usually don’t ask for a lot of money. Make sure to request references if you select a teen to watch your child.
You can also ask your employer for a daycare benefits program or work-share or distance-working option. As technology continues to advance, and as more and more employers begin to view “work perks” as a sound solution to retaining workers, these options are becoming increasingly available.
Parent Care –
Your job might require you to be immaculately groomed, or wear expensive business clothing, and you might find yourself amassing huge salon and dry-cleaning bills as a result. Isn’t it funny: You’re going to work, ostensibly to avoid credit card debt or bankruptcy, and somehow, the bills you amass to get you there are contributing to a poor credit score. Fortunately, there are ways to cut back without looking like Oliver Twist when you’re presenting at a company meeting. See if you can fit some of them into your debt management plan:
First things first: There are some clothes that absolutely, positively cannot be washed at home. Suit clothes and silk blouses are two examples of such clothing. You can, however, strategically space out the time between cleanings. Ehow.com recommends spot cleaning for items that are clean enough all over, save for a stain or two. Seltzer or clear soda is a great way to remove stains from dark blazers and suit jackets, including dust, dirt, and deodorant smears. This site also recommends investing in Dryel dry-cleaning bags, which can typically be purchased at your local big-box store such as Target or Walmart. You can fit several articles of dry-clean only clothing into Dry bags with the special dry cleaning sheets. You toss the bags in the dryer for a bit, and wham, clean clothes at a fraction of the dry cleaners’ cost.
Some items can be washed at home, allowing you to forgo the dry cleaners altogether. These might include cotton-polyester items, non-silk dress shirts, and the like. You should always wash these items on the Delicate or Knits setting of your washer, in the coldest water. Use less detergent than you would for your jeans or towel loads to avoid wear and color fading.
When the load is done, divide it up. Items like cotton dress shirts can be placed in the dryer on the lowest setting for about a half-hour. The, you can press them by running an iron heated on low over them. Other items, such as skirts, can be placed on shaped wooden hangers and pressed into place by hand. Allow them to air dry, and then, gently run an iron set to “low” on them. Always iron polyester or polyester-blend items on the reverse side to avoid scorch marks.
Hair and nail care can be tricky. Most of our readers probably do not know how to cut or color their hair, and disastrous results might require you to shell out even more money than you would have, had you hired a professional to help you in the first place.
The good news: If you’re simply covering gray hairs, there exist a wide variety of hair colors on the market that get the job done nicely, and on the cheap. The Just For Men line offers colors in every shade, and a 5-10 minute dye job can take years off of your looks. Nice N’ Easy hair dye works to cover up grays on men and women. Caveat: If your hair is longer than shoulder-length, you might need to buy two boxes.
(Note: Hair color changes more than a shade lighter or darker than your natural color, or an attempt to cover up hair that is more than 50 percent gray should not be attempted at home.)
To save money on haircuts, skip the expensive salons in favor of Supercuts or another low-cost chain like Great Clips. You can also hire someone you know – say, a friend or relative – who is skilled at hairdressing to cut your hair. You may need only barter a favor as payment. The local beauty academy is yet another option. For example, a local beauty school will offer low-cost haircuts and coloring sessions because the beauty school students who are approaching graduation do the work.
As for manicures, they are an expense that should be cut out of your debt management plan completely. You or a friend or family member can trim cuticles, file nails into shape, and apply two coats of color and a top coat. If you get polish on the skin around your nails, it will come off the next time you wash them. Consider the savings: two bottles of Revlon ColorStay nail polish, a nail file, and a manicure scissors will run you about $12-$14. Even if you use each item for only 20 manicures, your manicures wind up costing 70 cents each! Compared to a nail salon manicure that could be anywhere from $35-$50 each time.
Family expenses are controllable to a certain degree. Learn from any past mistakes, and save as necessary for next time. Life holds a lot of surprises, but your finances don’t have to suffer every time. Families with clear objectives will come through with a healthy bank account and financially secure lifestyles.
Have fun incorporating these tips into your family’s money management game plan – talk it over with an experienced credit counselor (it’s completely FREE). Loosening the reins on worry over credit scores, bankruptcy, or debt management will enable you to think about your job and your kids, instead of fretting over dollars and cents.
If you need help with money management or debt relief, give us a call at 1-866-699-2227 and we’d be happy to help! It’s what we’ve been doing for over 50 years now!