Family Budgets Rule!
Families Are Expensive
As we know, raising a family is expensive! It seems there’s a never ending need for new clothes as children grow, unexpected school fees and an ever increasing cost for food. What’s to be done?
Know Your Exact Income and Needs
The first step is to know the total amount of monthly income you have and receive regularly. Don’t count your savings. With that number in hand, make a list of your absolutely necessary monthly expenses. Things like rent or your mortgage payment, lights, heat water, internet, groceries, car payments and required insurance payments.
List Discretionary Expenses
Next list your discretionary expenses. These expenses are things like clothing, dining out, Starbucks coffee, movie rentals, snacks, magazines, hair dying, massages, nail salon visits. lottery tickets. alcohol, jewelry, comic books, you get the idea.
Make A Budget
Now make a simple budget with these categories: Savings, Utilities, Rent/Mortgage, Food, Car expenses and Non-Essential items. Look at last month’s expenses and use those amounts to estimate future necessary expenses.
Pay Yourself First!
Put 10 percent of your income in a savings account for emergencies as soon as you receive it. If you can’t qualify for a savings account, I recommend a reloadable prepaid debit card. There are many reasons people choose a reloadable prepaid card over a credit card. First, a prepaid card requires no credit check or other qualification. Second, a prepaid card charges no interest and no late payment fees. Third, and perhaps most importantly, a prepaid card can act like a checking account, without the high monthly fees and potential overdraft charges.
Use Prepaid Debit Cards?
I personally like the Bluebird Prepaid card by American Express. It has very low fees and is great for budgeting. You can get as many as four cards (for teenagers?) and set spending limits on each one. If you live in a remote area, there may not be a lot of locations that accept American Express so be sure to check on that issue.
“The BlueBird Card from American Express is as close to a no-fee card as we’ve found. With no monthly or annual fees, no transaction or purchase fees, no bill pay fees, and no initial card fee if you order online, the Amex BlueBird Card can save regular users a lot of money.
Additionally, there are no ATM fees if you use one of the more than 25,000 MoneyPass® ATM locations. But perhaps the best feature of the BlueBird Card is the set of personal finance and money management tools that comes with it. Using the Insight® app lets you categorize, track and set spending limits for up to four separate cards. You can also monitor and manage your account from anywhere. In fact, the BlueBird Card is a great way for anyone to establish or relearn good budgeting and money management habits.”
If you can’t use the American Express card my second choice is the. Chase Liquid® Prepaid Visa®.
The Chase Liquid® Prepaid Card offers free direct deposit, free online bill payments, and free PIN and signature transactions, all for a low monthly fee of $4.95. Withdrawing money is also free at any qualifying Chase ATM or bank branch location.
Additionally, reloading doesn’t cost a thing at thousands of Chase ATMs and bank branches, or online through the Chase online banking site or mobile application. Plus, use Chase’s mobile app to instantly deposit a check to your account.
Have Family Budget Discussions
Now that you have secure and convenient access to your money, the next step is to draw a long line under the last budget item. It represents days 1-30 in the month. Write the day ON THE LINE that each of your necessary payments is due. What is the last day you can pay each bill without incurring interest? This is especially important if you receive a paycheck every two weeks instead of monthly.
Is it in the budget?
Now it’s time to get the family together to discuss their necessities for the ensuing month. Add each approved expense to the budget. Try to keep 20 percent in reserve for unanticipated expenses. Now as the month moves forward and you’re at the grocery store with your children and they want to buy some magazines, you can simply say: “No, they’re not in the budget we all agreed to last week.”
For information on allowances for your children, please see the page in this Blog titled “Should children get an allowance”? I hope you will also be able to allocate some money in your budget for your children’s post secondary education. Future Blog articles will discuss the best ways to save for post-secondary education expenses.
PLEASE SHARE YOUR TIPS AND TRIBULATIONS FOR LIVING WITHIN YOUR BUDGET WITH OUR OTHER SAVE FOR AMERICA BLOG PARENTS.