Moms, we need to improve of our family finances. We need to have a knowledge and understanding of how much money comes in from where, and where every single dollar is going, for us to build a financial wall around our families. We must take full responsibility of our financial decisions or lack of thereof. No more spouse blaming. I had no idea we were in so much financial trouble, I was not handling the finances. etc.
Track all your expenses
Have a small note book and a pen with you all the time, write down every dollar you spend, at the supermarket, at the clothes store, Starbucks, farmers’ market, money spent on gas, write down all the paid online bills etc. This will make you think twice before spending since you will dread taking out the notebook, hence less spending.
Consider reducing your liabilities, draw up a budget, yes, the dreaded B word. do you really need that brand-new car that takes away a huge chunk from the monthly pay check? Maybe trade it in with a few years old but in good shape alternative car. Shop around for relatively cheaper mobile phone, internet, tv subscriptions.
Do the children’s clothes shopping on sale a season earlier; I swear by this tip. They will still be the same nice clothes. Buy dry groceries in bulk and stock up the pantry. Cut down on eating out from weekly to a few times a month. After all homemade meals are healthier and many times they taste better. Read more about budgeting tips in my earlier post here
Pay yourself first
I cannot stress this enough, no matter how small the paycheck, for every $100 you earn, save $10 in a savings account, $10 in passive capital e.g a retirement/investment account, another $10 to charity/tithing then spend $70. I learnt this principle from the late Jim Rohn; George Carson wrote extensively about this principle in his book The Richest Man in Babylon. There is improvement in my finances, my only regret is I did not learn of it sooner.
In case you cannot start with the above formula, you could start with $5, $5, $5 and $85 and work your way up. When the money in the savings account accumulates, invest it into something like stocks, bonds, or real estate this will in turn bring in more money.
Create a sinking fund
A sinking fund is when you set aside a small amount of money every month, for a certain amount of time for things that you know are “coming”. For example, you can decide to set aside $100 every month from January for car maintenance, another $100 for Christmas & $100 for birthday presents/parties & another 100 for the family vacation. You can keep the sinking fund at home, if you trust yourself, for me the bank is the best place.
An emergency fund is when you set aside a certain sum of money for unexpected things like sudden loss of income due to illness, unexpected home repairs, car repairs, water heater breaks down. Emergency fund prevents one from making a bad financial decision like taking up instant loans that have high interest rates and other fees. Putting away money is hard, but it is rewarding, gives peace of mind, when need for that money arises. Most financial experts recommend saving the emergency fund on an account, instead of stocks/bonds. This way it is easier to access the money should the need arise.
With these tips, you will notice an improvement in your family’s finances. Sometimes the hardest part about saving is starting, but as moms we need find that inner strength to stand up and do it. Dave Ramsey says that “live like no other, to live like no other.”