The financial crisis has moved from Wall Street to Main Street. Across the country and throughout the world, more and more people are learning to buckle down with their finances. Whether clipping coupons or eliminating discretionary spending, the free flow of cash is no longer readily available.
A greater challenge is for parents. Raising children has its advantages, but when difficult financial times occur, the challenges compound. In today’s society parents must understand their role in a family’s financial freedom. Provided will be family money management for the budget-savvy parent.
The first step in family money management for the budget-savvy parent is a complete reduction in expenses. Every expense in a home should be placed into two categories, need and want. When looking at a need, consider sustainability of life and not an arbitrary excuse. A family needs shelter, clothing, and food. All other items within a home should be placed in a want category.
For example, the big game is coming on this weekend and you need to watch this game. Change your thinking to, “I want to watch the game, but I realize my family could save anywhere from $50-$150+ a month in cable expenses.” A library card is free and so is the sports page which will show the winner of the game.
Family money management for the budget-savvy parent must include grocery shopping. Parents can reduce spending by buying store brands and not name brands. Also, look at the unit of measure. Depending on the item the price may be higher, but in the long run the saving are there if the unit of measure price is lower than another item. Another handy tip while grocery shopping is signing up for a stores’ preferred shopper card.
Staying Out of Debt
The easiest way to stay out of debit is to not create debit. This statement may appear to be callous, but true. Stay away from in-store offers for instant credit. Don’t be tempted to apply for mailed offer for credit either. The reason is the fluctuating A.P.R. and A.P.Y.
Once the initial plan of reducing expenses is enacted, use the saving to your advantage. The extra money should be used to pay down and eventually pay off high interest credit card debt. The final obstacle to cross when considering staying out of debt is eliminating the dependency of credit cards.
Again look at the need verses want equation. If there is not a critical survival need, do not use your credit cards. Once they are paid off, cancel all credit cards.
For a family money management for the budget-savvy parent, investment can come with a high return. Be cautious of investment opportunities without a guaranteed return rate. Investments should be fixed over the life of the investment. Instead of placing investments in volatile high-risk accounts, try low risk accounts such as a savings account. The return may not be as high, but the chance of lost money is non-existent.
Family money management for the budget-savvy parent isn’t just a catch phrase; it is a way of life. How you save now will have benefit how you live tomorrow.