Sunday, May 25, 2008

Finances for Beginners: Let's get started!

Anytime you are going through a life change like beginning to manage you money more effectively the first step is always to Get Organized. This can mean different things for different people depending on where you are in life.

Maybe you are the kind of person who spends impulsively and is left at the end of the month with lots of bills an no money to pay them. Or perhaps you just can't make ends meet in your current job, and you need some help getting your bills to a manageable level. For you, the first step in getting organized is writing a list of all the money you will need in the next two weeks. Include money for food, transportation, and other miscellaneous expenses. Once you have your list, prioritize it. Rewrite it in order of importance from most to least. Put this list somewhere you will see it whenever you spend money. Some good places are the table where you sit to pay your bills, your wallet or purse, or in your checkbook. When you see this list, it will help you avoid impulsive spending by reminding you of your money's other obligations.

If you are in a dead-end job that just can't pay the bills, it sounds like it's time to look for another one. It can be hard getting a job for a single parent. Sick kids, parent-teacher conferences, and field trips can cause us to miss a lot of work days, and some employers just aren't willing to accommodate that. Also, childcare for your children and afterschool care for older kids can be very expensive. Your best defense is a strong support system. If you don't have family and close friends nearby to help you, try getting involved in a local church. Look for a loving church that honors God and accepts you and your family for who you are. You could also start a moms group. Ask other moms that you know to come to your home or meet in a local park. Tell them to bring their friends, and soon you will be meeting regularly and bonding together. One important thing to remember is that you must be willing to help each other when you can. You are not supporting each other if you just get together to let the kids play once a week and don't contact each other any other time.

If you aren't in a tight spot with your money and you get your bills paid every month but just don't know where all that money goes, you can start here. Make a budget. Start by writing out your monthly expenses. Don't forget food, transportation, and other miscellaneous expenses like diapers or medication. Also remember to set aside money each month for bills that come less often. For example, in some cities the water/trash pick-up bill is only sent out every three months, or maybe you pay your car insurance every six months. That way these bills won't sneak up on you and ruin your plans for your money. Also, determine how much money you can afford to save each month.

Next, rewrite you list of expenses in order of the date due by. If you don't know for some bills, it can be found on the bill. It is usually the same date every month. Don't forget to write the money that you are planning to save at the top of the list. Always pay yourself first! This way that money you were planning on saving won't end up going to those really cute shoes on clearance that you don't need. But also remember to set aside some money for you to spend on whatever you want. This is the money for taking the kids out to eat or buying the new shoes. Remember: once you spend all the money you budgeted, that's it! Don't give yourself anymore! Force yourself to spend it gradually throughout the month rather than all at once.

To figure out how much to budget for food or other expenses that you don't receive a bill for, save all your receipts for a month. You might be surprised at how much you are spending. Save money and set goals. Try to spend ten or twenty dollars less every month until you are at a spending level that you are comfortable with. Look at ads in the newspaper to see how has the best prices on what your family eats and clip coupons on things that you already buy. If you decide to try something new because you have a coupon, the new item must be a healthy replacement for something on your list with the same price or higher.

Well, that should be some good information to get you started. No matter what your financial situation is, managing money can be a daunting task. One of our goals as parents should be to create a better future for our children, so in the next post I am going to talk about applying everything you learned today to your kids in order to begin teaching them money management skills at an early age. Know that your families are in my prayers every day!

No comments: