By Heather C.
One of my New
Year’s Resolutions is to start putting money away for emergencies. We have a good amount of savings already: money for the unknown but as for a true emergency savings account, as in going from one income to zero income due to layoff or disability or whatever, we are lacking. Experts recommend having at minimum
six full month’s income set aside in liquid cash accounts (checking, money market or savings) with most now advising to continue building that fund to have nine to twelve months’ income.
In order to get this kind of money set aside, we had to make some major changes in our spending. So with our first paycheck of the year on January 15th, we started a budget. Yes, I said that dreaded word. Budget. We’ve had a very good amount of success so far so I thought I’d share some of our favorite tips.
1. Plan out your meals. Some people use free printable calendars, some just use a notebook; some use a dry erase board. The options are endless. But before you start the week, jot down enough meals to cover every night for dinner. Use what you already have to your advantage so food does not go to waste. Apps on your smart phone like Big Oven allow you to search for recipes using specific ingredients.
2. Use the envelope method. If you really need help refocusing your money, there are classes you can take through Dave Ramsey’s Financial University. During the course you will learn about the envelope method. The theory is that it is impossible to go over budget when you have an envelope of cash marked for its purpose (groceries, gas, eating out, etc.) Once the envelope is empty, you are done, no questions asked. Anything left over goes to savings. If you are like myself and hate using cash, you can create a simple excel spreadsheet, download software from the Internet or use an easy manual app called the Easy Envelope Budget Aid. These things allow you to use the protection
of a credit card for your spending (and still earn your rewards) and still track how much is left in your envelope so to speak.
3. Have a goal. If you are just saving up as much as you can “for emergencies” for as long as you can, it gets boring. It makes it too hard to stay on track. Rather than saying “I need to save $20,000” focus on saving $1,000. If it takes you a full year, it’s still $1,000 more than you had last year. Saving is a lot like losing weight, it takes a big life change and a lot of work. Don’t forget to reward yourself. Meet your first goal and go out to eat or splurge on a new game or movie that you’ve been telling yourself you didn’t need while sticking to your budget. Or for every $100 you save for emergencies, save $10 for you. When you get to play with some of the savings every once in a while, the end goal no longer feels like it will never happen.
There are plenty of sources out there to tell you how to save money but if you can’t get a grasp on budgeting your spending, none of that advice will help you.
So moms and dads, how do you keep your family on budget? Share you tips with us and other readers here.
You can contact Heather by emailing her at firstname.lastname@example.org.
While you are here, you may also enjoy these posts:
Chore and Allowance Advice
Should Parents Pay for College?
Three Bank Fees You Should NEVER Pay
Another Lemonade Stand? Really??
Moms Worth 100K Salary... At Least