Tag Archive for Budgeting

How to Help Your Adult Children Create Their First Budget

How to Help Your Adult Children Create Their First Budget

How to Help Your Adult Children Create Their First BudgetIt?s hard to believe, but your kids are on their way to becoming their own adults. Time goes fast, and it probably seems like they were tiny little ones just a few years ago.

As a parent, you have done a lot to get them ready for their own life. If you would like to add another helpful preparation to the list of things you have taught them along the way, consider helping them create their first budget.

When kids move out, most of them don?t have a clue as to how the ?real world? works. You have been paying the bills for years, mostly behind the scenes. The kids usually don?t see the utility bills when they roll in, and they don?t see the mortgage payment get taken from your bank account each month.

Now that they are getting ready to head out on their own, you can use your experience to help them avoid some silly ? and costly ? mistakes.

Start Early

This process can start before your kids are even thinking about moving out of the house. In fact, as soon as your child gets his or her first job, have them set up a budget that they can use to track where that money is going.

They probably won?t have many bills at this point, but it is still a good idea to use a budget. Set aside some for savings, maybe some for a car payment, and outline how the rest will be used. This is going to be a rather basic budget, of course. But, it will lay the groundwork for responsibilities later in life.

Explain Taxes

It is one of the hard realities of life that making $15 per hour doesn?t mean you actually take home $15 for every hour you are on the clock. The concept of taxes is something that is vaguely familiar to most teenagers. But, they certainly don?t have an intimate understanding of how taxes work.

Take some time to explain what kind of taxes they will pay as an employee, and how they can plan for filing their federal return each year.

Outline Adult Expenses

The expenses that you have to deal with as an adult tend to pick up over time. So, your child probably won?t have too many to deal with when first setting out. There are a few big ones, however, such as rent, car payment, student loan, and insurance.

Lay out how all of these things are going to work on a monthly basis. Tell them what they should cost, and how they can be minimized (like getting a roommate to share rent, for example).

Sadly, these kinds of things are not typically taught in school. So, it is your job as a parent to give your child the advice they need at this critical time. By sending them out with the right knowledge, you will increase their chances of making wise financial decisions.


Have you started teaching your kids how to budget? When did you first start teaching them about money and budgeting?


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6 Reasons You Might Need to Overhaul Your Budget

6 Reasons You Might Need to Overhaul Your Budget

6 Reasons You Might Need to Overhaul Your BudgetIf you track a household monthly budget, you are already off to a good financial start. Many people don?t bother with a budget, and they may wind up making poor financial decisions as a result. Simply by taking the time to establish a budget, you are already ahead of the game.

But your job is not finished when you set up your budget for the first time. Once the budget is in place, you need to adjust it on an ongoing basis to make sure it remains relevant.

Things are sure to change over time, so your budget will have to adapt accordingly. The following six points highlight reasons why you might be due to overhaul your budget.

1. You Aren?t Saving

The ability to save each month is an important feature of a budget. Your personal budget should be set up in such a way that it allows for monthly saving ? if that isn?t happening, you should try to make some changes.

Even if you can?t save a large sum of money on a monthly basis, being able to put something away will help position you for a better financial future.

2. You are Struggling with a Category

This point is easiest to explain with an example. Let?s say you have included $500 in your monthly budget for food. If you start to notice that this is a tough mark to hit. Maybe your kids are getting older and eating more food. Then, it would make sense to overhaul your budget.

This isn?t a problem of you just not sticking to your budget. Rather, it is a problem of the budget no longer being relevant. Make the chance and then adjust other parts of the budget as needed.

3. Your Priorities Change

Let?s say that you set up your budget a couple years ago, when you were actively involved in a certain hobby that took up some of your funds. These days, you no longer participate in that hobby, and that money goes unaccounted for each month. This is a good problem to have, but you really should find a spot for that money in the monthly budget.

4. Your Income Changes

This is an obvious point, but you will need to overhaul your budget if you have a change in income. Hopefully, this means your income has gone up, but the same idea would apply if your income goes down. Take the time to evaluate your expenses in light of the new budget and make changes accordingly.

5. You Are Nearing Retirement

Making the decision to walk away from your career and retire is a big step in your life, and one you cannot afford to take lightly. Of course, you will want to do plenty of preparation in advance of making such a choice. One of the things you can do is overhaul your budget to ?trim the fat? and make sure your expenses are going to be workable in retirement.

6. Changes to Fixed Bills

At one point, you may have allotted a certain amount of money each month for utilities. Of course, those things are bound to go up in cost over time, to the point where you will need to update your budget. To a review of your entire budget and find places where you need to revise how much money was attributed to some of your bills.


When was the last time you decided to overhaul your budget? Did it help?


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Do?s and Don?ts for the First Time Budgeter

Do?s and Don?ts for the First Time Budgeter

Do?s and Don?ts for the First Time BudgeterMaking the decision to start budgeting is one of the first steps to getting your finances in order and keeping them there. But sometimes it?s easier said than done.

After all, there are several steps to the budgeting process. In addition, you can find financial advice from many different sources, some of which contradict one another.

To help sort everything out and keep you from referencing multiple documents at once, here is a list of do?s and don?ts for the first time budgeter.

Do?s for the First Time Budgeter

1. Do give yourself a little wiggle room in your budget.

Build in some flexibility, such as allowing a little bit of your money to go toward entertainment. You can choose later if that entertainment is going out to eat or to a movie or some other fun activity. Creating wiggle room can keep you on budget.

2. Do search for low cost or free options to replace some of the things you are currently paying for.

For example, try DirecTV Now for watching television instead of cable and save money.

3. Do use apps.

Apps make it easier to budget and manage your finances. One to try is Personal Capital. It’s free to use and pulls in all of your accounts so you can see everything in the same place at the same time.

4. Do plan ahead for bills that fluctuate.

Heating, water and other bills may change from month to month or season to season. Make sure you set aside enough to cover what you owe during higher usage months.

5. Do set financial goals.

Some of your financial goals might be things such as saving for a new car or saving for retirement.

6. Do create priorities for using your money wisely.

For instance, you may need to pay debt down before you are able to set aside money for a newer car. It’s not wise to continue paying interest on debt when you could be paying it off faster.

7. Do pay more than the minimum on debt you owe.

Paying extra is the only way you will ever get ahead, especially if you have high interest debt, like credit cards.

8. Do automate paying bills whenever you can.

This way you ensure you don?t miss a payment so you can avoid being charged late fees. It also takes a few more things off your never-ending to-do list.

9. Do re-evaluate your budget.

You should re-evaluate your budget every six months to a year to account for any major life changes. For example, if you got married, your bills probably changed drastically. So, you need to budget for the changes.

Don?ts?for the First Time Budgeter

1. Don?t be inflexible when it comes to what you want.

You may have to give a little to create a workable budget. For example, you might have to cut back on salon visits or exercise at home instead of paying a gym membership.

2. Don?t forget to set aside money for emergencies.

There is no way to plan for some things that happen in life. If you plan ahead for financial emergencies by saving money in a rainy day fund you will be able to cover them when they happen.

3. Don?t overlook annual or irregular bills.

Some include taxes, doctor bills, dentist visits, eye doctor appointments, car repair bills and more. Set aside money for these expenses each month in a saving account. Then, when you have bills come up periodically for these bills, you will be able to pay them.

4. Don?t neglect to take into account deductions that are taken on your pay.

Calculate your budget based on your net income and not your gross income. You should at least have taxes that are coming out of each paycheck and possibly retirement contributions and health insurance too, among others. What?s left is your net income.

5. Don?t stop budgeting if you get off track one month.

Instead of giving up, look at where you went wrong and why. Try to prevent it from happening again, and get back on track.

6. Don?t use someone else?s budget for your own.

Your own needs will be different and your bills will likely be different too. You need your own budget tailored to your needs and expenses.

7. Don?t procrastinate when it comes to paying your bills.

Paying them on time can save you money in late fees. Instead, use that money to pay down debt.

8. Don?t try to keep up with the Joneses.

It doesn?t matter what your co-worker, neighbor or family member has or does. Trying to keep up with others makes you spend more and puts you in debt.

Budgeting is an important part of financial well-being. If you are a first time budgeter, use these dos and don?ts to help you create a budget that works.


What other do?s and don?ts would you include in this list?


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4 Reasons Why Seasonal Budgeting May Work for You

4 Reasons Why Seasonal Budgeting May Work for You

4 Reasons Why Seasonal Budgeting May Work for YouWhen you think about crafting a budget for your household, you probably think first about doing so on a monthly basis. That makes a lot of sense, of course. After all, most of your bills come in on a monthly schedule, so it makes sense to track your spending using this unit of time.

However, there are some drawbacks to monthly budgeting. If you allow yourself to spend the same amount of money each month, you won?t be accounting for the fact that your spending may vary from season to season.

As the year goes by, there may be changing demands on your money, which could make it hard to hit your budget targets.

Before you nail down your budget for the coming year, it would be wise to at least consider planning on a seasonal basis. If one or more of the four points below applies to you, seasonal budgeting might be the right way to go.

You Have Kids

With kids ? especially school age kids ? seasonal budgeting is a smart choice.

During the summer months, you are almost certainly going to spend more, as you will be active with the kids. Whether it is taking a family vacation, going to local attractions, or just eating out a little more often, the summer can be expensive.

While it is important to continue to monitor your spending in the summer, you should allow yourself a little bit of leeway in order to have a great time with your children. Tweak your budget by allowing for more spending in the summer months as compared to the winter so you can more accurately match your lifestyle.

Your Utilities Fluctuate

Those who live in a particularly cold climate will be familiar with the rising utility costs that come along with running a furnace for several months at a time. On the other side of the coin, those who live in a hot area know that the summer can be tough with regard to heating bills since the air conditioner will be working hard.

If you have utilities which vary greatly between the summer and winter months, take that fact into account while building your budget.

You Work Seasonally

Some jobs demand far more out of their workers in one season as compared to the rest.

A great example of this is a tax accountant. While this is a year-round job, most tax accountants work extremely hard in the weeks and leading up to the tax filing deadline in April.

Someone in that position probably doesn?t spend much money during February and March, for instance, because they are always at work. The budget could be reduced in those months, while being expanded slightly during months where the office isn?t so busy and there is more time to do other things.

You Have One Specific Hobby

If you are someone who is passionate about one specific hobby, and that hobby only takes place during a certain part of the year, you will want to consider that hobby in your budgeting.

One example that perfectly highlights this concept is skiing. As a skier, you are going to take part in your hobby during the winter months, of course. That might mean taking a bit of time away from work, and it will mean spending money on things like lift tickets, equipment, and more.

Build these activities into your budget and plan on cutting back when skiing is out of season.


Have you ever tried seasonal budgeting? Did it work for you?


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4 Reasons You Might Need More Than One Budget

Why You Might Need More Than One Budget

Why You Might Need More Than One BudgetKnowing where your money goes is important. This is where a budget can come in handy!

Budgets are great for helping you see where your money goes and how you spend your money. They can be as complicated or as easy as you make them.

It does take discipline to make a budget?work, but once they do work the possibilities are endless. A good budget doesn’t make you feel restricted!

When looking at different types of budgets,?there are tons to choose from. Most people utilize a single household budget. There are others who use more than one budget for a single household. You may think this could be overkill, but here are some reasons why you might need more than one budget.

You’re Working Toward a Goal

Your regular budget marking how much money you have going in and how much you have going out is perfect to seeing how you spend your money. But, if you are working towards a larger financial goal such as saving for a house, buying a house, saving for a car, a vacation, etc., having a second budget strictly for that goal will help you stay on track to see how much you should be saving.

For example, say you are wanting to buy a car, but you don’t know how much to save. You could create a budget specifically for that car. Make a line item for the cost of the car, add insurance, gas and maintenance costs. This budget then will help you save for it, as well as helping you see if you can afford the car in the first place.

Budgets for a Specific Event or Holiday

Event and holiday spending add up quickly. A separate budget shows how much you spent and how much more you can spend without going over budget.

For example, if you are getting married, a separate wedding budget will greatly reduce spending on unnecessary items. Do you really need 100 doves to fly overhead as you exit the ceremony or will bubbles suffice? 😉

The same goes for a birthday party, or vacation. Setting up a small budget for events you know are coming up will take the strain off of overspending and allow you to be smarter with your purchases.

Budget for Christmas

If you have a large family, or love to buy gifts for everyone you know, Christmas spending adds up fast. A lot of people take on credit card debt at Christmastime, which can derail their other financial goals.

To help watch your spending and make sure you have the money, create a budget for Christmas. Write down who you need to get gifts for and the amount you want to spend. You can set this up in January, and save for it throughout the year. By saving early, you can start shopping early to buy gifts on sale throughout the year.

For Projects and Hobbies

Not all hobbies require a budget, nor do all household projects. But some expensive hobbies or large household projects may require a budget of their own. Don’t go blindly into a big project like a re-model without a separate budget.

Setting up a second or third budget shouldn?t be scary. Large corporations and businesses work off of more than one budget to turn a profit. Of course, yours doesn?t have to be that involved. Keep it simple so you can save for the things you want most in life.

Do you have more than one budget? What are your extra budgets used for?


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