5 Groups of People Who Should Learn Budgeting

5 Groups of People Who Should Learn Budgeting

5 Groups of People Who Really Need to Learn BudgetingIt doesn’t really surprise me when I meet people who don’t budget. I’ve been at it for so long and it’s become such a major part of my life that it’s rare I go a day without thinking about budgeting. But, I wasn’t always like that.

At one point in my life, I was one-half of a newly married couple that was 100K in debt! Deciding to set and stick to a firm budget changed our lives, our relationship, and our future.

If you haven’t yet started budgeting, I’d suggest giving it a shot – especially if you are in one of the following groups!

Young Adults

Budgeting is important for young adults as they begin to navigate life on their own. They’ll be faced with new expenses like student loan payments and possibly rent for the first time. 

For many, this is the stage of life where either positive or negative money habits will begin to form. If positive habits form in early adulthood, those habits are likely to remain throughout their lives. 

Young adults may begin planning for larger expenses like a wedding, purchasing a first home or car. These are all expenses that are much easier to navigate when budgeted for.

Newly Married Couples

a couple learn budgeting together

A budget is really helpful for newly married couples because they may be merging bank accounts, spending habits, and even debt for the first time. You could have a situation where one of the partners was a budgeter prior to the coupling and the other wasn’t, where neither has ever followed a budget, or where both are dedicated budgeters. 

A newly married couple may be paying off large bills from a wedding and/or honeymoon. They may be considering purchasing a new “Forever” home. 

They are at a high risk of falling into poor spending habits as they may now have a newly combined income and the freedom and desire to eat out often, travel freely, and shop at will. 

It is especially important to learn budgeting as a newly married couple begins to consider growing their family. 

Families

It is beyond necessary for every family to have a budget. Families need to know how much money is coming in and going out each month. When a couple adds kids to the mix, the spending and needs expand. Without a clear picture of what is going where, things can get sticky really fast.

The more people in the family and depending on the ages of the kids, the possibility for unexpected expenses increase.

Additionally, kids are expensive. People don’t just say that to be funny, it’s true! Have you seen the prices for organized sports and summer camps? These are often expenses you’ll need to plan for far in advance. 

Other large expenses families need to budget for – travel. The cost of traveling exponentially increases (especially by plane) the more people you add to the family. Your weekly grocery bill will also explode with both an infant (formula and diapers) and teenagers (they eat allllll the food, seriously). 

Using budgeting strategies to prepare for these things in advance will keep your family protected in the event of a crisis. 

Single Adults

Single adults can also greatly benefit from a set budget. Oftentimes, single adults find themselves supporting themselves as well as dependent children on one income. There may also be a mortgage and car payment to consider.

For a single adult supporting a family on one income, an unexpected crisis can be completely devastating. Having a budget where you regularly add to your savings could be a true life saver. 

Kids

A kid learn budgeting

Even kids should be learning about budgeting! I know they might seem young but I promise you, it will be worth it. The earlier you begin to teach your kids the value of money, the better set up they’ll be in their adult life. 

Since my kids were 4 and 6 years old, I’ve had them use piggy banks to start teaching them the concept of earning and saving their money to pay for things.⁠ Now that they are 9 and 11, I’m working on introducing the concept of budgeting with them.⁠⠀

I’ve created a great system for us and you can check it out here. I’m sure it will evolve over time but for now, they are learning the basics of what I want them to learn and practice as adults.⁠⠀

When kids learn budgeting strategies at an early age, they will bring those habits with them into adulthood. 

 

I’m guessing you’ve gathered that it’s important for EVERYONE to learn budgeting. If you are looking for assistance in setting up your family budget, I’m here for you! Let’s chat about 1:1 coaching and I’ll help you set up a systems and routines that will work for your unique family.⁠⠀

Pros and Cons of Joint and Individual Bank Accounts

Pros and Cons of Joint and Individual Bank Accounts

Pin image for joint and individual bank accounts postSo, you’ve met that special person, dated, and fallen in love. You trust each other, want to be together 24/7 and do everything together. Ahhhh, young love. 

Now you’re faced with that age old question – do you join your bank accounts? Some might even say the decision to join bank accounts is an even more significant commitment than marriage. 

Now that you’re part of a couple you might be trying to decide if joint or individual bank accounts are right for you, here are some things to consider:

Joint Bank Accounts

A joint bank account is a bank account that is managed and owned by more than one person. It functions just like a standard account, except it can be accessed and modified by more than one person. 

Pros of Joint Bank Accounts

It Makes Things Easier: Having joint accounts with your partner leads to more simplified budgeting and bookkeeping. With everything in one place, you can more easily monitor what’s coming in and what’s going out.

Partnership: Ever heard the saying, “What’s yours is mine”? Well joining bank accounts shows you really mean it! It can also be a way to build and grow something together as a team.

You Can Save on All the Fees: I’m not saying that joint accounts don’t have fees, but with a joint account, you can minimize the number of accounts and therefore the fees. 

a couple tries to decide on joint and individual bank accounts

Cons of Joint Bank Accounts

Secrecy: One major disadvantage of having joint accounts is that, since your partner can always see where/how you are spending money, surprises can be easily spoiled. You’re far less likely to receive a surprise gift, be surprised by a vacation, or have a successful surprise party thrown in your honor. But, I can think of worse things. 

Overmanagement or guilt: If one partner is a spender and one is a saver, you may be in more frequent spats, hold grudges, or undergo a power struggle around joint finances. 

Messy Breakups: Joint bank accounts can cause really messy situations in a breakup. Be sure of your relationship before joining accounts.

Individual Bank Accounts

An individual account is a personal bank account that is used by an individual. It is for personal banking as opposed to a shared corporate account or joint account.  

The front of a bank

Pros of Individual Bank Accounts

Maintain Your Independence: Many people feel what they earn is theirs and that they shouldn’t be accountable to a partner for spending their hard earned cash.

Complete Control: With an individual account, you have financial security and complete control over your own financial situation. 

Protect Your Assets: If one partner has multiple or higher assets, it may be wise to keep them separate, especially in instances where the other partner carries a lot of debt.

Cons of Individual Bank Accounts

Bill Management: Managing who pays what bill and from what account can get tricky when you are managing a household from individual accounts. It is necessary to make clear what bills get paid, from what account, and by who. 

Trust Issues: Trust issues can arise when you are unable to easily view finances, purchases, and income with your partner. 

In Case of Emergency: I know, we don’t want to think about this, but having separate accounts can pose some issues if one member of the couple is incapacitated in any way. The partner may have a difficult time gaining access to the accounts. 

What works for us.

What works for us might not work for you. My husband and I have all joint accounts. We do things this way because we believe it is all our money. Also, all of our bills and credit cards are in both of our names. It is important to us that we each have full access to all of our finances. 

Every relationship and partnership is different, so what works for us might not be what is best for you and your family finances. Be sure you weigh the pros and cons of joint and individual bank accounts before you make the decision for your relationship. 

 

If you are looking for assistance in setting up your family budget, I’m here for you! Let’s chat about 1:1 coaching and I’ll help you set up a systems and routines that will work for your unique family.⁠⠀

3 Reasons to Involve the Whole Family in Budgeting

3 Reasons to Involve the Whole Family in Budgeting

In many families, all of the finances, bill paying, and budgeting fall squarely on the shoulders of one family member. I definitely understand that usually one person takes the lead on finances. But it is still so important for so many reasons that all members of the family are involved in money discussions and decisions. 

Here are 3 reasons to involve your whole family in budgeting:

Both Spouses Should be in the KnowPin image for family budgeting

In any couple, there is usually one person who takes the lead with finances and one person who is happy to hand it all over. It is important that the spouse who is ready to wash their hands of the finances doesn’t completely turn a blind eye. They need to stay in the know!

One very simple, and easy to understand reason both spouses need to know what is going on with your family budget and finances is in case of an emergency. If, god forbid, the budgeter in the family becomes incapacitated for any reason, the last thing you are going to want to spend your time doing is sifting through financial records you likely don’t even understand. 

To keep both spouses aware of what’s going on in the household financially, we suggest making time to meet and discuss finances. Have your “Money Meeting” minimally, once a month. If possible, I’d even suggest doing it once a week. As your kids get older, have them join in, too.

It is definitely okay for one spouse to manage the budget. But the other should be 100% aware of what is going on and have complete access to all financial documents and materials. 

Overall, I think both spouses should be in the know about the finances, whether one or the other physically manages it.

Teach Your Kids Valuable Skills at an Early Age

family budgeting together

Looping your kids in on your budget is a good way to get the kids learning what it takes to run a household at an early age. This is a lesson they won’t ever forget. 

I totally understand the desire to hide weakness or difficulties from our kids. Of course, we want to shelter our kids from any unnecessary stress and allow them to be kids for as long as possible. But, they should also enter adulthood with a realistic idea of how finances work.

This is why we recommend speaking openly about money, costs of different things, and bills in front of and with your kids. We also recommend including your kids in spending decisions starting at a young age, and inviting them to your money meetings as soon as they are old enough to grasp what is going on. 

Since our kids were 4 and 6 years old, we’ve had them use piggy banks to start teaching them the concept of earning and saving their money to pay for things.⁠ Now that they are 9 and 11, we’ve been working on introducing the concept of budgeting to them.⁠⠀ 

Kids that grow up in a home where money is discussed openly and honestly, become more conscious and responsible with their own spending and expenses.

One day, your future daughter or son-in-law will be thanking you for raising such a money conscious child. 

family budgeting

What’s the Big Deal, Anyway?

This might be the simplest reason of all to get the whole family involved in budgeting. Ready for it… why not? What is the big deal? As far as I can see, there is no downside to getting the whole family involved in budgeting. It brings partners closer together, eliminates placing blame, makes everyone aware, and helps develop responsibility in kids. 

Budgeting is not something to be feared or hidden. If you have family members who avoid budgeting, it’s likely a sign that they NEED to be budgeting. If you make budgeting a big scary thing, it will feel like a big scary thing. In reality, a good budget is actually pretty simple and easy to follow once you take the steps to put one in place. 

Make your budget fun and speak about it openly – your whole family will rally together and really bond over budgeting. It might sound crazy, but trust me, it’s true – just look at my family! 

 

If you are looking for assistance in setting up your family budget, I’m here for you! Let’s chat about 1:1 coaching. I’ll help you set up systems and routines that will work for your unique family.⁠ You can find out more about my family budgeting services here!

Why You Need a Budget Now!

Why You Need a Budget Now!

why a budget is important Pinterest ImageBack in 2008, my husband and I were young, naive, and nearly 100K in debt. Two years into our marriage, we found ourselves living paycheck to paycheck and barely making ends meet. We had no emergency fund to fall back on and we had no clue how bad our spending habits had gotten.⁠⁠⠀

We got ourselves into a huge mess and we didn’t know how to get out of it.⁠⠀⁠⠀

Many families are going through unprecedented and unexpected financial difficulties right now. With most states issuing shelter in place orders and businesses closing aside for essential personnel, we’re seeing a spike in unemployment like never before. ⁠Many people who never imagined and never planned for losing their jobs are now finding themselves unemployed and unsure of where to go from here. ⠀

Is There a Lesson to Learn from Being in Debt?

⁠Believe it or not, waking up to only $10 in the bank was a blessing in disguise for us. It taught us a lot more than we ever expected.⁠⠀⁠⠀

We had to really dig deep and ask ourselves if the kind of life we were leading was the kind of life we wanted our kids to grow up in. Only then were we able to make some changes that have lead to us living the debt free life we now enjoy.⁠

What Happens When you aren’t Financially Prepared for a Crisis?

why a budget is important

A crisis can take many different forms. It might be an unexpected medical expense, a totaled car that you still owe on, a house fire, or an unexpected layoff. It could also be a global pandemic that cripples the entire nation leading to a complete financial crisis. If I’d said that last one a few months ago, I bet you’d have looked at me like I had three heads – but here we are. 

Needless to say, our current situation was not anything anyone was expecting. And, it’s hard to prepare for something that you can’t even dream up in your worst nightmare. But, when we aren’t prepared for a crisis, that is when we are most vulnerable .

If you have been caught off guard in this crisis without an emergency fund, you can use this time to really evaluate and reprioritize your family goals. It may not feel like it right now but maybe it is also your family’s blessing in disguise.⁠⠀

How Can I Get a Budget in Place Quickly?

If you’ve found yourself in a tough spot financially for the first (or maybe, second, or third) time in your adult life, it’s not too late to take action. Don’t throw in the towel. With a little hard work, some tough decisions, and some smart budgeting, you can get yourself out of this mess. 

But, the first thing you’ll have to do is let go of blame. You can’t begin to make the necessary changes in your habits if you are holding onto blame – of yourself or others. Then you’ll need to establish a reliable budget and to stick to it. 

Here are some simple budgeting tips:

  • You need to know exactly how much money comes in each month and how much goes out. 
  • Develop a system or process to pay down your debt.
  • Begin to spend within your means.
  • Add to your savings each month.

Following these simple steps will help you prepare for the next crisis. 

How Can We Prepare Financially for a Future Crisis?

why a budget is important

Please believe me, having your finances in order and being prepared for a financial crisis does not make you a DoomsDay Prepper. 

The number one thing to do to prepare for a future crisis is to begin saving money in an emergency fund. Open a savings account and begin to add to it each month. Look into accounts with the best perks, like higher interest rates and lower fees. 

Start small if you need to. Make sure that you are working to build it up each month and only taking from it in the case of an actual true crisis.

I Can Help You Out

Having been where you are now, I know the range of emotions you’re going through. I know I never want to be back in the place and I don’t want you to be either. That’s why I’ve made it my goal to help others take control of their financial situation through budgeting. 

If you’d like budgeting support, let’s chat about 1:1 coaching! I’ll help you set up a systems that will work for your unique family.⁠ Info here! Get your info here!

Kids Need Life Skills Now More Than Ever: Personal Finance Management

Kids Need Life Skills Now More Than Ever: Personal Finance Management

I recently heard an interesting story from a business peer whose daughter started college in the fall. This mom was telling me that she received a call from her daughter thanking her for teaching her how to cook, clean and do her own laundry. She was pleasantly surprised that her daughter had thanked her for teaching these skills and she asked her daughter what had prompted the call. Her daughter relayed to her that she had been horrified when she discovered that her roommate didn’t know how to do any of those things.  

If your kids were to go away to college today, what kind of phone call do you think you’d receive?  

What life skills will your child know by college?

What skill sets do you want them to leave home with that will give you the peace of mind of knowing they can take care of themselves? With the right preparation, we can get our kids on the right track, so that they can each acquire these important life skills.

You may be thinking, what ‘life skills’ should I be teaching my kids? 

We’ve put together a four part series that will highlight different types of life skills all of our kids desperately need to learn before heading off into the world. Ultimately, as a parent, you get to choose which life skills are important to you and your family, but this series will give you a thorough overview of the areas I focus my time on with my kids.

First Up in our Life Skills Series – Let’s Chat Personal Finance Management.

Personal finance is one of the most essential life skills, that we don’t tend to teach the next generation. I guess we just assume they will just figure it out like we did. 

However, I think many of us (I’m raising my hand right now, too) took a bit longer to figure it out than necessary. I don’t know about you, but if I can help my kids now to avoid the mistakes I made later on down the line – I’m all for it. 

Because of that, I’ve already started on many of these lessons with my own kids.

HOW TO BUDGET

7 personal finance life skills Pinterest imageThe ability to budget and be financially responsible is absolutely vital to your life skillset. It’s a skill we can learn from a very young age and one we should build upon throughout our lives. Setting financial goals, taking care of your money and calculating expenses are an important part of budgeting.

HOW TO AVOID/GET OUT OF DEBT

Learning to live within your means is definitely a learned skill. Learning to slay your debt is about keeping your spending in check and managing a plan to pay off your debt quickly and efficiently. We refer to it as a war, slaying, tackling and fighting because it’s truly challenging. But, the amazing thing is, with a little practice, avoiding debt is a war that we can teach our kids to win.

HOW TO MAKE A MAJOR PURCHASE

Maybe your kids are about to buy their first car—or maybe just their first new jacket with their allowance money. Whatever it is, they should understand how to compare prices, how to do research via Consumer Reports, and how to make a smart, well informed, purchase.

BALANCING YOUR BANK ACCOUNT

How many of us just use our debit card without writing things down? How many of us pay bills online or have them set up to automatically be debited from our accounts and then sort of forget until they show up on our bank statement? 

Being able to record your expenses is a skill that keeps us in touch with your finances. It’s important that our children understand what it truly means to use their debit cards and actually physically subtract the money from their bank accounts. It keeps them immediately accountable for what they’re spending. Have them try committing to write things down for a month and see if you notice a difference in their spending patterns. 

HOW TO USE COUPONS

Learning how to use coupons can actually be fun for kids! My children love it and it’s really easy to get started. With a little organization and some practice, you’ll become a couponing queen (and you’ll rarely catch yourself or your kids paying full price for ANYTHING).

MONEY MANAGEMENT/INVESTING

Once they have saved a lot of money or have their debt paid off, understanding how to invest their money wisely is also a huge learning experience. Even people who have money to spare have trouble with investments and making that money grow. 

Really, there are very few ways to “get rich quick” aside from winning the lottery, and most investing and money management attempts have to be carefully vetted and researched. Show your kids how to research various areas of investment such as the stock market, real estate, or startups before they decide to let go of their hard-earned money.

EFFECTIVE NEGOTIATION

effective negotiation - life skills

Bargaining, bartering, negotiating—it’s a learned life skill many of us shy away from. Learning how to trade, make an offer, and be comfortable with asking for a better deal can save you money. It can also be a valuable skill when you’re faced with a tricky money situation (like asking for a raise) where negotiating is essential and expected. 

Teach your kids not to shy away from making a bargain. Challenge them to practice until they feel comfortable. That might mean saying, “Is that the best you can offer?” over their next big purchase or you could have them set up a swap with a friend to practice negotiating. This will help them learn to stop cringing whenever a negotiating opportunity presents itself.

Our kids need life skills now more than ever. Period. End of story. As their parents, it is our job to teach them. But, when we don’t know where to start – it can be overwhelming. My advice, start with personal finance management. Come back next week for part two where we’ll be chatting about cooking and cleaning. 

In the meantime, you can grab our completely FREE Family Chore and Money System Action Guide, here. You can also hop over to Facebook and watch me walk through how to use it, here. If you’d like even more support, let’s chat about 1:1 coaching and I’ll help you set up a systems and routines that will work for your unique family.⁠⠀

4 Signs Your Kids Need to Learn the Value of Money

4 Signs Your Kids Need to Learn the Value of Money

The day you realize your child or children have no concept of the value of money can be both jarring and eye opening. We all want to raise confident, empowered, educated, well prepared kids. But often times, our desire to give our kids the absolute best can lead to entitlement issues. 

In reality, the best gift we can give our kids is an education in life. One of the most important life skills for any kid to learn is the value of money. It’s not always an easy concept, especially for young kids or kids who’ve already established a pattern of being given everything they ask for. But, it’s also never too late to start and reverse old patterns that didn’t serve your family well. 

You might be wondering if it’s time to start talking to your kids about the value of money. If you’re wondering about it, I’m guessing you’re already beginning to see the signs below and that’s why it’s begun to weigh on you.

Here are 4 signs your kids need to learn the value of money

They say “I need” when it’s really a want. Pinterest image - 4 signs your kids need to learn the value of money

Teaching our kids the difference between a want and a need can be so difficult. While it is tricky to explain to littles and sometimes confusing for them to work out in their minds, it is so important. If they think they “need” things that are very clearly wants, this is a major red flag. 

They tell you to just put it on your credit card. 

The first time I told my child we weren’t getting something because I didn’t have cash on me and he responded with, “That’s okay mom, just put it on your credit card”, I actually froze in my spot. 

Kids see, hear, and absorb more than you might expect. Which means, they’re likely seeing and hearing ads for credit cards all over the place. 

If you don’t show them your cards or talk to them about credit, from what they see on TV, they may think credit cards are a magical flow of endless money in every adult’s pocket. If they can verbalize this – it’s time to talk to them about how credit really works.

They expect to get something whenever you’re out shopping.

I feel like this was one of my biggest mom fails for a long time. Every time we were out shopping ANYWHERE I would allow my kids to pick something. To me, it was worth the money to have them cooperate on the shopping trip. 

Boy was I wrong about what this habit was actually teaching my kids. The headaches it gave me down the road were far worse than simply having said “No” on the spot. Which leads us nicely to…

They throw a tantrum when you say “No” to a purchase in a store. 

Child throwing a tantrum in the store because she doesn't know the value of moneyEvery parent HATES being the one who’s kid is melting down in the store. So, many of us do whatever we can to avoid it. Like, letting them have whatever they want just to simply avoid the public embarrassment and shame that will come along with their tantrum. 

In reality, if they react this way to your saying no, it’s a definite sign that they need to learn about what can and can’t be bought and why. They need to learn how money works and when and where it should be spent. 

It’s never too early to start talking about money

Bottom line, it’s never too early to start talking to your kids about money and showing them the real value of money. The more kids see and are involved in your conversations about finances and budgeting, the better prepared they’ll be to handle their own finances as young adults. 

If you grew up with no concept of the value of money, you don’t have to repeat the pattern with your own children. 

Now that you know your child NEEDS to learn about money, what do you do?

First, you’ll need to know if they are cognitively ready to learn about money. Can they count? This is important. For more information on determining if they are cognitively ready to talk about money, check out this post

If you decide that they can handle the topic, next you need a plan. This is where we can help you! We’ve devised an action plan for establishing a chore system and budget WITH our kids. To completely understand the value of money, it’s so important that your kids be involved in the family budgeting process.