Say Goodbye to Living Paycheck to Paycheck: Choosing Your Budgeting Tools

choosing-your-budgeting-tools

This post is part of a series.  To start the series from the beginning, click here.  To browse through the series, click here.

Choosing your budgeting tools is one of the most exciting parts of budgeting.  This is where you begin to fit your budgeting to your style.

There are so many different types of budgeting tools to choose from.  Before picking out the types of tools that would be best for you, take a step back and think about your daily life.

Do you find yourself on the computer often?  If so, what types of things are you doing on the computer?  Do you use the computer just for games and chatting or do you also use the computer for emailing, school work, or for your job?  What is your comfort level with the computer?

Now that you’ve begun to think about the tools in your daily life, think about your comfort level with those tools.  Is using the computer a chore to you?  Or, do you enjoy the computer?  This could be a big hint as to which tool you should use.

 

Some of the most common budgeting tools include Computer programs, Computer or Phone Apps, Spreadsheets, Printables, and Envelopes for money storage.

These tools are not to be mixed up with the budgeting system you chose (Cash or Digital).  You can absolutely mix and match the systems with any type of tool.  For example, you can create digital envelopes or tangible envelopes.  You can also use an all cash banking method but use a digital tool to track your finances.  Or on the flip side, you could use a hand written register to balance your electronic funds.

 

With any tool you choose, make sure that the tool fits your lifestyle and that it will not cause you to go out of your way to use it.

 

Still haven’t quite decided on your tool of choice?  Consider your phone usage.  Do you have a smart phone? If so, do you use your phone for mobile banking currently?  Do you use an app to track your grocery list?  If so, an app may be a great option for you since it will fit in well with your routines.

Not comfortable with apps or computers?  A handwritten register or a printable may be the best option for you.

Once you decide which tool or tools you want to use, use them for a few months.  If you find the tool annoying or too time consuming, feel free to switch to another tool.  The point of budgeting is to make your life easier, not harder.

 

Join me in Part 4 as we talk about how to put it all together.  I will go into depth on all of the different budgeting directions, systems, and tools.

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Say Goodbye to Living Paycheck to Paycheck: Beginning Growth

Say Goodbye to Living Paycheck to Paycheck Beginning Growth

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The pre-teen years are great for reinforcing budgeting skills learned throughout childhood.  This is when the need for money becomes a bit more prevalent. Kids may want to go to the movies with their friends, run to the local candy shop, or buy that new trendy item.

One method to use to reinforce budgeting is to remind your pre-teen about the 50/50 rule. Half of money they make from allowance, dog-walking, babysitting, or any other side jobs needs to be put into savings and the other half can be spent.  This not only helps improve their financial responsibility, it helps set them up for success when they need a down payment on a car, need the first and last month for rent deposits, or even purchasing their first home.

I highly encourage all pre-teens to get a savings account if they haven’t already.  That way they have a safe place to put their saved money where it also won’t be a temptation.  While having a savings account is a big step in the right direction, knowing how to care for a savings account is also just as important.  The pre-teen should be taught how to reconcile their account monthly so they know how much they are saving and so they can double check that the bank didn’t hit them with any fees.  It should not cost any money to have a savings account.  If it does, look for an account elsewhere.

The other 50% of the money they earn can be spent however they want.  The most valuable lesson for the spending percentage is saving up for something that takes a bit of time to get to.  This is a very rewarding task and teaches a work ethic as well.

For the parents, it is also important to decide what types of things you will require your child to use their own money for.  While you may pay for your child to go to the movies, maybe any movie theater snacks are their own responsibility.  It’s important to start slow as they are still dependents.

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Say Goodbye to Living Paycheck to Paycheck: Creating the Roots

Say Goodbye to Living Paycheck to Paycheck Creating the Roots

This post is part of a series.  To start the series from the beginning, click here.  To browse through the series, click here.

The value of money is something so exciting to your young child.  The smallest amount of money seems so large and can be extremely motivating to them.  Around first grade or six years old, schools begin to teach students all about the value of money.  Children learn about pennies and nickels and dimes and quarters and all kinds of bills.  They also lean about dollar bills, face values, and how to add and subtract with all of their types of money. This new skill comes at a great time to begin teaching children how money is used in real life situations.

In order to create a life of financial stability, the school aged years are prime for teaching, modeling, and interacting with money. In the school ages years, children are very capable of understanding chores and allowances which can be used to show that we work to make money and then we have different options for what we do with the money. Each family should determine their own method for kids to earn money based on what fits best into their daily routines.

Once your family has put a system into effect for how their children will make money, the children need to be taught how to handle their money.  As adults, we all handle our money differently. Some people spend tomorrows money today by using credit, some spend only what they have but spend every penny each paycheck, and some save as much money as they can.  In order to create a lifestyle where living paycheck to paycheck isn’t the way, it is important to teach children how to save their money from the beginning.

To begin teaching saving to a child, you will need something to put the saved money into like a piggy bank or even a savings account, or both depending on the age of the child and how well they understand the value of money.

When the child gets money, let’s say from chores or an allowance, teach them to save by having them put a percentage of money each time into their savings. For example, you could give them $4 per week allowance and have them put $2 in savings and the other two they can spend or use to save up and spend at a later time.

Not only will this teach your child how to save up for something that they want, it will teach them how to save for a later date.   This concept is very important to learn at a young age because as an adult, we should each have a savings account for a rainy day.  For your children, I bet they will be very happy after saving a percentage of their money for years when they decide to buy a car or move out on their own.  Having taught your child to save their money from a very young age will give them a great head start in their young adult years.

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