family budget

Ten Rules for Successful Money Management

The information in this post is provided by our partner Accel Financial Counseling. Accel’s counseling services and educational programs are available free to all Consumers members.

Always remember that the most important factor in using money wisely is not how much money you make, but how you manage your spending! Here are ten rules that can help you achieve financial success.

1. Arrange a family system for handling money and make certain that everyone in the family is involved and understands it.

2. Make a spending plan suited to your own income and needs. Don’t try to follow others – a spending plan is a personal system to help you and your family.

3. Decide on your family’s most important goals. Spend your money on things that will care for your family’s welfare and happiness. Take a minute to decide how important it really is to you and your family, before you make the final purchase.

4. Plan ahead for the entire year. A financial picture of your entire year will be a great guide and can help to meet your family’s financial goals.

5. Include all of your income and expenses. It’s usually easy for families to determine their income, but getting a grasp on expenses can be more challenging. Keeping receipts will help you track what you spend more accurately.

6. Use credit wisely. Don’t spend more on credit than you can afford to pay on a monthly basis. Responsible use of credit cards will help you establish a solid credit rating and avoid financial problems.

7. Pay yourself first by trying to save 10% of your income. If you can’t afford 10%, start with a smaller amount. Treat savings as a monthly bill.

8. Stick to your plan, but don’t be afraid to alter your program if you think it needs improvement. Never give up! Be determined and succeed.

9. Review your plan once a month.

10. Hold family meetings to review the progress together.

Need help getting started? As a member of Consumers Credit Union, you can take advantage of the Accel program, a free financial education and counseling program. Accel counselors are available Monday through Thursday 8 a.m. to 12 a.m. (EST), Friday 8 a.m. to 7 p.m. and Saturday from 9 a.m. to 1 p.m. To use this new service, simply call 1-877-33ACCEL (332-2235) or visit them on the web at www.accelservices.org

Seven Steps to a Successful Budget

The information in this post is provided by our partner Accel Financial Counseling. Accel’s counseling services and educational programs are available free to all Consumers members.

Budgeting can be a simple and straightforward process. It can also be a rewarding experience for all family members. But, it takes interest and commitment. Here are seven steps to help you create a successful budget.

1. Discuss Values

Determine what is most important to the people involved in your budget, or spending plan. By understanding these values, you can make decisions that will provide you with the most satisfaction.

2. Set Goals

Begin setting goals by discussing with family members what each one may want to do with their money. An example of a goal might be to save for a child’s education. Have each member list the goal and a deadline. Work on the most important goals first.

Put money aside in your budget for your priority goal. Remember, to achieve your special goal, you must treat the money as a bill to be paid to you.

3. Determine Income

Figure out your net pay, or the money that is left over after deductions. The money that makes up your income can come from sources such as salary, allowances, social security or child support. Do not include overtime pay.

4. Determine Expenses

What are the expenses in your budget? Consider fixed, variable and periodic expenses. Fixed expenses consistently stay the same every month, variable expenses vary from month to month and periodic expenses are not due every month.

5. Create a Plan

Design a spending plan so that your income will allow you and your family to have what you want and need. If you find that your income does not cover your expenses, re-evaluate your plan and decide what categories can be changed.

6. Keep Track of Expenses

Keep a record of expenses to see where your money is being spent. By comparing your estimated expenses with what you are actually spending, you can evaluate whether or not your plan is working.

7. Evaluate Your Plan

Periodically evaluate your spending plan. Is the plan still helping you meet your needs and achieve your goals?

Remember that budgeting is the cornerstone of your family’s financial plan and a guide to help you achieve your goals.

As a member of Consumers Credit Union, you can take advantage of the Accel program, a free financial education and counseling program. Accel counselors are available Monday through Thursday 8 a.m. to 12 a.m. (EST), Friday 8 a.m. to 7 p.m. and Saturday from 9 a.m. to 1 p.m. To use this new service, simply call 1-877-33ACCEL (332-2235) or visit them on the web at www.accelservices.org.

3 Tips for Better Money Talks

We’ve often shared our view that creating a budget shouldn’t be looked at as a chore, but an opportunity to prioritize where your money goes. Budgeting helps you cut out the spending that doesn’t matter to you so that you have more money for the things you care about it.

Of course, that’s why it’s can be difficult to start a conversation about money with someone else. It’s not just about the numbers—it’s about your individual priorities and values. It gets even more complicated when the financial choices of the other person impact your decisions and vice versa.

Here are our three favorite tips for talking money with your partner:

Ease into it

If you’re currently furious at your partner for spending you consider frivolous, it’s not the time to talk. Instead, wait until you’ve cooled off. When you’re ready, don’t start with accusations. Ask your partner why he made the choice he did—and focus on hearing him out. His reasoning may make more sense than you expected.

Work with the facts

If you and your partner don’t currently track your spending, it’s a good idea to do so for a month. You may think you’re on target to hit a financial goal you’ve been working toward (say paying off the last of your student loans), but not realize you could be doing so even more efficiently if you change some of your spending habits.

Tracking your spending can also help you better align your own individual goals and inspire impromptu conversations about your financial goals, as you learn more about each other’s habits.

Remember it’s not just about your spending

When budgeting, we tend to focus on where our money goes—how much to savings, retirement, groceries, etc. How we get that money—and how that affects our relationship with our partner—is just as important.

Those discussions can involve a constant tradeoff. Is it worth it for you to work longer days for extra income, but less time to enjoy it? What about your partner? Does one of you dream of opening a business, which might mean taking a pay cut until it takes off?

The more you and your partner get in the habit of talking about money and what it means to you, the easier the conversation will get.

Lead by Example to Teach Your Kids about Money: The Fifth Video in Consumers ConnectU's July Family Budget Series

“Teaching your kids about money should be as easy as learning your ABCs,” says Tim Kosak, Consumer Lending Manager at Consumers Credit Union. “Kids learn by watching.”

How do you set a good financial example for your children? Watch our video, the fifth in the Consumers ConnectU July family budget series, for tips on handling learning moments with your kids.

Did you miss earlier videos in the series? Catch up here:

How to Teach Kids about Money

How Much Does It Cost to Raise a Baby?

Protect Your Family from Identity Theft

How to Save for Your Children’s Education

How to Save for Your Children's Education: The Fourth Video in Consumers ConnectU's July Family Budget Series

How do you afford college for your children? “It’s a question many people are asking,” shares Tim Kosak, Consumer Lending Manager at Consumers Credit Union.

Watch our video, the fourth in the Consumers ConnectU July family budget series, to learn about your savings options (including some that provide additional tax benefits) and student loans.

Did you miss our previous family budgeting videos? Catch up here:

How to Teach Kids about Money

How Much Does It Cost to Raise a Baby?

Protect Your Family from Identity Theft

Protect Your Family from Identity Theft: The Third Video in Consumers ConnectU's July Family Budget Series

“Identity theft is on the rise. Even children’s identities can be targeted,” says Tim Kosak, Consumer Lending Manager at Consumers Credit Union. “But there are steps you can take to help thwart a thief.”

Watch our video, the third in the Consumers ConnectU July family budget series to learn how to protect yourself and your family from identity theft.

Did you miss the first two videos in this series? Find them here:

How to Teach Kids about Money

How Much Does It Cost to Raise a Baby?

How Much Does It Cost to Raise a Baby: The Second Video in Consumers ConnectU's July Family Budget Series

$235,000. According to the USDA, that’s what it will take to raise a child to the age of 17, not including college! So what can a budget-conscious family do to keep costs low? “Plan ahead,” says Tim Kosak, Consumer Lending Manager at Consumers Credit Union.

Watch our video, the second in the Consumers ConnectU July family budget series for more money-saving tips.

Already have kids? Check out these fun ways to teach them about money.

How to Teach Kids about Money: The First Video in Consumers ConnectU's July Family Budget Series

If you have children, how do you teach them about money management? “Let’s begin talking with kids about money and creating a healthy strategy,” invites Tim Kosak, Consumer Lending Manager at Consumers Credit Union.

Watch our video, the first in the Consumers ConnectU July family budget series to learn where to start.

Is Your Teen Having Trouble With Money? Teen Series Part II

What You Can Do To Help Your Teen.

We’re all human. Your children’s spending plans and habits will not be perfect any more than mine or yours. And your teen’s financial problems are just as real to them as they are to you. Periodically, hold discussions and make adjustments to allowances as it may be time to deal with unexpected situations and changes in family income and needs. Praise your teen when he or she is successful with their budget, and be careful not to scold (or nag as my teen calls it) when mistakes are made. (Easier said than done, we know!)

If your teen seems to be a master at manipulation, be strong and not add to their allowance if they overspend and need ‘more’ before the next “payday.” Discuss how they might keep from making the same mistake in the future with their money and outline some options.

One place to start is by having your teen record where every cent is spent…in writing. This can be a huge wake up call even for adults. Then have your teen identify which expenses they think would be the easiest to reduce. Ask them why (or why not) and keep the dialogue open.

Options to consider:

Needs vs. Wants. Show your teen how to determine needs and wants, and that they should be budgeted for accordingly (car insurance gets paid before video games, for example.)
Impulse Buying. If it seems like every time they go to the store they pay $20 more than they were expecting, they may need to find a system to control their impulses. Hopefully a budget will help with that.
Shortfalls. How can they increase income? Decrease expenses?

Making mistakes with money is part of the money management learning process. A $1 mistake early in life (rather than the cost of a paycheck later) hurts less and is easier to learn. While it’s difficult, we encourage you to let your teen make their own choices and mistakes as much as possible.

Turn Spending Money Into A Family Affair

If each family member has a hand in planning the budget, you can count on the cooperation of everyone to live within the budget. Parents should take the leadership role in planning the budgets, yet ensure everyone has a chance to express their needs and wants.

According to Accel, a source of FREE financial education for our members, your teen’s attitude towards money is more influenced by the way money is discussed in the home and how items of value are treated more than any other single factor.

For more financial tips for you and your children, visit http://www.accelfinancialservices.com/.

Source: Accel – Members Financial Counseling, our valued partner, and http://www.myliferoi.com/2009/10/budgeting-worksheet-for-teens/.