Personal Finance Tools for Busy Parents
August 26, 2013The dog days of summer are here and it’s back to school time for millions across America. To a certain degree, I actually enjoy the routine of the school schedule. Like the changing of seasons, there is a sense of familiarity despite the unknowns of what may happen along the journey.
But I do not always enjoy the early morning struggle to help get myself and the kids out of bed and make sure they are dressed, well nourished and emotionally ready to tackle the challenges that come with growing up. Time management is essential in order to balance the competing priorities of work and family. The good news is there are a few ways to simplify your personal finances so you can spend more time with your family and less time worrying about your finances. Here are some quick and easy financial tools and resources that you can include in your weekly routine to help simplify the process of taking charge of your money:
Spend with a purpose. Budgeting stinks! It’s too time consuming. I’ve tried it in the past but I just couldn’t stick with it.
I’ve heard it all and have personally used numerous forms of procrastination as a technique to avoid creating a personal spending plan in my previous life as an occasional out-of-control spender. When it comes to monitoring and planning our spending, there are plenty of internal and external forces conspiring to make us want to avoid budgeting. That’s why online budgeting tools such as Mint and YNAB are so effective. With a little work upfront, you can set up an automated alert system to notify you if you are approaching spending limits or create bill reminders so you never miss or are surprised by an upcoming payment.
The key is to do more than just track your spending. You have to plan your spending for budgeting to work. As you can see with our Easy Spending Plan, savings, making extra payments toward debt, and other goals such as giving to others in need should come first in your spending plan (rather than waiting until the end of the month to save what’s left…if there is anything leftover). Just keep in mind the purpose of creating a budget or personal spending plan is not to frustrate you. Spending plans are meant to empower financial wellness behaviors.
Estimated amount of time: Expect to spend about 30-45 minutes setting things up and then plan about 10-15 minutes per week to monitor and track your progress. I’ve talked to parents who are spending that much time waiting in car lines or at practices per day.
Plan your meals in advance. Eating out has always been one of my favorite pastimes. It’s also a frequent budget buster and I admit that I’ve actually been in a restaurant and received an email from the kind folks at Mint reminding me that I’d exceeded my eating out budget for the month (note: spending plans only work if you follow them and I obviously hadn’t been monitoring ours that particular month). Well, I didn’t do the walk of shame back to the car before we placed our orders. But, it did provide a helpful reminder that we weren’t going out to eat the rest of the month.
A better approach to minimizing the costs of eating out is to create a plan of attack for meals before the week begins. I’ve heard good things about the eMeals service and there are some free meal planning sites such as Food on the Table and Say Mmm. My wife pays $5 extra to do her grocery shopping online, which not only saves time but it also saves money because we are planning our meals better (and spending less time with the cute little monsters tagging along in the store).
Meal planning doesn’t mean you have to completely eliminate going out to eat altogether. The whole purpose of the spending plan process is to weave in the fun stuff (within limits of course) to strike that fine balance between living in the moment and planning for the future. Sites like OutToEatWithKids.com allow parents to share tips for local restaurants offering kids-eat-free nights and BOGO deals. Groupon, LivingSocial, Restaurant.com and local coupon mailers are excellent ways to save money while dining out with a plan.
Estimated amount of time: It may take you anywhere between 30-45 minutes to plan your meals and order your groceries online the first time. You can save grocery orders to speed up the process for your next visit though. The combination of meal planning and dining out with coupons (and with a plan) can save both time and money so your family can focus on spending time together despite busy schedules.
Include irregular expenses into your spending plan. For many parents of school age children, those seemingly small expenses can become large amounts over the course of the academic year. Our school supplies and upfront classroom fees for supplies weren’t too bad but they were mysteriously left out of the budget (remember, it’s a process not perfection). When you add in other expenses related to field trips, birthday presents for friends, after-school activities, spending money for nights out with friends, and end-of-the-year teachers’ gifts, you can see the importance of creating a special line item in the budget for these expenses. You can use a planned spending account or envelope system to help monitor those small little expenses that can lead to big headaches without some proper planning.
Estimated amount of time: It takes less than a minute to create a special category for miscellaneous spending.
Put your savings (or debt payments) on auto pilot. The best way to avoid future debt problems and to pay for planned major purchases (e.g., house, car, vacations) is to set aside funds on a regular basis. I’ve worked with many people who make the mistake of raiding their emergency fund for lifestyle choices or “wants” that should have either been included in their spending plan or simply have been avoided altogether. An even more potentially devastating strategy is to finance these expenses using high interest credit card debt.
One method of avoiding this temptation is to build an emergency fund of at least 3-6 months worth of basic living expenses. An exception to this general rule is that if you have high interest consumer debt you should perhaps try to establish a starter emergency fund of around $1-2 thousand dollars and then focus on eliminating this problematic debt before you build up the rest of your emergency savings account. You can fund this account through direct deposits from your paycheck or automatic transfers from your day-to-day checking account. The same thing can easily be done to guarantee that you are eliminating debt as quickly as possible by automatically paying more than the minimum payment amounts on credit cards and high interest loans.
Estimated amount of time: At most, this may take around 10-15 minutes. After your automatic transfers are in place, you will just need another 10-15 minutes per month to track your progress and review your spending plan to see if you are able to increase how much you are saving.
Parents are busy and bound to get busier as the school year really gets warmed up. Fortunately, managing your personal finances doesn’t have to add stress to a fun but hectic situation. So rather than joining other parents out there struggling to keep up with life’s treadmill, strive to be different by using a spending plan that works and some small changes that can lead to significant savings of time and money.
Hey parents! Do you have money saving tips for back to school that you would like to share with others? Leave them in the comments section below.