Budgeting Key to Less Financial Stress for Working Moms

Motherhood is a beautiful phase in a woman’s life. However, it comes with a whole new set of challenges, one of them being increased expenses. According to a report released by USDA, it costs an average of $233,610 annually to take care of a child until the age of 17. This amount only covers the necessities.

Every mother desires to give her family a comfortable life and have enough left for an emergency. Sadly, if you are a low-income earner, this may seem like a dream. But, it may be done.

Budgeting is the solution. It enables you to stretch your income enough to cover all expenses by planning and controlling every penny spent.

The following are ways in which you can benefit from budgeting….

It Makes You a Wise Spender

With the account well loaded on payday or a few days after, it’s easy to indulge and ignore that money should last until the next paycheck.

In a survey conducted by Schwab, 64% of the respondents regretted spending on meals out, expensive clothing, and vacations. However, the respondents showed satisfaction spending on things such as tuition fees for their kids.

You are Better Armed for Emergencies

With a budget, you can set aside a certain amount each month in an emergency fund for unexpected occurrences. The account should be three to six month’s worth of your monthly expenses. It may take a while to build such a sizeable amount of savings, but it’s never going to happen if you don’t start now. Take baby steps.

Besides having an emergency fund, a credit card can come in handy during a crisis. But according to a study published in 2001, most people tend to be careless buyers when using their credit cards. When a real need arises, the credit card is past its limit.

You Can Plan Better for the Future

It is essential to plan for a better future for you and your kids, and budgeting makes it easier to make achievable investment plans.

No financial institution will fund your dreams if your bank statement is always zero and credit score below par. They need to prove that you are in control of your finances which can only happen by budgeting.

If you plan to save towards your investment, this needs lots of discipline, saving, and sacrifices. Your eye should always be on the goal.

Add Up Your Income

Two things make up a budget: income and expenses. Begin by calculating your net income from all sources including any freelance work you do. Net income means the amount that gets to your account or paycheck after all payroll deductions.

If it varies from month to month, for instance, those paid by commissions, use the lowest monthly estimate. Leave out any income that is inconsistent such as child support.

Round Up Your Spending

Write down every expense in the household. Check bank and credit card statements for the last three months to capture recurring costs.

Classify it into needs, wants, and debts. Needs are the necessities of the household such as food, house rent or mortgage, utility bills, childcare necessities, emergency savings, and insurance.

Capture all your debts both major and minor, including the soft $1,500 loans direct from your friends and colleagues. Your wants are the nice-to-haves such as eating out and gym membership.

Balance Your Budget

This is your moment of truth. Match up your income to your spending. Begin with the needs, if money is left over, match it up to your debts, and distribute any extra amount to your list of wants.

If your expenses exceed income, assess your spending plan and make practical adjustments. Can you negotiate a lower premium with your insurance provider? Is it possible to move to a cheaper neighborhood? Can you use public transport to work and save on fuel? Is it possible to reduce your debt repayment installments?

Be Accountable

Check your budget regularly, and compare actual spending to the initial spending plan. Confirm that all money from your account and credit cards is going to the right places.

If you notice a problem sticking to your budget, get help from another mom who is good at managing finances.

Take them as your accountability partner and let them coach you. Revisit your budget every few weeks together.

Find Avenues to Improve Your Budget

Now that you have a clear picture of your financial situation, try and make improvements. Do you have skills that you can use to make some extra money? Where can you shop groceries at a lower price?

Look for areas where your money is unnecessarily lost such as bank account charges. You can always find a cheaper bank. Get a rewards card, download shopping apps that give discounts and save you money.

Here are a few tips to help you budget effectively…

Write your budget down in a notebook or electronic device and carry it around with you. Having a place to refer to from time to time keeps your spending in check.
Surround yourself with the right people. It is always easier to stick to a goal if those around you share the same goals. If you hang around a spendthrift, there is a high likelihood that you will overspend.
If budgeting on your own gets too complicated, use an app or software designed for financial management.
Automate your savings. Most people save after spending which means little to no savings.
Shop on weekdays for the best product discounts and sales that can save you some money.
Be alert for yard sales, promotion codes and online coupons.
Cost compare before making any purchase. There could be a better deal out there.
Use weekends to prepare food for days when you are too tired to cook. Instead of ordering expensive take-out, a ready meal can be a savior.
Buy in bulk. It saves you some money and reduces the need to regularly go to the store where you are likely to engage in spontaneous purchases.

In conclusion, financial security is not just necessary for your peace of mind, but your children’s as well.