Money Minded Families by Stephanie W. Mackara

Author:Stephanie W. Mackara [Mackara, Stephanie W.]
Language: eng
Format: epub
ISBN: 9781119636007
Publisher: Wiley
Published: 2020-04-21T00:00:00+00:00

The Ins and Outs of Budgeting

In the previous chapter we discussed Kakebo, the idea that we start with what we will save each month and then evaluate our success. Think of budgeting as a tool for creating awareness. Any budget or spending survey will include these two simple categories: in and out. As we get older these categories become a bit more granular, but at any age, these two categories will work. It's all about what's coming in and what's going out. It's that simple.

Let's focus on the in first.

When kids are young, the ins are generally minimal and include things like gifts and allowances, if there are any. As your child gets older, the ins may also include things like dividends or interest on their savings accounts. For most people who enter the workforce, salary, bonus, and commissions become the primary source of ins. Financial responsibility means your ins should always be more than your outs!

Similarly, outs begin very simply and then grow exponentially as we get older. The challenge for most people is that the possibilities for ins are much more limited than the seemingly endless outs. When kids are young, the outs are simple, limited to things like entertainment, movies, jump zones, or discretionary items like toys, iPads, and so forth. As we grow older and responsible for ourselves, the outs grow into basic needs such as clothing, food, automobiles, housing, and insurance. Anything that costs money within the month is an out. This includes savings.

When children are younger, they should have a good handle, at least annually, on their personal balance sheet (PBS). This includes ins, outs, and balances in any “bank,” whether piggybank or otherwise. This will help them plan. Just keep in mind, this isn't meant to be perfect or a time hog. It is simply meant to paint a picture of your monthly or annual spending and savings, giving you and your children clarity and providing areas for improvement.

Again, technology makes our lives a bit easier when it comes to tracking our spending, not just facilitating our spending. Once your child begins to use a debit card, simply review their account statements to help them track spending or link to an online tracking tool which will help to categorize spending and make your child aware of their good and bad spending habits.

Download

Copyright Disclaimer:
This site does not store any files on its server. We only index and link to content provided by other sites. Please contact the content providers to delete copyright contents if any and email us, we'll remove relevant links or contents immediately.