 |
| |
|
|
|
|
Advice Team Responses
| |
Budgeting: Advice |
|
| |
More Advice Team |
|
| |
| |
I am a bookkeeper who does a good job at work, but my personal finances are a mess. I’m so ashamed. Why can’t I handle my own money when I do such a good job at work? - Brooke
|
|
| |
|
Dear Brooke,
Financial problems affect all types of people—even bookkeepers. Remember your personal finances are very different than what you handle at work.
For one thing, your personal finances are just that—personal. At work, you have little emotional investment in keeping the ledger. But at home, every time you pull out your checkbook, out comes a tangle of dreams, habits, security issues, etc. that cloud the transaction.
In addition, you are trained to do your job, but you probably had little training in personal budgeting. Few people do. Instead, many of us learn from the school of hard knocks.
Fortunately, there is help available. MMI has a lot of great online resources such as free webinars and calculators.
Best Wishes,
The Advice Team |
|
| |
| |
I am a mother of three young children. I would like to start teaching them about using money but an not sure where to start. What suggestion do you have? -Mary |
|
| |
|
Dear Mary,
I’m so glad you asked! It is never too early to teach your children about money.
You can start by teaching your children the difference between needs and wants. You can do this during your usual trips to the store. You’ll be so proud the first time they tell you they “want” a toy rather than the usual “I need” routine.
Also start involving the children in the family’s finances. That doesn’t mean you have to divulge every detail, but just enough so they understand that money doesn’t grow on trees. Remember to teach them that the money has to cover three things: sharing, saving and spending.
Next, allow your children to make spending choices of their own. Giving an allowance works for some. However, if you expect your children to be contributing members of the family, you may not want to tie allowance into everyday chores.
Again, thanks for asking. It is so much better for them to learn basic principles now, while their mistakes have few ramifications.
The Advice Team
|
|
| |
| |
I am an 8th grade teacher. I was wondering if you offer information I can use for our upcoming unit on credit. -Amy |
|
| |
|
Amy,
We would love to help. The Centers for Financial Education is a nonprofit, educational division of Money Management International. They offer financial literacy training to every aspect of the local community. They also develop curricula and materials covering a full range of financial management skills. For more information, visit www.crediteducation.org.
The Advice Team
|
|
| |
| |
I am recently married and my husband and I are wondering what would be the best thing to do with the money gifts we have received. We have received $4,200 and are vacillating between just saving that sum or paying off our credit cards and then begin saving. I have about a $4,000 balance on my credit card with 16 percent interest and he has $2,000 with 19 percent interest. What do you think would be our best bet? Thank you. -Michele |
|
| |
|
Michele,
You and your husband are off to a great start! Be proud that you are considering how best to utilize your money instead of running out and spending it on frivolous items.
While it is important to pay down your debts, it is also important to have an emergency savings fund. However, the interest on your savings account won’t earn you anywhere near the 16% and 19% you are paying on the credit card debt. If I were you, I’d pay down a large portion of the debt and immediately begin to make a serious effort at establishing an emergency savings account. Three months income is the minimum this account should hold.
Best wishes and congratulations,
Susan
|
|
| |
| |
I don't know why, but lately the only way I can make it to the end of the month is to ask for an advance on my paycheck. And now my boss says I can't take any more advances. What am I supposed to do now? -Sara |
|
| |
|
Dear Sara,
Unfortunately, it is impossible to answer your question without understanding your total financial picture. The reason you are running out of money could be for any number of reasons. At MMI, we counsel thousands of people in your situation every month. Each client is unique and so is his or her situation and solution.
The good news is that you are already on the right track by asking for help. I recommend taking that next step by sitting down with a certified credit counselor. Two heads are better than one!
Best wishes,
Susan |
|
| |
| |
I have a very basic budgeting question: When I budget $50 monthly for doctors' visits and do not visit a doctor, what do I do with that extra money? It's likely that in a few months I will need that much or more, and if it's spent, I'm stuck. However, it's hard to see money in the account and NOT spend it! This problem exists equally with utility bills, etc. -Pat |
|
| |
|
Pat,
Here is how I suggest you handle this budgeting situation:
Step 1: List all those expenses (like medical) that come up during the year but don't happen every month. For example's sake, I'll use medical, Christmas and car upkeep.
Step 2: Estimate how much you will spend for each expense over the next year, i.e. medical $250, Christmas $300 and car upkeep $300. Now divide each total by 12. Medical $20, Christmas $25 and car $25. Those occasional expenses are now monthly expenses.
Step 3: Add the monthly totals for a grand total. This total is your monthly deposit to your newly opened separate savings account. My total is $70.
Step 4: On the front page of the spiral notebook write Monthly Summary Deposit Record. Underneath on the first line write the date and the total deposit for that month. i.e: June, Deposit $70.
Step 5: At the top of page two write Medical. Underneath on the first line write the date and the monthly payment to that account. Example: June, Deposit $20. Repeat the procedure page by page until the total deposit is accounted for.
Step 6: Make the deposit every month and assign the monies to the proper accounts.
Three months pass. Time for an oil change. Open the notebook to Car Upkeep. There's the money. Withdraw what you need, subtracting the amount from both the total deposit and the Car Upkeep Account.
For utilities ask the utilities companies for a balanced billing plan. Or average your bills and set the difference aside in your special account.
The Advice Team
|
|
| |
| |
Is $200 per month spending realistic? When I created our budget with debt management in mind I budgeted $200 per month spending money ($120 for my husband and $80 for me). We use this money for fun stuff that doesn't include eating out, necessities, or one time events like concerts or plays. Those are all things that I have budgeted seperately. My husband constantly tells me that our "fun" money isn't enough to make it through the month. Am I being unrealistic to only budget $200 for "fun" money, and is it unrealistic of me to expect him to buy things like cigarrettes with his "fun" money? -Pam
|
|
| |
|
Pam,
Only you can determine how much money you need for "fun." But maybe this will help. Here is a "Sample Spending Plan" that we promote on how you should allocate you money.
Housing (20-35%)
Personal Care (2-4%)
Food (15-30%)
Insurance (4-6%)
Personal Debt (20% max)
Health (2-8%)
Transportation (6-20%)
Utilities (4-7%)
Clothing (3-10%)
Misc. Items (1-4%)
Savings (10% min)
It may seem hard to break old spending habits, but encourage your husband to try it for a while. Believe it or not, getting out of debt and seeing those rewards is also really fun!
Best of luck,
The Advice Team |
|
| |
| |
My husband and I just bought a new house and new car,we also have credit card bills. We got in way over our heads and our bills exceed our income what should we do? -Jessica
|
|
| |
|
Jessica,
Congratulations on the purchase of your new home. That is a big transition to make and maybe things aren't as bad as they seem. Perhaps you haven't put enough time and effort into creating a new, workable spending plan? Many consumers fall into the trap of continuing to live their same lives even though their situation has changed.
To create a plan, sit down with your husband and figure out where you are financially by writing down all income, debts and living expenses. Then, together, determine your financial goals. For example, a short term goal might be to pay down your credit card debt. Finally, revisit your current financial situation and determine where you need to make changes in order to reach your goals. For example, you may determine that you need more affordable transportation so that you can begin saving for retirement.
I sincerely wish you both the best of luck,
The Advice Team |
|
|
|
|
|
