Family FinancesSome basic ideas to help your children learn about money management from an expert – YOUI!

Setting up a Family Budget

A budget tells us what we can’t afford, but it doesn’t keep us from buying it.

William Feather

Objective:

To have more ‘money’ than month!!

Monthly Income

less

Monthly Expenses

Income Fixed Variable

Do: Bank the extra Don’t: Depend upon it always being there

SAVE FIRST!!! Goal: 6-8 months of income

Expenses Taxes first!!

Plan ahead to ensure the correct amount is being withheld from your paycheck

Overpaying or Underpaying – does either make sense?

Expenses – ‘typical’ When developing your budget, list the

regular monthly expense categories and their anticipated amounts. Mortgage/Rent Utilities/Phone(s) Insurances – medical/life/auto/home Food Gasoline Car Payment

Expenses - Others Tithes/donations Gift-giving Entertainment School Fees Clothing/dry cleaning Home maintenance Vacations

Expenses – the dreaded emergency . . .

Auto trouble Appliance issues School fees – sports/band/clubs Flooded basement What’s your worst unexpected expense?

The Balancing Act Total your regular income (less savings)

Subtract total ‘typical’ expenses Money left? (Yeah!)

No? – Re-evaluate

Subtract other expenses. Money left? (Yeah!)

Decide how to utilize the extra . . . Saving is ALWAYS a good idea!!

What about the credit cards? First (and only) rule:

Avoid using as a revolving credit Pay the total balance due EVERY MONTH!!

Currently owe on one (or more) credit cards?

$1000 + $150(15% interest) = $1150 / $100 per month – Paid off in 12 months

Balance $1000 $2000 $3000 $4000 $5000 Interest Rate

Years to Pay off if only paying a 10% minimum monthly payment1

10% 3.0 3.6 3.9 4.2 4.311% 3.0 3.6 3.9 4.2 4.412% 3.0 3.6 4.0 4.3 4.413% 3.0 3.7 4.0 4.3 4.514% 3.1 3.7 4.0 4.3 4.515% 3.1 3.7 4.1 4.3 4.516% 3.1 3.8 4.1 4.3 4.617% 3.1 3.8 4.2 4.4 4.618% 3.2 3.8 4.2 4.4 4.7

Kids and Money

Schools assist children in understanding the numerical value of money.

Parents are responsible for teaching children the financial value of money.

Talking with them is the first, and most important step!

WANT vs. NEED

We all NEED to eat.

The WANT comes in when determining what it is we eat.

The same is true with shoes, clothing entertainment, etc.

Children at the grocery store Encourage your child to be savvy

shoppers Allow them to make decisions about

what foods/brands to buy, letting them determine how to spend the money they save

Do a blind taste test with different products to determine if price vs. value

Children and Utilities Have a family discussion on the utility

costs of natural gas, electricity and water.

Seek input on how to reduce the amount used of each resource

Reward child with a portion of the savings.

(Children are more likely to turn off the lights if they see the positive outcome of doing so!)

Family Entertainment Doesn’t have to cost a thing!

Community pools Museums Library Parks Local concerts/festivals Family game night Movie night (at home)

Kids and Family Entertainment Discuss the monthly family

entertainment budget

Allow your child/children to decide how to spend this money. Encourage them to consider saving some (or all of it) for a bigger type of entertainment: amusement park/water park/sporting event

Early learning pays off . . . When a child learns how to manage

money at a young age, it will be much easy to manage larger amounts of money as they grow older First car College First Home

Your money management ideas for children!