Being able to manage money well is a vital role of a good dad. Whether or not you live with mom or your children, here are 7 things you know and actions to take that will help you better manage your own or your family's money.
- It costs a lot to raise a child.
- Avoid debt.
- Create and stick to a spending plan (budget).
- Track costs.
- Budget to meet needs rather than wants.
- Adjust your spending plan as needed.
- Get help if you need it.
It costs nearly $12,000 a year for a two-parent family - with a combined income of $61,530 or less - to raise their first child. That means it will cost them $216,000 to raise that child through age of 18! The largest cost is housing, then childcare and education, the food.
Too much debt can destroy you or your family. Pay off credit card balances in full and don't let debt build. It's way too easy for debt to get out of hand. Good dads are careful when to take on large debts, like those for a car and home. Good dads take on those debts only when they or their family can afford them.
This plan is the most vital thing you can do to manage your own family's money. If you live with mom or other family members (e.g. your parents), get their input. Their input will help them buy into the budget and ensure they help you stick to it. Use the worksheet at the end of this post to create your own family's spending plan.
Before you can create and stick to a spending plan, you have to know where the money goes. Before you create the plan, track spending for at least a month to six weeks. Use receipts to see where the money goes. Add up how much money goes to major (e.g. food) and minor (e.g. pet care) areas. Don't leave anything out. You might find some costs you can cut right away.
To make your spending plan work, it must meet your own or your family's needs. If you need $200 per month for food, include that much for food. Otherwise, you'll have to pull from other spending needs and come up shorts on meeting those needs. If you have debt, include money to get rid of the debt. You'll have to make some tough calls on where to spend money. Those calls will be even tougher if your or your family's income can't meet all of the needs. you might have to give up spending money on things you or your family wants but doesn't need.
A spending plan is a work in progress. Learn as you go. If costs exceed income, you only have two options. You can cut costs or increase income. Make the tough calls required to land on a spending plan that works.
There are counselors who can help you for free to manage your own or your family's money. they can show you how to create a spending plan and manage debt. Money Management International provides free help 24 hours a day, 7 days a week. Visit www.moneymanagement.org for details or call them toll-free at 1-866-889-9347.
Please use the links below to download the spending plan worksheets