Monday, March 28, 2011

Have an Emergency Fund

Having an emergency fund is one of the smartest moves you can make, especially if you're a single income family. A good emergency fund can make the difference between coping financially with what life throws at you and having money stress adding to the problem.

If you're on a tight budget, as many stay at home moms are, it's hard to start an emergency fund. If at all possible, take $30-50 a month and put it into a special account that is just for emergencies. If you can't pay that much, even $10 a month will help.

This money must stay in an account that you can access easily, such as a basic savings account rather than a CD. You don't want to have a waiting period to get your money when you have an urgent need. At the same time, you don't want to access it casually, although that should be more a matter of self control.

How big your emergency fund should be depends on what you're likely to need it for. You'll need more of a stash if you know you have a major appliance getting ready to go, or if you car tends to need a lot of repairs or someone in the family has a lot of health issues. The equivalent of two months' salary may not be a bad idea, as that can cover a lot of ground.

Make sure that you're good about using your emergency fund only when you have to, and that you pay back into the fund as soon as possible. Better to have to pay back yourself than to pay back a credit card company with interest.

Sunday, March 27, 2011

What Can You Do About the Vicious Debt Cycle As a Stay at Home Mom?

Getting into debt can cause your family's finances to go into a vicious downward cycle, especially if you're a single income family. It's difficult for a stay at home mom to contribute directly to the finances of the family, but it can become necessary.

The first thing you should look at is why your family fell into debt in the first place. Could you have done anything to avoid it? How can you prepare for such a situation in the future?

Sometimes it was indeed completely out of your control. There's only so much a family can do to plan for medical emergencies, for example, and insurance isn't always enough.

Other times you could have planned better. Do you have a savings account to prepare for the car's next big breakdown? Is it time to save up for the next one?

If it's regular living expenses that are causing you to get further and further into debt, you have a real problem and you need to increase your income or cut way back to get out of it.

There are things many families can cut, such as cable television, eating out and other such things that are fun or nice to have, but not really necessities. It's worth taking a second look at such things to see if they will help you get back out of debt.

If the situation is more severe, then it can be time for you, as a stay at home mom, to find a way to bring in an income. That might mean finding a part time or even a full time job, depending on what you family needs to bring income up to meet your needs, combined with how childcare will be managed.

You may be able to bring in an income from home, but it is challenging. There are tons of work at home scams out there. There are legitimate work at home jobs available, but you should be careful and do your research before applying to any of them. Just be prepared for a long job hunt, as few get a work at home job quickly.

A home business is also an option, but it's risky. You shouldn't spend any money on a home business that you can't afford to risk. You have no idea when it will be profitable or even if it will be profitable. Plan carefully if you choose a home business of any sort and be prepared to work hard.

Whatever you do, don't let the debt cycle keep you spiraling downward. Do something about it. You can't just throw up your hands and say it's out of your control or that there's no solution. The solution may not be comfortable, but you need to find it. Your family will benefit in the long run.

Saturday, March 26, 2011

Be Sure to Teach Your Kids to Save Money

Nearly as important as your own saving habits is teaching your kids to save money. You should start as soon as possible, from their first allowance is ideal.

A simple way to start is with a piggy bank. You should move things up to a savings account at the bank eventually, but younger kids will love seeing the real money right there. Encourage them to occasionally count out the money and see what they've saved.

A goal is a great thing for a child to have for their savings. One of my children is saving up for a harp. She dreams of learning to play one, and knows what a lower range one for learning to really play costs.

Early on, you should insist on a certain percentage of allowance or other money earned or given being saved. Let them have a little fun - it's their money, after all, but guide them in making good purchasing decisions.

It's okay for your kids to make occasional mistakes in how they spend their money. It can be a really good lesson. They're going to have conflicting wants at times, and you can use this to help them learn that no one gets everything they want in life, but saving up for the things they want most can be worthwhile.

Friday, March 25, 2011

Are You Patient Enough to Save Money?

Building up savings is hard, especially if you're a stay at home mom trying to stretch your family's single income. It's important that you do save money, however, so that you're ready for emergencies. It's just hard to be patient when it seems as though it's two steps forward, one back on your savings.

While you should have a goal for how much money you'll save up for your family, as well as one for how long it will take you, don't let frustration stop you when your savings just aren't working out. That's just the way things go.

You get some savings and then a major car repair wipes them out. That's rough, but all too common. Give a sigh and be grateful that you had savings to help out with the repair. With any luck, they'll have been enough to keep you from putting the repair on a credit card and having to pay for it even longer.

Patience can help you save money too. Be  patient in your purchases. When you think you want to buy something you don't absolutely need, stop and give it some thought. At least an hour, but if you can go a day or a week without making the purchase you can figure out if it was a matter of impulse, a want worth indulging or a need you just discovered. That will tell you if you should spend the money or direct it toward building your savings.

The most difficult part of patience is when you don't get cooperation in your savings goals from the rest of your family. When your husband disrupts your plans by spending money you had intended to save, of course it's difficult. That's one of those things you need to talk out together, so that you can each spend money without causing the other to resent what has been spent. If you aren't getting cooperation, find a way to get it. This isn't always easy, but it is necessary.

Thursday, March 24, 2011

Quick Budget Tips for Stay at Home Moms

One of the most important things for most stay at home moms is to keep her family on budget. Life's challenging enough as a one income family - you don't need things getting out of control with credit card debt or running out of money for monthly expenses before the end of the month. Keeping the family finances running smoothly is usually a job left to the stay at home mom.

These are a few tips to help you keep your budget in order. If you have any others, please share them in the comment area.

1. Plan ahead.

Know what you can afford to spend each month. You must have rent/mortgage payments budgeted, car payments, any credit card payments, untilities, food and so forth. Once the monthly necessities are taken care of, you can divide any extra into savings, entertainment and other optional areas.

Don't forget to consider needs that may not pop up every month, such as buying new clothes or paying for activities for the kids. How much you can spend on these areas depends on how much money your family can afford for them, but planning ahead will make it easier.

2. Know where you can save money.

Most stay at home moms quickly develop an eye for a bargain. Thrift stores are your friends. So are well chosen sales and coupons. You don't want to be buying things you wouldn't have bought otherwise, but a good sale or coupon may motivate you to stock up on things you wouldn't keep around otherwise.

3. Know what to sacrifice.

Being a stay at home mom usually means you're going to be a one income family. That's rough and usually means you need to make sacrifices, such as fewer family vacations and fewer trendy clothes. That's okay, as what your family gains should be well worth the sacrifice.

You can usually cut things such as cable television service with minimal pain. The kids won't like it at first, but get them used to going outside and playing (a much healthier habit) and they'll soon miss it less. So will you.