Budgets That Bend
When it comes to creating a workable spending plan, rigid parameters are out. In finances, as in life, flexibility is key.
Finance experts agree that having a family budget—deciding in advance how every dollar will get spent or saved each month—is key for fiscal well-being. But then the brakes on the car go. Your son needs braces. There’s an emergency trip to the vet. And by the end of the month, your bottom line is blown. Again.
When life is relatively stable, stick to a middle-of-the-road budget. Create one by mapping out a year of your family’s typical monthly expenses. Include occasional bills for things like property taxes, camps, school supplies and holiday gifts. Then add in a little more for those inevitable costs. Divide by 12. This is your normal operating budget. The amount in each category should guide your spending in an average month. Deposit any extra cash in a savings account to help cover those unexpected items in the future.
Have a little extra money from a bonus at work or from another windfall, take a little break and reward yourself. A good rule of thumb to use is to put a third of it toward paying off debt, a third into your savings account, and a third of it toward rewarding yourself. So go ahead and purchase that new pair of shoes you’ve been eyeing at the store or treat yourself to a nice dinner and a movie. You deserve it for sticking to your budget plan!
There are financial budgeting tools in Solidarity’s Online Banking Service that are free for our members. Just login to Online Banking and click on to My Finances.