HomeMoney matters cause a lot of stress for a lot of moms. This week we'll start at the beginning - getting a clear picture of your current financial situation.
How much do you know about your household money? See if you can answer each of these questions:
• How much comes in each month?
• How much are you (or your entire family) spending?
• Do you have anything left over?
• What kind of savings or retirement plans do you have?
• Do you know how much money is in your checking account right now?
• How much are you spending on credit card interest?
• And the follow-up question: how much credit card debt, exactly, are you carrying?
Addressing such questions can be unpleasant, and even scary. Many women (and families) are unwilling to look at their money situation, because they don't yet feel prepared to take action. But consider this: the situation will be the same whether you KNOW the bottom line numbers or not. However, if you have all the facts you can make better-informed decisions about your money, even if you choose not to make any changes right now.
Where do you start? It depends on your particular challenges;
• If you just need a place to begin, write out a basic monthly "financial statement" that includes income and regular expenses such as mortgage or rent, car payments, utilities and credit card payments. It helps just to see what you have and what you spend consistently.
• If credit cards are your biggest issue, figure out exactly how much you owe. If you aren't paying these bills off each month, look at the interest rate on each; anything you can do to lower the interest you're paying can save you a lot of money over time.
• If it would help you to know where your day to day money goes, you could look at your cash flow. To do this, keep a notepad with you and jot down each purchase you make over a time span of two or three days (or a week if you're ambitious). You might be amazed to see how much the small purchases add up.
• If balancing your checkbook gives you a headache, software such as Quicken or Microsoft Money can make it a snap, and give you monthly reports about cash flow, spending habits and debt.
• You can start ANYWHERE - just so you're doing something to increase your knowledge. Choose any one of the questions at the top, and figure out the answer.
Your assignment:
Pick a way to increase your knowledge about your household money situation: lay out a basic budget for yourself, balance your checking account, take a close look at credit card balances and interest rates, or figure out more about your daily spending habits.
Ready to take the assignment? Want to talk about this? Share your ideas and thoughts at M.O.M. Balance forum.
Want to read more from Karen Harvey's M.O.M. Balance column? Click here.
