Who spent way more than you wanted to for the Holidays? Yep, that’s me raising both my hands. I’m guilty. Holiday Finances way out of control.
Look, it happens even to the best of us. So there’s no point in beating ourselves up over it, right?
December was a bust in our house, for sure. Heck, all of 2020 was a bust, really. But let’s not dwell on it for too long. There’s no good that will come from that.
Instead, acknowledge it and then make a plan.
I’m all about coming up with solutions and getting into action to make positive changes.
So if you’re telling yourself, “This is it, I need to get my spending in check,” or “It’s a new year and I’m ready to get back on the bandwagon”, then you’re going to want to take action on these items, today! That way you can start the new year off on the right track.
8 simple actions you can take today to get your finances under control
Unsubscribe From All Retail Emails
If you’re like me, your inbox gets filled with emails from every company you’ve ever bought anything from. And sometimes, even from places where you just browsed (I know! It’s so creepy how they do that.)
Just go on and scroll to the bottom of that email. All marketing emails like this are required to offer you the option to “Unsubscribe”. Hit that button, I promise you won’t miss anything important.
Delete All Shopping Apps From Your Phone
There are so many apps that make it easier for us to shop online (like Amazon, Target, Groupon, and more). But, if we want to shop less, we don’t want those apps staring at us, taunting us, every time we check out phones. Go ahead and delete them. You’ll thank me later.
Delete All Saved Cards on Websites
Sure, saving your card info on a website is a convenience, but we don’t want to make shopping any easier, right? If you delete that saved card info, it won’t be so easy to buy.
Add Items to Your Wishlist Instead of Add to Cart
If you’re window shopping on Amazon, you can opt to add items you’re looking at to a wishlist instead of to your cart. This will help you to take some time to think about the item and if you really need it before you purchase.
Wait a Minimum of 24 Hours
Before you buy anything, wait. Then, after 24 hours, ask yourself if you really need to buy it. You’ll be amazed how this simple step will affect your spending.
Find an Accountability Partner
Find someone that can help you stay in check. If you have a weak moment, his/her image will suddenly appear in your mind and force you to have second thoughts about spending. You can help each other get your finances on track!
Check Your Emotions Before Buying
Make sure you’re not shopping just to fill an emotional void, because you’re bored, to feel a rush of endorphins, or to distract yourself. Ask yourself, “Am I buying out of boredom, anxiety, frustrations, sadness?”
Try a No Spend Day
Challenge yourself and designate no spend days. Find some friends and even do a group no spend day challenge to make it fun!
I know a lot of these are going to be hard to do at first but you can do it. Imagine all the money you will save that can go towards your next family vacation? Just pick one and tell me below which one you went with. I will help cheer you on!
For more tips on getting your finances under control, check out our Free Family Monthly Budget Action Plan. This Monthly Budgeting Action Plan, offers step-by-step instructions to guide you through the exact steps you need to take to set up your own family budgeting plan.
I have a vision. A vision that raising financially confident kids will be an easy-to-do, everyday family routine. Not just the savings and investing portion but also how to manage and make smarter decisions around money in our day-to-day lives.
My dream is that one day, these important money lessons may even be included as a required class in High Schools and Elementary Schools. But we don’t need to wait for that to happen to begin growing financially confident kids. We can start today by teaching our own kids.
I know that in order to make that happen, I need to help as many parents get their household finances in order first. Let’s do this. Not just for our own future but for our kids and their kid’s kids.
Here are 6 things I believe financially confident kids should know. Plus a few tips for how you can begin teaching these lessons to your kids:
What’s a Budget?
Make sure your kids know exactly what a budget is.
Here is a super kid friendly definition for budgeting. Keeping track of all the money you got and how much of it was used to pay for different things so you know what you have left over.
Including your kids in your family budget planning is a great way to teach them what it takes to run a household at an early age and it’s a lesson they won’t ever forget.
We recommend including your kids in budget decisions starting at a young age, and inviting them to your family money meetings as soon as they are old enough to grasp what is going on.
Since our kids were 4 and 6 years old, we’ve had them use piggy banks to start teaching them the concept of earning and saving their money to pay for things. Now that they are 10 and 12, we’ve been working on introducing the concept of budgeting to them. Kids that grow up in a home where money is discussed openly and honestly, become more conscious and responsible with their own spending and expenses.
How to be Smart with Credit Cards
It’s so easy to accrue extensive credit card debt if you don’t fully understand how they work. I’m guilty myself. At one point, I had over 100K built up. But it’s important to teach kids that when they choose to buy now, pay later – they’re really paying more later due to interest.
Here is a kid friendly definition of credit. When you buy things at the store now and pay for it later.
And a kid friendly definition of interest. Extra money you have to pay when you don’t pay the bills on time.
Credit cards aren’t all bad, you can use them smartly – but children need to be taught how to.
Needs vs. Wants
Teaching our kids the difference between a want and a need can be so difficult. While it is tricky to explain to littles and sometimes confusing for them to work out in their minds, it is so important.
Here is a kid friendly definition of need. Things to help you live and grow safely, like clothes, shoes, food, shelter, electricity
And a kid friendly definition of want. Things that helps make life more easy and fun like toys, iPads, and vacations.
Bills, don’t we all wish we lived a life without them! But that’s not the case, there will always be bills. Financially confident kids need to learn what bills are, how they work, and how they pay them.
Here’s a kid friendly definition of bills. The money you have to pay or owe for different things you use in the house or buy at the store.
Make sure that kids know bills come in lots of different shapes and sizes. The may each have different payment schedules (some bills might be monthly, some quarterly, and some yearly), and they may need to be paid differently (mailed in, in person, or paid electronically – some are even taken directly out of paychecks or accounts).
When talking about bills, you’ll likely also stumble into a conversation about late fees. This is what happens when bills aren’t paid on time. It’s also how debt can really start to pile on quickly.
You could explain late fees to your kids by using an example of not cleaning their room each week. If they miss one week, there’s even more to clean up the next week – plus a consequence for not cleaning up in the first place.
Here is a kid friendly definition of late fees. A charge you pay when they fail to make a payment on time.
Living Below Your Means
Another important lesson that will help to make your kids financially confident is teaching them to live below their means. It’s best to teach this lesson by example by showing your kids how you budget, where your money goes, and how much you have left after paying bills and spending. You can even take it a step further by establishing a chore and money system in your home and put your child in charge of his/her own finances.
Are you looking for support in getting your finances in order so you can set a better example for your kids and get them off on the right track? I’d love to help you out! Grab our FREE Family Chore and Money System Guideand get your family started today!
2020 was unlike any other year we’ve ever lived through. There was a global pandemic, calls for social change, unprecedented unemployment, virtual learning, and a chaotic election. It was a year of learning, change, and growth for many but also grief and struggle. One lesson I know many people are taking with them from 2020 is the need to be prepared for the unexpected.
With such a crazy year, I know many people who struggled through the holiday season financially. They weren’t financially prepared for Christmas.
I have a question for you and it might be a bit personal – how much did you spend on Christmas 2020? Were you okay with the amount you spent? Or did you spend way more than you had planned?
Have you taken the time to add up all of the gifts, purchases, decorations, and foods you bought for Christmas 2020? If not, go grab a piece of paper and figure it out! Find the exact number (or as close to it as you can get) and take a good hard look at that number. Then ask yourself – am I happy with this amount? Was I prepared to spend this amount?
If you’re not happy with what you spent and you feel like you don’t even know how you paid for it all (or you do know how you paid for it – on credit – and you’re going to be paying it off for months), I have some news for you.
NOW is the best time to start planning for NEXT Christmas.
3 Steps to Make Sure You’re Financially Prepared for Christmas 2021!
Take the Number You Just Wrote Down and Adjust it Realistically.
So, I just asked you to find out exactly what you spent on Christmas 2020. Whether you paid for Christmas in cash or on credit, this number gives you a real hard look at exactly how much you spent. Take it in and get comfortable with it. Then, consider where you are at currently and make adjustments based on that.
If you went way over and feel buried in credit card bills, lower that number. If you’re pleasantly surprised with how much you spent and you stayed right within your budget, keep it the same or bump it up a bit.
This type of assessment, and reflection – after any major event or purchase, is really important to your realistic budget planning.
Divide by 10, 11, or 12 – You Pick!
When will you start shopping for holiday gifts and begin decorating your home? Considering this will help you to determine when you’ll need your fund built up by. If you start shopping in July, you’ll want to have a good amount in your fund after only 6 months. If you wait until after Thanksgiving to get started, you could go with 11 months.
Set up Your Christmas 2021 Sinking Fund – Either Digital or Cash Envelopes
Now that you know the numbers you’re working with, get your Christmas 2021 sinking fund set up! That way, you’ll be financially prepared for Christmas! A sinking fund is a fund that you set aside each month to go towards a specific expense, savings, or payment. In this case, that expense is Christmas 2021. To set this up, you can either use a digital budgeting app like YNAB or cash envelopes.
YNAB, aka You Need A Budget, is personal budgeting software and it’s available for Windows, Mac, and iOS. Setting up a sinking fund on YNAB is super simple. It’s just a matter of creating the fund and then specifying how much you’ll add to it each month. You’ve already done that math, so you’re set.
If digital is not your thing, you can instead use cash envelopes. Simply grab an envelope, label it Christmas 2021 and add the specific amount to that envelope each month.
Being proactive or planning ahead for Christmas shopping is such a huge relief! I used to always dread having to go Christmas shopping because I knew that meant I needed to spend money I didn’t have, but now, it doesn’t even cross my mind. I go into Christmas shopping with my mind at ease, which makes it a much more enjoyable experience.
If you’re ready for a fresh start in 2021 and you’re looking to take off on the right foot, come and join my 5 Day Family Budgeting Challenge starting next week! In the challenge, we’ll go through my 5 step process for getting a simple family budget set up that will work for you and your family. Join the 5 Day Family Budgeting Challenge right here!
Do you know what sinking funds are? If you do, great! If you don’t I’m about to get you hooked. They are LIFE CHANGING. They will have a huge impact on your budgeting and they are super simple to get started.
As someone who’s been debt free for over 7 years now, I can say that sinking funds have been a major habit that has helped our family stay on track and be prepared for unexpected expenses.
What are sinking funds
A sinking fund is a fund that you set aside each month to go towards a specific expense, savings, or payment. Primarily it’s money to allocate towards a specific savings goal. So instead of a generic savings account, these are mini saving funds with a purpose or saving with intention. There is usually a predetermined amount that is added to the sinking fund each month. Businesses can have sinking funds, but that’s not what we’re here to talk about, we’re going to be focusing on sinking funds in a family budget.
6 Sinking Funds Every Family Should Totally Have
We all know Christmas comes every year, but many people will wait until October or November to begin thinking about how they’re going to pay for those Christmas gifts. But, what if, you started preparing for that as early as January. Each month, you put a little bit of money into that Christmas sinking fund and by the time December rolls around, you’ve got the money set aside and you no longer need to stress about how to pay for the Christmas shopping.
Some bills aren’t due every month, like auto insurance, yearly memberships, and homeowners insurance. Instead you might only need to pay them once a year. It’s easy to forget to set aside money to pay these bills. That’s why it’s perfect to set up a sinking fund for each of these. Simply divide the bill amount by 12 and add that amount to the fund each month. That way, when the bill comes up, you aren’t hit hard that month.
These also come up every year and we rarely think to add them into our monthly budget. Why not set up a sinking fund. That way, when a birthday does come up, you have money in the fund ready to be spent on the gift!
Holiday decorations and food
Oftentimes when we go to family parties or holiday celebrations, it’s like a potluck, we all bring something. If we’re hosting, we also have to spend on the decorations, too. The expense can sometimes be a big hit and I don’t always want it to come out of my grocery budget. Instead, I set up a sinking fund to cover those expenses when they come up.
Create a separate sinking fund to add some money into a vacation fund. That way, when you get to the amount you need, you can pay for your vacation upfront instead of charging and then being left with bills to pay once you return.
Home and car emergencies
And you can’t forget those unexpected emergencies. Things break down all the time. Kids get injured and sick all the time. Those bills can be a major hit to your budget if you’re not prepared. That’s why it’s great to have a sinking fund set aside specifically for emergencies.
Can I set it up digitally?
Yes! It is so easy to set up your sinking funds digitally. I use an app called YNAB (You Need a Budget). It’s personal budgeting software and it’s available for Windows, Mac, and iOS. You can set up as many or as few as you’d like and you can make them as specific as you’d like. You can start with one or two, like a vacation and Christmas, and then grow from there. Setting up your sinking funds on an app is super simple.
How to set it up with cash envelopes
If digital is not your thing, you can instead use cash envelopes. Take out some cash and put it into an envelope. You can do this two different ways. The first way works like this: if you have five different sinking funds, take five envelopes, label them, and add the specific amount to that envelope each month. If you don’t want to have multiple envelopes around, you can use one envelope and track how much is in the envelope for each fund on the front of the envelope. Keep it all itemized right on the front of the envelope for convenience. This might be a bit easier than having multiple envelopes.
For more tips on setting up your budget, check out our Free Family Monthly Action Plan. This Monthly Budgeting Action Plan, offers step-by-step instructions to guide you through the exact steps you need to take to set up your own family budgeting plan.
One thing I know for sure – and you’ll hear me say over and over again is this: It’s never too early to start talking to your kids about money! I try to find spontaneous moments in my daily life where I can share with my kids about money. But, I try to teach them about money in a more structured way, too.
One way my husband and I do this is by holding Family Money Meetings. These meetings are designed for us to discuss and explain to our kids the process of earning money, spending money, and saving money.
What is a Family Money Meeting and why should we have one?
We had our very first family money meeting when we first introduced our kids to our chore and money system. The meeting was to discuss the new process and to make sure everyone was on the same page. We also wanted to get them excited about it.
We encouraged them to propose their own ideas or input into the new process and you can do the same with your kids. The more involved they are, the more likely they are to stick to the plan. If their ideas make sense and you can accommodate it, add it.
We now incorporate these Family Money Meetings into our schedule every few months to check in on the process and make sure everything is still working for everyone. We will also call a meeting sooner if there is an issue that needs to be addressed or a system that needs to be changed.
Here are 5 things we discuss at our Family Money Meeting
The first thing we need to discuss with our kids in a Family Money Meeting are the rules! The kids need to know what is expected of them. This should be very clear, down to the days things will be done and to what standard they will be completed. The more clear you can be about expectations, the more likely your kids will be successful.
Next, you need to discuss consequences. Discuss ramifications for things not being done, i.e. lose money and screen time. Be clear to explain that in the real world, people get fired if they don’t do their jobs.
For this topic, you want to let them know exactly what day each week they will be paid. Also, discuss what will happen each payday (see below).
After you talk to your kids about their pay day, you want to make sure they have a clear plan for what they will do with that money once they are paid. We suggest setting your kids up with three money banks: one for savings, one for spending, and one for sharing. You want to explain the three types of money banks they will have and talk about how they are different.
Once they receive their pay, they will be expected to divide up their pay into the 3 money bins. I leave it up to them to decide where their money goes but the only thing I do reinforce is that something has to go into each bin. You could make it so that it’s a standard % like 40/40/20 or any variation–really it’s up to you. Keep in mind that you will want to pay them in denominations that would be easy for them to divide, whether it’s quarters or bills.
Next, you’ll want to talk to your kids about keeping track of how much money they have in each bank. Explain to them that each time they add in or take out money, they will need to track it. This is so they will always know how much money they really have. Then they can properly decide whether they can afford that new toy or not.
In the beginning and depending on their age, you will be more involved with helping them figure this out or be supervising. This is to make sure they understand what to do.
Staying motivated through these hard times can be difficult. Especially when you’re working towards financial goals. This year has been very hard, particularly financially, for many families. I think we can all agree, it’s been quite a year.
I know that staying motivated to reach your financial goals, whatever they are – buying a home, getting out of debt, saving for a dream trip – can sometimes be discouraging, especially if you can’t see the light at the end of the tunnel. It’s very easy to lose momentum and quit. But, that doesn’t have to be how it goes for you. That’s why I want to share some tips with you to keep at your financial goals even when the going gets tough.
Here are my top 5 tips when your are trying to stay motivated while working towards your BIG financial goals:
Name Your Goals
For me, making a goal specific is one of the main ways to keep motivated towards reaching that goal. If you have a vague or not very specific goal, it’s hard to stay motivated. It’s important to specify and name your goals. The more specific the better! Ask yourself what financial success looks like to you? And, when you feel like giving up on your debt free journey, dig deep and remember your why. Get clear on what it is all for
Once you’ve specified your goals, you need to speak them. Tell others about your goal, post about them on social media, put yourself out there and make others aware so they will hold you accountable. I’d also suggest writing out or typing out your goals and posting them in places where you’ll see them regularly – next to your laptop, inside your journal, on your refrigerator, etc. You could even incorporate them into a vision board if that’s more your style.
When my husband and I were first on our debt free journey years ago, it was tough and I wanted to quit. I just couldn’t see the light at the end of the tunnel. But I kept my why in the front of my mind and that helped.
Build Your Support System
Once you decide on your financial goal and you make sure your goal is very specific, get yourself some support. It’s best if those closest to you support your goal and also take part in reaching that goal. If you are in a relationship and/or have kids, try to make it a family goal that you can all work towards together. Maybe even make reaching the goal a game or fun competition with your family members. To stay focused and motivated when working towards your financial goals, make sure you have the support of your family and spouse so you can cheer each other on.
Celebrate Small Wins
If you set a huge financial goal, it can be hard to stay motivated along the way. It’s helpful to break your large goal into mini goals and celebrate along the way as you reach each mini milestone.
When my husband and I started paying down our over $100K in debt, we had to find smaller increments and goals to celebrate or it may have begun to feel overwhelming and like we were never going to get ourselves out of debt. Celebrating the little wins along the way can make things more fun and keep you motivated – even if your celebration is just yelling and dancing.
I love to think of it like this: How do you eat an elephant? One bite at a time. The same goes for paying down your debt!
This might be hard, but you may need to cut loose any friends (for the time being) who don’t support your goals. If your friends are not happy with your success or try to get you to give up on your goals, this can seriously impact your motivation to reach those goals. If you are clear on your financial goals and your friends are dragging you down, be honest with them about your goals and ask for their support. And, if they still try to tempt you to spend, maybe it’s time for some new friends who are more aligned with where you are at right now in your life and your financial journey.
If your friends can’t understand why you’d rather pay off debt than go on another trip, you might need new friends… just saying.
Find a Supportive Community
If you are looking for support and motivation as you work towards your financial goals, I invite you to join us for 31 Days of Money Motivation. Every day in December, across all of my social media accounts, I am sharing a Money Motivation Tip. We just started a few days ago and I am already floored by the support and encouragement that I am witnessing. If you need support as you charge towards your goals, come and join us!
To join in for the 31 Days of Money Motivation, go and give us a follow on Instagram, Facebook, or LinkedIn – whichever is your preferred platform.