You may be thinking, why even have a rainy day fund?
Well, have you ever heard of Murphy’s Law? If you haven’t, it states: anything that can go wrong, will go wrong. Let’s face it, the more you are unprepared for something, the more likely, it seems, it is to happen. There’s always something. Maybe your car breaks down, maybe something needs fixing in your home, or maybe your kid gets injured. The more you are prepared for emergencies with a rainy day fund, the better off you are.
The recommended amount to have in your emergency fund is three to six months worth of expenses. Some experts are even saying 12 months, which I get, especially with what’s going on in our world right now. The more you have saved up the more wiggle room you have to get through these trying times.
My husband and I have six months of expenses saved up. But, it wasn’t always that way for us. We used to have zero saved. But, we started out with small goals. Our first goal was to just save a thousand dollars. Once we hit that first goal, we bumped it up a bit because we knew we ultimately wanted to have at least three months. Once we got to three months, we felt secure and reassured and we were comfortable for a bit. But eventually we decided to try saving up six months worth of expenses. I’m the type of person who wants to be extra prepared and have that extra safety net for our family.
Now, don’t get overwhelmed, it didn’t happen overnight. It took years and years of saving, but we started off small and so can you! Just think, have you ever heard the phrase: How do you eat an Elephant? One bite at a time. It’s the same thing with building up an emergency fund or rainy day fund.
Here are some ideas that you can incorporate right now into your day-to-day life to build up your rainy day fund:
Automatically take a portion off of each paycheck.
Have a specific amount of money automatically deducted from your pay and put into a savings account. Out of sight, out of mind. The key here is to make it automatic, so you don’t even have to think about it. That way, you aren’t tempted to touch it.
Keep the Change Saving Programs.
Many banks, like Bank of America have programs where, when you spend, they will round up to the nearest dollar and automatically put the remainder into a savings account. If your bank offers this type of program, enroll in it! It’s another thing you can do to save without even thinking about it. It might seem small, but over time you’ll start to see it grow.
Swear Jar.
Sometimes, you might be trying to change a habit. Maybe it’s a swear jar, but you can do this for any habit you or your kids might want to change. Whenever you do that thing, you add a specific amount of money to your jar. You can get the kids involved and they will really stay on top of you to let you know when you need to add money to the jar. It almost becomes like a game.
When eating out or buying a treat, put a certain amount aside.
So, every time you go out for ice cream, a coffee, or out to dinner, add a set or predetermined amount to that fund or money jar. Make sure to do it every time. If you have the money to go out for a treat, you have an extra dollar to put into your fund.
Take a portion of a bonus or refund check and put it aside.
I know a lot of people get so excited when they get their bonus or refund check. That’s fine, but before you spend it all, take a portion off the top and put it into your rainy day fund. You can still splurge or treat yourself, but be sure to save some, too.
Whatever you come up with to do to save for your rainy day fund, get the whole family involved. Write it out and make it a family affair. Include your kids and make it fun. Remember to be consistent. It might seem small at the start but over time things will add up. Be careful not to dip into your fund until there is an actual emergency (and buying a cute pair of shoes on sale is definitely not an emergency).
Can you use help getting your rainy day fund set up? Book a FREE 15 min call with me to find out how I can help you with your budget plan. To schedule your call, click here!
I see it time and time again with my friends, extended family, and even my own family in the past. As parents, sometimes we fail to plan for certain expenses and then, when those things sneak up on us, we scramble to find the money to pay or we end up moving money around to make it work. The whole cycle creates chaos and can cause conflict between spouses. But, it doesn’t have to be this way!
My goal is to help parents live a more prepared life. When we think of being prepared, you might immediately think of things like safety, but being financially prepared for situations is so important, too! Being prepared for unexpected expenses is just one way that parents can make sure they manage their household and raise independent kids that grow up to do great things!
When you prepare for the unexpected by adding some extra wiggle room in your budget, you avoid unnecessary stress, arguments, and you set a great example for your kids! The first step in being prepared for unexpected expenses is to recognize them.
From my observations, here are the top 3 expenses that I see most families fail to plan for:
#1 Birthday Gifts
Now I’m not talking about birthday gifts for our own kids or partner. I’m talking about all of the other birthday parties that pop up throughout the year. We all have kids and those kids get invited to birthday parties ALL. THE. TIME!
But, most parents rarely plan ahead, financially, for purchasing all of these birthday gifts. I have two kids and between the two of them it feels like we are getting invited to 2 or more kid’s birthday parties a month. That’s a lot of gifts to buy and all of those gifts add up to a pretty good chunk of change we’re putting out every single month.
# 2 Back-to-School Supplies
This comes around every year, yet every year we’re surprised by how it all adds up.
We buy our kids supplies like pens and pencils, crayons, markers, binders, and other physical school supplies, but that’s not where it ends. There’s also new backpacks and lunchboxes, new clothes, and more. Our kids grow every year, so every year they need new clothes!
When the time comes, every single year, back-to-school shopping hits hard. And, the more kids you have, the bigger the expense can get.
#3 Holidays and Parties
BBQ’s, potlucks, dinner parties – plus holiday parties and gatherings, oh my! They happen every year but we don’t always think to plan for them.
But why do they create such a large, unforeseen expense? If you host, you need to buy all of the food plus decorations. For me, I have a separate fund for our family food and groceries. But if I’m hosting a holiday or a party, I don’t want that to come out of our regular weekly grocery budget. It has to come from somewhere and if you don’t plan for where, it can easily end up going on a credit card.
Bonus: Christmas Shopping
I know I said I had 3 expenses that parents fail to plan for but I’m throwing in a bonus for you and it’s Christmas! So many parents don’t budget for Christmas gifts. Or, they budget for Christmas gifts but forget about ALL of the other expenses that come along with the Christmas parties, like food, decorations, and outfits! There is so much to spend on at Christmas time it can get overwhelming.
The Super Simple Solution
All of these things happen every single year, yet we always find ourselves caught off guard. Well, you don’t have to continue with that cycle! I have a super simple solution to share with you.
For each occasion, take the amount you think you normally spend on those things. For example, back-to-school clothes. Decide how much you think you normally spend each year to buy your kids new outfits, then divide that by 12 and put that smaller amount aside each month. Now, when back-to-school shopping rolls around, you actually have money dedicated for that that you can pull from. You don’t have to worry about where the money is going to come from or pull out your credit card!
When you start thinking of things early, you know it’s coming so you can plan for it and be more prepared.
If you’d like to learn more about budgeting for all of your yearly expenses, I’ll be hosting a Happy Family Budgeting Workshop in just a few weeks. Head here for all of the details and to get signed up!
I have to admit, years ago, there was a time in my life when I exhibited all 10 of these signs of financial struggles. It started right around the time my husband and I got married in 2006. We were spending, spending, spending – and we had no idea how bad of a situation we were getting ourselves into. Honestly, I don’t even know what we were spending on. We had multiple credit cards open and we were racking up the debt faster than we could pay it off!
In the beginning, we were only experiencing 1, or 2, or 3 of these signs, but before we knew it, we were experiencing almost every single one.
Does this sound familiar?
If this sounds like you, I want you to know, you are not alone and even reading this shows me that you are heading in the right direction. In order to resolve and take care of an issue, you need to acknowledge it. My hope is that you’ll see these signs and if you recognize them in yourself, you’ll make the decision to take action before things get too far along.
Here are 10 signs financial struggles might be creeping up on you:
You Don’t Know How Much You Owe
Credit cards, loans galore – it can be so overwhelming. Do you feel like there’s just so much, you decide to push it to the back of your mind and ignore it or pretend it’s not there? If that’s you, the financial struggle is real.
You’re Arguing with Your Partner About Money
When arguments continually center around money, finances, and spending – your financial struggles are a real problem.This arguing can start out small and escalate, especially if one person is a saver and the other is a spender. When both spouses aren’t on the same page about spending, it results in tension and, over time, this tension puts a strain on your relationship.
You Need to Use Credit Cards to Cover Expenses
You know you don’t have money in the bank but you’ve got a handy-dandy credit card in your pocket. So you buy now and pay for it later. This leads to rapidly racking up credit card debt. It’s time to really look at your finances if you always find yourself relying on your credit cards.
You’re Only Able to Make Minimum Payments
If you are only able to make the minimum monthly payments on your loans and bills, it is a sign that your finances might not be where you need them to be. When you have multiple credit cards and loans, those minimum payments add up and the balance never appears to get smaller due to interest.
You Frequently Make Late Payments and Overdraft Your Account
When you miss a payment or overdraft your account, you’ll get hit with loads of extra fees. No one wants additional fees – they really start to add up. And, mounting fees and charges will just add to your debt. If this happens to you frequently, it is definitely an underlying issue you’ll want to look at.
You Don’t Have a Savings or Emergency Fund
Emergencies happen, things break down, so it’s important to have a plan and some funds set aside for those unforeseen events and accidents. Without a savings or emergency fund, you’ll end up taking out more loans and using your credit cards. It can take a while to get to a place where you can set up a savings fund but the sooner you’re able to do this, the better off you’ll be.
You Find Yourself Borrowing from Family and Friends
When things are bad, you might feel like you have no other option than to rely on family and friends. Fortunately, this wasn’t a huge issue for us. If you rely on friends and family to bail you out, it is time to start establishing new financial habits to move towards financial security.
You’ve Requested an Increase on Credit Limits
Credit cards have limits to help us from not racking up more debt than we can payback. If you’ve hit that limit and you’re requesting more credit, that’s not a good sign. This goes hand-in-hand with opening up multiple credit cards. Or, have you found yourself getting creative with moving balances and debts from one place to another? If this is you, it might be time to take a good hard look at these habits.
You Have No Retirement Savings
This isn’t necessarily a sign you’re struggling, but it is something you want to start thinking about. I’m sure you don’t want to be working until you’re 80 or 90 – no one does! But if you are getting closer and closer to retirement age with no financial plan, you’re going to find yourself experiencing financial struggles. The later you start saving for retirement, the more difficult it will be to grow your funds into something you can live off of.
You’re Living Paycheck to Paycheck
If this is you – you get paid and you’re already relying on your next paycheck. If you’re in the vicious cycle of using your paycheck before it even hits your bank account, that is a really strong sign that you are struggling financially.
Take a step back, lay everything out, take a look at your situation, and be honest with yourself. Acknowledge and be aware of what is happening in your life and your finances. It is going to be okay. Now, let’s take some steps to move your family forward to a better financial space.
I’m holding a FREE live online Family Budget Planning Workshop at the end of August and I’d love to have you join me. Click here for all of the details so you can begin to manage and control your family without the overwhelm.
It doesn’t really surprise me when I meet people who don’t budget. I’ve been at it for so long and it’s become such a major part of my life that it’s rare I go a day without thinking about budgeting. But, I wasn’t always like that.
At one point in my life, I was one-half of a newly married couple that was 100K in debt! Deciding to set and stick to a firm budget changed our lives, our relationship, and our future.
If you haven’t yet started budgeting, I’d suggest giving it a shot – especially if you are in one of the following groups!
Young Adults
Budgeting is important for young adults as they begin to navigate life on their own. They’ll be faced with new expenses like student loan payments and possibly rent for the first time.
For many, this is the stage of life where either positive or negative money habits will begin to form. If positive habits form in early adulthood, those habits are likely to remain throughout their lives.
Young adults may begin planning for larger expenses like a wedding, purchasing a first home or car. These are all expenses that are much easier to navigate when budgeted for.
Newly Married Couples
A budget is really helpful for newly married couples because they may be merging bank accounts, spending habits, and even debt for the first time. You could have a situation where one of the partners was a budgeter prior to the coupling and the other wasn’t, where neither has ever followed a budget, or where both are dedicated budgeters.
A newly married couple may be paying off large bills from a wedding and/or honeymoon. They may be considering purchasing a new “Forever” home.
They are at a high risk of falling into poor spending habits as they may now have a newly combined income and the freedom and desire to eat out often, travel freely, and shop at will.
It is especially important to learn budgeting as a newly married couple begins to consider growing their family.
Families
It is beyond necessary for every family to have a budget. Families need to know how much money is coming in and going out each month. When a couple adds kids to the mix, the spending and needs expand. Without a clear picture of what is going where, things can get sticky really fast.
The more people in the family and depending on the ages of the kids, the possibility for unexpected expenses increase.
Additionally, kids are expensive. People don’t just say that to be funny, it’s true! Have you seen the prices for organized sports and summer camps? These are often expenses you’ll need to plan for far in advance.
Other large expenses families need to budget for – travel. The cost of traveling exponentially increases (especially by plane) the more people you add to the family. Your weekly grocery bill will also explode with both an infant (formula and diapers) and teenagers (they eat allllll the food, seriously).
Using budgeting strategies to prepare for these things in advance will keep your family protected in the event of a crisis.
Single Adults
Single adults can also greatly benefit from a set budget. Oftentimes, single adults find themselves supporting themselves as well as dependent children on one income. There may also be a mortgage and car payment to consider.
For a single adult supporting a family on one income, an unexpected crisis can be completely devastating. Having a budget where you regularly add to your savings could be a true life saver.
Kids
Even kids should be learning about budgeting! I know they might seem young but I promise you, it will be worth it. The earlier you begin to teach your kids the value of money, the better set up they’ll be in their adult life.
Since my kids were 4 and 6 years old, I’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 9 and 11, I’m working on introducing the concept of budgeting with them.⠀
I’ve created a great system for us and you can check it out here. I’m sure it will evolve over time but for now, they are learning the basics of what I want them to learn and practice as adults.⠀
When kids learn budgeting strategies at an early age, they will bring those habits with them into adulthood.
I’m guessing you’ve gathered that it’s important for EVERYONE to learn budgeting. If you are looking for assistance in setting up your family budget, I’m here for you! Let’s chat about 1:1 coaching and I’ll help you set up a systems and routines that will work for your unique family.⠀
So, you’ve met that special person, dated, and fallen in love. You trust each other, want to be together 24/7 and do everything together. Ahhhh, young love.
Now you’re faced with that age old question – do you join your bank accounts? Some might even say the decision to join bank accounts is an even more significant commitment than marriage.
Now that you’re part of a couple you might be trying to decide if joint or individual bank accounts are right for you, here are some things to consider:
Joint Bank Accounts
A joint bank account is a bank account that is managed and owned by more than one person. It functions just like a standard account, except it can be accessed and modified by more than one person.
Pros of Joint Bank Accounts
It Makes Things Easier: Having joint accounts with your partner leads to more simplified budgeting and bookkeeping. With everything in one place, you can more easily monitor what’s coming in and what’s going out.
Partnership: Ever heard the saying, “What’s yours is mine”? Well joining bank accounts shows you really mean it! It can also be a way to build and grow something together as a team.
You Can Save on All the Fees: I’m not saying that joint accounts don’t have fees, but with a joint account, you can minimize the number of accounts and therefore the fees.
Cons of Joint Bank Accounts
Secrecy: One major disadvantage of having joint accounts is that, since your partner can always see where/how you are spending money, surprises can be easily spoiled. You’re far less likely to receive a surprise gift, be surprised by a vacation, or have a successful surprise party thrown in your honor. But, I can think of worse things.
Overmanagement or guilt: If one partner is a spender and one is a saver, you may be in more frequent spats, hold grudges, or undergo a power struggle around joint finances.
Messy Breakups: Joint bank accounts can cause really messy situations in a breakup. Be sure of your relationship before joining accounts.
Individual Bank Accounts
An individual account is a personal bank account that is used by an individual. It is for personal banking as opposed to a shared corporate account or joint account.
Pros of Individual Bank Accounts
Maintain Your Independence: Many people feel what they earn is theirs and that they shouldn’t be accountable to a partner for spending their hard earned cash.
Complete Control: With an individual account, you have financial security and complete control over your own financial situation.
Protect Your Assets: If one partner has multiple or higher assets, it may be wise to keep them separate, especially in instances where the other partner carries a lot of debt.
Cons of Individual Bank Accounts
Bill Management: Managing who pays what bill and from what account can get tricky when you are managing a household from individual accounts. It is necessary to make clear what bills get paid, from what account, and by who.
Trust Issues: Trust issues can arise when you are unable to easily view finances, purchases, and income with your partner.
In Case of Emergency: I know, we don’t want to think about this, but having separate accounts can pose some issues if one member of the couple is incapacitated in any way. The partner may have a difficult time gaining access to the accounts.
What works for us.
What works for us might not work for you. My husband and I have all joint accounts. We do things this way because we believe it is all our money. Also, all of our bills and credit cards are in both of our names. It is important to us that we each have full access to all of our finances.
Every relationship and partnership is different, so what works for us might not be what is best for you and your family finances. Be sure you weigh the pros and cons of joint and individual bank accounts before you make the decision for your relationship.
If you are looking for assistance in setting up your family budget, I’m here for you! Let’s chat about 1:1 coaching and I’ll help you set up a systems and routines that will work for your unique family.⠀
In many families, all of the finances, bill paying, and budgeting fall squarely on the shoulders of one family member. I definitely understand that usually one person takes the lead on finances. But it is still so important for so many reasons that all members of the family are involved in money discussions and decisions.
Here are 3 reasons to involve your whole family in budgeting:
Both Spouses Should be in the Know
In any couple, there is usually one person who takes the lead with finances and one person who is happy to hand it all over. It is important that the spouse who is ready to wash their hands of the finances doesn’t completely turn a blind eye. They need to stay in the know!
One very simple, and easy to understand reason both spouses need to know what is going on with your family budget and finances is in case of an emergency. If, god forbid, the budgeter in the family becomes incapacitated for any reason, the last thing you are going to want to spend your time doing is sifting through financial records you likely don’t even understand.
To keep both spouses aware of what’s going on in the household financially, we suggest making time to meet and discuss finances. Have your “Money Meeting” minimally, once a month. If possible, I’d even suggest doing it once a week. As your kids get older, have them join in, too.
It is definitely okay for one spouse to manage the budget. But the other should be 100% aware of what is going on and have complete access to all financial documents and materials.
Overall, I think both spouses should be in the know about the finances, whether one or the other physically manages it.
Teach Your Kids Valuable Skills at an Early Age
Looping your kids in on your budget is a good way to get the kids learning what it takes to run a household at an early age. This is a lesson they won’t ever forget.
I totally understand the desire to hide weakness or difficulties from our kids. Of course, we want to shelter our kids from any unnecessary stress and allow them to be kids for as long as possible. But, they should also enter adulthood with a realistic idea of how finances work.
This is why we recommend speaking openly about money, costs of different things, and bills in front of and with your kids. We also recommend including your kids in spending decisions starting at a young age, and inviting them to your 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 9 and 11, 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.
One day, your future daughter or son-in-law will be thanking you for raising such a money conscious child.
What’s the Big Deal, Anyway?
This might be the simplest reason of all to get the whole family involved in budgeting. Ready for it… why not? What is the big deal? As far as I can see, there is no downside to getting the whole family involved in budgeting. It brings partners closer together, eliminates placing blame, makes everyone aware, and helps develop responsibility in kids.
Budgeting is not something to be feared or hidden. If you have family members who avoid budgeting, it’s likely a sign that they NEED to be budgeting. If you make budgeting a big scary thing, it will feel like a big scary thing. In reality, a good budget is actually pretty simple and easy to follow once you take the steps to put one in place.
Make your budget fun and speak about it openly – your whole family will rally together and really bond over budgeting. It might sound crazy, but trust me, it’s true – just look at my family!
If you are looking for assistance in setting up your family budget, I’m here for you! Let’s chat about 1:1 coaching. I’ll help you set up systems and routines that will work for your unique family. You can find out more about my family budgeting services here!
Struggle with staying on top of your bills and budgeting?
Do you stress out and dread when the 1st of the month rolls around?
Tired of living paycheck to paycheck?
Have constant arguments with your spouse around the family finances?
Have no clue on how to even get in control of your financial life?
Download this FREE Monthly Budgeting Action Plan, which includes Worksheets with step by step instructions on guiding you exactly on what you need to do to set up your own family budgeting plan that works for you and your family.
Struggle with staying on top of your bills and budgeting?
Do you stress out and dread when the 1st of the month rolls around?
Tired of living paycheck to paycheck?
Have constant arguments with your spouse around the family finances?
Have no clue on how to even get in control of your financial life?
Download this FREE Monthly Budgeting Action Plan, which includes Worksheets with step by step instructions on guiding you exactly on what you need to do to set up your own family budgeting plan that works for you and your family.
Do you struggle with getting your kids to clean up their room?
Are you ready for your kids to be more responsible?
Would you like your kids to be able to manage their time better?
Ready for a simple way to teach your kids good money management habits?
Download this FREE Family Chore and Money System Action Guide. It includes worksheets with step by step instructions on guiding you exactly what you need to do to set up your own chore, schedule and money management plans.
I see it time and time again with my friends, extended family, and even my own family in the past. As parents, sometimes we 
I have to admit, years ago, there was a time in my life when I exhibited all 10 of these signs of financial struggles. It started right around the time my husband and I got married in 2006. We were spending, spending, spending – and we had no idea how bad of a situation we were getting ourselves into. Honestly, I don’t even know what we were spending on. We had multiple credit cards open and we were racking up the debt faster than we could pay it off! 
It doesn’t really surprise me when I meet people who don’t budget. I’ve been at it for so long and it’s become such a major part of my life that it’s rare I go a day without thinking about budgeting. 
So, you’ve met that special person, dated, and fallen in love. You trust each other, want to be together 24/7 and do everything together. Ahhhh, young love. 
