Thursday, 22 June 2017 19:48

Financial Tips For Single Parents

Smart money management is always important, but it can take on more urgency for those who are without a partner. Whether you're divorced, widowed, or single by choice, single parenting brings unique budgeting challenges.

Marilyn Timbers, a Connecticut-based financial advisor, says of having to raise a child on one income: "Children are a joy, but they do not come cheap." The U.S. Department of Agriculture notes in a report that it costs an estimated $241,080 for a middle-income couple to raise a child to age 18, and some single parents have to shoulder that responsibility alone. Even if child support is adequate - unfortunately nearly 50% of that support is never paid - you'll do yourself a favor if you think ahead about financial matters as a single mom or dad.

Estate planning is your first priority, according to Lisa Hay of Ascend Financial. It's essential to make arrangements for your children should you become incapacitated, and this means spending time on two documents that no one enjoys thinking about: a will, which specifies a guardian for your children and how you'll pass assets down to them; and a "power of attorney," which gives someone the legal right to make decisions on your behalf if you're unable to do so.

You may also want to set up a trust. A trust is a legal structure in which your assets can be held for the children. It is overseen by a trustee. And check with your employer to see if it offers a disability benefit. Generally, you will get a reduced income amount when you claim disability - anywhere from 50% to 70% of your salary. "Your income is your most important asset," says Tom Morrill, owner of Morrill Insurance Group. Insuring it can be especially crucial for single parents who don't have a second income to cover a gap.

Hay also says be sure to have life insurance. What you purchase will depend on your finances, but a term policy is most economical because it's a straightforward death benefit. A healthy 33-year-old woman, for example, would pay roughly $240 a year for a 20-year term, $500,000 life insurance policy. This would get your child through college should something happen to you.

Health insurance is "the number one insurance need for a single parent," according to Morrill, who considers life insurance a close second. People often complain about the cost, but if you're uninsured, a serious medical procedure or hospital stay can be disastrous to your finances. And, of course, losing a job or becoming ill is still more catastrophic as a single parent than as part of a two-income couple. A recent Harvard study revealed that 62 percent of bankruptcies were caused by medical debt. You can comparison-shop for policies at your state's marketplace or at HealthCare.gov.

Along with the rest of your boring-but-necessary financial thinking, don't forget about tax breaks. If you're a single parent, you should probably file as head of household (not as single) because you'll often pay less and get to claim a higher standard deduction. You can also claim exemptions for yourself and each qualifying child. You also might qualify for the earned income tax credit, the child and dependent care credit (if you pay someone to care for your kids), and the child tax credit.

As far as day-to-day household operations, here are a few more things to keep in mind:

  • Credit cards - In The Financial Guide for Single Parents Workbook, Larry Burkett warns single parents that, while credit cards may seem like an easy way to fill in the gaps of a decreased income, it's wise to avoid using them as much as possible.
  • Shopping in general - Many single parents have to make lifestyle adjustments after a divorce or the death of a spouse. You may need to consider moving or changing your spending habits. Burkett notes that lots of people like to go shopping to cheer themselves up, but the added debt you'll incur will only make you feel worse. This even applies to groceries, which are an expensive part of the budget. Plan that trip carefully, too, so you can better avoid impulse buying.
  • Holidays - Guilt causes many single parents to overindulge their children, even if they can't afford it. This is especially true during holidays and birthdays. Be sure to set designated amounts for gifts, and stay within the budget.
  • Ask for help - Check with your credit union for financial advice. And there are many nonprofit organizations with programs specifically designed for single parents.

Whatever your income, it's important to give yourself a safety net, because emergencies happen. Put aside a little bit of money from each paycheck to set up an emergency fund for car repairs, broken refrigerators and other realities of life. As a general rule, experts recommend having six months' worth of non-discretionary expenses in an account that is separate from the one you use for daily expenses. That could be a savings account or possibly a low-risk investment account.

Bucket budgeting can help, says Jan Cullinane, author of AARP's The Single Woman's Guide to Retirement. That means creating four different accounts: one for fixed monthly expenses such as food and bills, another for long-term expenses like retirement or replacing appliances, a third for emergencies and a fourth for discretionary spending.

"Put the appropriate amount of money into the first three, and whatever is left is your discretionary or 'fun' spending," says Cullinane. "If there is nothing left for that month in the 'fun' bucket, you simply go without - you don't dip into the other buckets. Harsh, but necessary."

And it's more doable than you'd think. One study asked people if they could save 20 percent of their income. Most respondents said no. But, when asked if they could live on 80 percent of their income, most said yes. "Be aware of how you frame questions to yourself," Cullinane says. "You might be surprised."

Have you faced tough questions and financial circumstances as a single parent? What were the most useful solutions you found?

SOURCES:
Published in Blog

Although I write about personal finance, no financial topic is independent. So, I am really writing about life, death, and everything in between through a financial perspective. Memorial Day includes all of these. My husband and I have birthdays near Memorial Day, and we celebrate our lives. We also celebrate the lives of those ones who have died. My grandpa passed away on May 31st ten years ago. We visit his grave and my dad’s grave and remember them. I’ve been told that life is short and passes quickly, but the last few years I’ve actually experienced that: my babies aren’t babies anymore, my grandmas are some of the last ones living in their families, our parents retired, and kids I babysat have their own children. Now, I realize that life goes quickly.

What does the Memorial Day holiday include for you?

Memorial Day Vacations

Our entire married life, we have had a tradition to go to Bear Lake over Memorial Day weekend. This is how we celebrate our birthdays. My husband doesn’t ask for much for his birthday, but he does ask to go to Bear Lake every year. We have made so many memories on these trips. We look forward to this trip every year. This year, we really need a vacation at the end of the school year.

How do you celebrate life on Memorial Day?

Memorial Day Traditions

When I was a child, we spent Memorial Day with my Grandma and Grandpa. I remember sleeping over at their house. Then we would take flowers to the gravesites of our deceased family members. It was a simple and meaningful holiday tradition.

Memorial Day Sales

Many stores have sales on Memorial Day weekends. I’ve already received a dozen emails notifying me of sales this week. Holidays can be popular for yard sales (when the weather is good). I’ve noticed that the Memorial and Labor Day Sales often extend several days past the actual holiday. If you are planning to purchase anyway, you many want to include this into your holiday budget.

For example, a couple of our kids need new mattresses soon. Also, we are looking for a propane fire-pit. I’m hoping that we find a good deal around this holiday. Sometimes I can find sales by shopping around holidays. Last year, there was a baby shower held in December for my sister-in-law. I was able to shop the Black Friday Sales to find a gift for my nephew. Items from his baby registry were on sale, and free shipping was offered, so I was able to get her a lot more with the money I wanted to spend than I would have been able to buy shopping regular prices. I want to do this more often.

If you have the storage space, you can buy clearance items for next year’s holiday. I personally don’t have the storage space to do this, but my mom does and I have benefited from her purchases. Last year she found some Easter decorations on sale at the end of the season. She saved them, gave them to me, and I appreciated them. If it wasn’t for her, I wouldn’t decorate for any season, but the kids really enjoy having decorations. They think it’s fun.

Celebrating

Since life gives us plenty of unexpected expenses (like a new starter for our car this week), I try to plan the expected ones.

Holidays, including the summer holiday, can break our plan if we don’t include them. What are your traditions for Memorial Day? How much does each of these activities cost? Answering those questions will help you enjoy your holiday and summer- especially if you are new to budgeting. These events have "broken my budget" because I didn't prepare for their cost.

I hope that you have a fun relaxing hoiday that comes from following your holiday plan.

I’m still cleaning walls. This job seems to be neverending, but one good result is that I've lost all desire to upgrade to a larger home. (I don't want any more walls to clean.) Last week I had to move the couches in the front room so that I could get to the walls. Underneath the couches was a big mess. I thought it would take me a few minutes to clean the front room, but it took several hours! My kids had shoved items under and behind the couches instead of throwing and putting the stuff away. I hadn’t realized that area was even getting cluttered because the clutter hid beneath the couch. I found broken junk, dirt, books, socks, shoes, and a lot of pens. Now I know why I can’t ever find a pen!

Like the couch, financial clutter is often unseen. It can be an overwhelming mess that we don’t want to uncover. I’ve observed so much pain result from cluttered finances. I hope the next few suggestions are helpful if you are feeling overwhelmed with finances.

Sort out the mess

To be honest, I felt like throwing away everything that was underneath the couches. I almost did but if I had, I would have caused other problems. It’s hard to know where to start when you’re in a mess. Financially, we can also feel like giving up. It’s not a fun feeling. When I help a family make a budget, the first thing we do is to sort through the bills and the income. We examine one financial item at a time and figure out how much is due, when it is due, and how it will be paid. This is such a simple idea, but I’ve seen people change from feeling overwhelmed to feeling hopeful. It’s not hard to sort through bills, but it is time-consuming so the next suggestion can be helpful.

Get a budgeting mentor

I have had several exercising friends over the years. It helps so much to have them exercise with me. It is helpful when they know about weight equipment and nutrition. But, even when they don’t, it helps to have someone to exercise with me. Finances can be the same way. Sometimes it just helps to have someone alongside you. It could be a spouse, friend, parent, or sibling. It really just needs to be someone who cares about you. If they have financial background, it can be helpful, especially if they are working on financial goals. We can all find someone who doesn’t mind helping us because it helps them too. It helps them to be motivated. It helps them to serve. So, it’s good for everyone. My cleaning buddy was my five year old. When she stayed with me, it was helpful. When she left, it was much harder.

Commit to your finances

That was not the first time I cleaned under the couch. In fact, my husband had cleaned behind it recently. We were both amazed at how quickly it became cluttered. Unless our family changes the habits that caused the clutter, the problem can recur. Clutter can easily come back. Financially, I have seen this happen. Oftentimes, we are making big changes, so it’s going to take more than one time. Just like exercising, each day we need to find motivation to do it. We also need to do this with our finances.

No matter how cluttered your finances may seem, you can work through it and remove the clutter. It’s such a peaceful feeling that is worth the effort.

A couple of weeks ago the weather was very rainy, and we stayed inside a lot. I started noticing how filthy the walls in my house were. They had layers of dirt, dust, handprints, marker, pen, crayon, boogers, and mold. I hadn’t noticed them gradually get so dirty. Have you had an experience like that? I decided to wash the walls and the windows of our house. As I’ve scrubbed boogers and crayon off the walls this past week, I have had a lot of time to think. As I felt the sun’s warmth coming through the windows, my thinking drifted to summer.

I’ve had a few summer plans fall through already. We were planning to host a foreign exchange student, but we were not picked. We signed Jackie (11) up for a camp, which ended up being full. I like to have plans. My friends tease me about it. I’ve had plenty of summers where the spending plan failed. I’ve come to the conclusion that budgeting for summer is different than budgeting for the rest of the year. Trying to budget for summer in the same way that I budget for the rest of the year doesn’t work.

Although we don’t have school lunch or school expenses, there are other expenses that can make school expenses seem cheap. My kids brought home fliers for a dozen different summer camps. There is a camp for almost everything. We also have summer vacations, pool passes, drive-in movies, memberships, and holiday parties available to spend our money. With the warm weather, we may want to buy gear for our outdoor hobbies. It’s also a time to work on outside projects. Ty’s trip to Lowe’s last week caused a budgeting challenge this month.

Summer expenses are harder for us to predict than expenses during the other seasons of the year.

They just are! Has this been true for your family? I have accepted this, but this year I am going to embrace the unpredictability. I’m going to plan on it! I’m not going to fight it. That doesn’t mean that our budgets have to fail, but it does mean that I need to budget differently.

What unexpected events have you experienced in past summers? We have family visit during the summer. I didn’t expect to spend much money because I wasn’t on vacation, but we did activities with them. This year, I need to plan on spending money on those activities. One of my friends told me that she had family come for several months and the activities started to cost too much, so they had to say no to some of the activities, which is okay too. Just like the rest of the year, we have to say no to some of the summer opportunities.

Budgeting requires flexibility. Summer budgeting requires more flexibility!

I briefly mentioned the trip to Lowe’s. My husband is finishing the garden fence and backyard patio. The supplies cost $320. That amount of money could really break a rigid budget, and honestly, I started to wig out. Before I approached my husband about the expense, I took some deep breaths. The deep breathing made me realize that I needed to allow more flexibility. I wasn’t able to predict this expense, but that is okay. It opened up a conversation with my husband. We discussed what budget category it would come from since we didn’t have that much money in our repairs fund. Should we use our emergency fund? It wasn’t an emergency. Were there other categories with money that we could move to the repairs fund? We had saved to replace an engine in our 1975 Volkswagen thing, which has been sitting in our garage for years. We discussed using that money for the outside repairs, but Ty is planning on getting it running.. Thankfully, we were a month ahead (using last month’s income to pay this month’s expense). We decided to use that money. It wasn’t the ideal, but budgeting isn’t a perfect process, and if I try to make it perfect, it will fail. Embrace imperfect budgeting. Budgets will work if we embrace it.

Summer income.

Summer expenses aren’t the only thing that can fluctuate. Income can too. Summer may give more time to earn extra income. My darling nieces and their family bought a shave ice shack last year and sold shaved ice. My cousin photographs families. My neighbor teaches classes online. Another neighbor lifeguards in the summer. My cousin-in-law prints logos on shirts. These friends inspire me to use the flexibility of summer to create income.

Summer is right around the corner. What are your plans to make sure your budget doesn’t go on summer vacation?

Monday, 17 April 2017 15:30

3 Keys for Teen Budgeting

Last week I gave ideas for youth to earn money. Once teens learn how to earn money, they need to learn how to spend it. When I was a teenager I earned money, saved money, and avoided debt, but I wish that I would have understood how to spend money an intentional and focused way. I hope this post helps at least one teen avoid my mistake.

Twenty years ago, we didn’t have social media, but I often got distracted by items “on sale." I really loved the feeling of getting a good deal. One time, we were an outlet store that had jeans on sale for $5. There was no dressing room to try the pants on, but I bought 4 pair because they were cheap. The pants did not look good. I didn’t like how they fit, so I didn’t wear them. It wasn’t a good deal. I would have been better off to buy one $20 pair of pants which fit me and which I loved. I needed a plan to help me stay focused on what I wanted.

There are 3 keys to budgeting:

A Budget Is a Plan

Budgeting is really simple to understand. You decide where to spend your money rather than letting your friends, social media, or advertising decide. Through budgeting, teens decide where their money will go and then they make it go there.

Youth use plans every day: recipes, school schedules, and game plans. For example, every teenagers has an education plan. Their counselors and their parents help them to make this plan and evaluate it regularly. Then, they take classes based on the plan. They consider the different classes and decide which classes that they will take: some are required and some are optional. It would be very chaotic if they just showed up to school and decided what class they would attend that day based on what was going on.

“Oh, there is a field trip in the choir class: I think I’ll join them.”

“There’s a party in Spanish. I’ll make that one of my classes.”

But, this is what often happens with our money and our eating habits. What if parents, leaders, and teachers sat down with the youth and helped them decide to spend money in the same way they help them decide which classes to take? There would be some required classes. We also have required expenses called needs: gas for the car, supplies, clothes, etc. There are some elective classes, and there are elective “variable expenses" (vacation, entertainment, and eating out).

Budgeting Is Flexible

Let’s say you have a plan for your vacation. What if the weather is bad, or what if you get sick? What if you hear about a neat activity that you hadn’t planned on? You can adjust the plan. You don’t abandon the plan. There are unknowns. What if an opportunity comes up which you weren’t expecting?

A couple of weeks ago, my niece invited my daughter Jackie to come up to Alaska with their grandparents. Jackie hadn’t budgeted for that, and she didn’t have much time - only three weeks. She had been saving her money and once she heard about Alaska, she focused on that trip. I heard her tell someone that she didn’t want to spend her money because she was saving it for Alaska.

Sometimes unexpected opportunities come up that you want to do. That isn’t the same as buying anything that’s a good deal or letting others talk you into it. If we hadn’t had the money, it would have been fine to say that we couldn’t afford it and that we will travel to Alaska when we can afford it. But, our family had a vacation fund. We decided we had enough in there to pay for half of her ticket. It took most of her savings to pay for the other half of the ticket.

Not everything is predictable. You can predict a lot of things, but without flexibility, budgets will fail. Back to the school schedule analogy, if a class isn’t working, it can be evaluated and changed. The schedule isn’t permanent but it is set.

Budgeting Requires a Gauge

Although budgeting does have flexibility, it is important to still follow the budget. Teenage drivers learn pretty quickly that they can only drive until the car runs out of gas. At that point, they have to refill. So, they have to watch the fuel gauge or they get stranded.

Budgeting also requires a gauge in order to follow our budget. Money is finite, so it’s important to know how much is left. It can be a very simple system. Teens start out with few expenses compared to adults, so it is relatively simple.

One example of a gauge is the envelope system. They have an envelope for entertainment, and they can see how much is in there and plan their entertainment. If they have a phone, there are a lot of apps that allow teens to do electronic envelopes. Without a gauge, budgeting doesn’t work, and we run out of fuel/money.

Life isn’t about money - money is a tool for life. Parents, grandparents, and other leaders of youth, we can teach them that they can budget their money to help them to live their life and be their best selves. They can stick to their financial plan, schedule, and budget. They can say "no" to expenses that aren’t right for them.

I get to serve with teenagers in my neighborhood. When I talked with them about budgeting money, they all said, “We don’t have any money to budget!” That is an issue. Besides the occasional gift, they didn’t have steady income. They need to earn money in order to budget that money.

Here are some ways for teens to earn money:

Hourly Work

My first hourly job was working as a cashier at a drycleaners. My neighbor worked there. She told me they were hiring and asked if I was interested. It was a nice job for a high schooler because they would let me do my homework when business was slow.

  • Lifeguarding: This is a popular job for teens who like swimming and like to spend their summers in the sun. Lifeguards learn important life skills like first aid, swimming, and life saving. This job can be seasonal, so it doesn’t interfere with school. Three of my siblings were teenage lifeguards, and it worked well for them.
  • Grocery Store: Work at a grocery store as a cashier, bagger, stock clerks, deli, bakery. I’ve done this one too.
  • Fast Food: My sister and I were recently talking about our experiences working in fast food restaurants. This can be hard work, and it was good for me.
  • Waiter/Waitress: This is a combo of hourly plus tips. I’ve known several teens who have done this, and it can be a good job for teenagers.
  • Parents Business: If your parents own a business, this can be a great job. My husband started working for his dad at a young age. He learned construction skills. This was hard work, but it paid very well and it taught him a lot. I also worked for my dad. He worked as a realtor, so I did clerical work and ran errands for him in the summer time while I was home from college. Working for parents can be a great opportunity!

Small Business

This could be any product or service that others will buy. Here are a few ideas:

  • Pet Sitting: Although this may not be regular income, it could be a good side job. If you love animals, this might be a great fit for you. My kids recently got to try this. They really loved watching our neighbors cat. Then they watched my mom’s cat for a month, and they realized how much work it was to have a pet. There were some really unpleasant parts about taking care of cats like cleaning up poop. No one wanted to do that. They made that job so much worse than it actually was by taking so much time to do it.
  • Selling Pickles: My nieces made pickles with their grandma and sold them. I thought this was such a creative way to earn money. They learned how to make the pickles, then they took orders.
  • Babysitting: I started babysitting at age 9. If you love to babysit, let parents of young children know. It makes a difference! One of my neighbors loves to babysit. Every time I see her, she asks me when she can babysit. She plays with my kids too. I can tell that she loves to babysit, so I usually think of her first when I am looking for a babysitter. Let your parents know so they can tell their friends. One of my friends has been able to get her daughter babysitting jobs by letting her coworkers know that she babysits.
  • Yard Work: There are probably quite a few of your nieghbors that don't want to mow their own lawn, so having your teen charging for lawn mowing services is a win-win situation for both.

Online Businesses

This is an option I didn’t have as a teenager. Internet wasn’t available to the public until I was in college, and most connections were dial up, so they were slow. There are so many options now for online businesses! One teenager I heard about was interested in gems and he had an online gem store. How cool! The internet opens up a lot of options. Some teenagers blog. Online businesses can be started inexpensively.

What jobs did you have as a teenager? There are so many options, so if you have a teen or are a teen who doesn’t have money to budget, try some of these work ideas out and let us know how it goes!

The first step to teaching your kids about money is talking about money.

“The most effective way to teach is by having frequent discussions and don’t ever lecture,” said Ted Beck, president and chief executive of the National Endowment for Financial Education, in a recent Wall Street Journal article. “Look for teachable moments and always be willing to answer questions.”

Unfortunately, this can also be the hardest.

A 2015 T. Rowe Price survey found that 72% of parents experienced at least some reluctance to talk to their kids about financial matters, and 18% were either very or extremely reluctant. The most common reasons given were that the parents didn’t want them to worry about financial matters or thought they were too young to understand.

But on his blog, the personal-finance guru and radio host Dave Ramsey encourages parents to be more open with their kids about money, even their failures. Parents’ biggest regrets are often not saving enough or going into too much debt, wrote Ramsey. Being honest about that in an age-appropriate way, he stated, can be a powerful lesson.

So how to start the talk?

  • Ask questions. If you’re going out to eat, talk about the price difference between the options, and ask them which they would choose. If they select the more expensive, talk through what you might have to give up later in the week.
  • Make them part of your budgeting. If you’re doing any kind of financial planning for the year, solicit input from your kids. Enlist them in your saving goals—no one watches you more closely than your kids, so they’re natural accountability partners! If you’re uncomfortable revealing too much of your financial picture, you can keep the discussions high level, but involving them makes money less abstract.
  • Open a youth savings account at Wasatch Peaks Creit Union. This is the best way to help them to learn to save for what they find meaningful in life. A lifetime of good savings habits can start now!
Published in Blog
Tuesday, 07 March 2017 22:24

Start Using Peaks Money Managerâ„¢

Wasatch Peaks Credit Union is so excited to announce that we are now live with our new Peaks Money Manager™ product.

This is a data-driven money management tool that securely integrates into digital banking products and enables users to take control of their finances. Budgeting, account aggregation, auto-categorization, and debt management are just a few of the tools that this product offers.

It is easy to access – just login to your Wasatch Peaks account online and select Services, then select Peaks Money Manager.

There is also an app available for mobile devices. The apps can be found in the app stores! Follow this link to download for Androids or this link to download for Apple products. Once you download the app, it will ask for an access code. This is generated within the desktop version of Peaks Money Manager. Simply login to your account at your desktop or laptop and select Services and then Peaks Money Manager. From there go to Settings (top right-hand corner) and then select Mobile Devices and click on Generate Access Code.

This is a great way to see all of your accounts at Wasatch Peaks Credit Union as well as any other financial accounts you have elsewhere. You can look at your HSA, John Hancock Account, and many others in one place to help view your total financial picture. Download or access it on your desktop today and take control of your finances!

Published in News

Over the weekend I bought Valentines for my family. Those are the first of the many gifts that I will buy this year. Budgeting helps me enjoy gift giving and helps me give more meaningful gifts.

The budgeting category of gifts can be challenging. It really is a subcategory that requires more planning. It’s not like my phone bill category that I allocate money and then pay it. Gifts need their own detailed plan within the budget plan.

Gifts and I have a love/hate relationship. I love giving gifts - especially when I find the “perfect gift” that will mean a lot to the person who is receiving it. Long before the Internet, I remember ordering gifts by phone. My sister and I were watching TV and saw an infomercial for a classical rock CD. She got excited and said she wanted it, so I sneakily wrote down the phone number and ordered it. Her eyes lit up when she opened it. That was so cool! I also love receiving gifts - especially surprises. I hate when I feel obligated to give a gift and can’t find one. In the past, I felt like I need to give someone a gift at Christmas because they gave me one, instead of graciously accepting what they gave. I’m trying to eliminate giving out of obligation, but I admit it is still a struggle.

Budgets make gift giving fun because it helps you avoid feeling regrets or other bad feelings. Here are steps to create your giving plan for this year:

Step One

Leave some flexibility in your gift budget. I’ve realized that there are some gifts that I’ll want to give that I can’t predict. I leave some flexibility in my budget for the baby showers, wedding showers, and graduations which will inevitably come up. We budget $20 a month to our miscellaneous “giving” category, so that we have some flexibility to give. Including this has been key to our gift budget.

Step Two

Personalize your gift giving category. Make it work for you. When I give small gifts like the Valentines that I bought, I include them in my groceries. I keep it simple if it is minor, but for big gifts, I plan them out. There is no right or wrong way as long as it is your way! Just figure out what your way is. I learned to do what is right for my family.

Around our 10-year anniversary, I started to feel pressure to go on a big trip. When I thought about why I felt that way, I realized it was because my cousin and his wife had just posted pictures from their 10-year anniversary trip, but we didn’t have the money budgeted for that and didn’t even really want to do that. So, we didn’t. It’s cool that my cousin wanted to do that and had a great time. I was able to feel happy for them and feel content that we didn’t spend money we didn’t have on a trip we didn’t really want to do. By personalizing your gift budget, you give the way you want to give and can feel content.

Step Three

Plan to save for the gifts that you can predict. Many of the big gifts that we give are predictable, like Christmas and birthday gifts. All of my family’s birthdays fall in the first 7 months of the year. I like this, but I have to plan for it. Some years I save throughout the year for birthdays and Christmas. This year, I don’t have the money saved, so I’m budgeting birthday money for the first six months. My husband is paid bi-weekly. I figured out when the 3rd paychecks of the month will fall, and designated those to go towards Christmas this year and birthdays for next year.

There are a lot of ways to save for gifts. Look at your personal situation to figure out how to save for those. Would it work best to put it all away at once or save every month? If you are self-employed and have a busy season, it could make sense for you to save for all your gifts during that time. Wasatch Peaks has a Christmas Club Account and Budgeter Accounts that could be a great tool to do this. I have used a spreadsheet or budgeting software to make electronic envelopes and set aside the money for birthdays so that I don’t spend it. Thinking through these details has relieved so much stress.

Step Four

Don’t just give because you feel obligated. When I do this, I feel bad afterward. My mother-in-law asked us not to give her anything for Mother’s Day except a homemade card. This was very hard for me because I love her so much and really wanted to give her a gift. She knew this and told Ty that she would be mad at me if I did something. I learned a lot from this. If we can think of something she would enjoy, like pictures of our family, we give them, and she graciously accepts them.

Express love through gifts. We can’t buy love, but we can buy gifts, and if done in the right way, they can help express love and strengthen relationships. When we were dating, Ty made me a DVD with songs to go with it. He also gave me a watch. The DVD meant a lot to me because it was so thoughtful. And after 15 years, I still have the watch (it just needs batteries). These are gifts that last. Since that time, I remember only one other Valentine's gift. Instead of focusing on Valentine's Day, we try to show love all the time. It’s so fun to pick up a favorite treat for my husband while I’m at the store. We aren’t anti-Valentine's Day - if you buy the heart balloons, big stuffed teddy bear, and heart shaped chocolates, that’s cool with us! My husband has gone to Walmart the night before Valentine’s Day for entertainment. He loves to watch dazed shoppers searching for a gift.

Step Five

Give what you can afford to give. Often, the best gifts are the gifts that mean the most to the receiver. These gifts are heartfelt, and not because they are expensive. They are often super simple and cheap, but require understanding what would mean the most to the receiver.

Almost 2 years ago, I attended a youth conference with a group of youth and adults. We got to know each other really well on that trip. One of the leaders served as our cook. At lunch time one day, he found out that I love eating the ends of the bread. On the way home from this youth conference, I found out that my husband had be fired unexpectedly and without cause. This was an emotionally hard time for us. We really needed support as Ty & I clung to each other and our young family. One morning soon after, I opened my door and on the porch was a bag of bread heels! I knew who had left them. I’m sure that this unconventional gift that didn’t cost much more than the trip down to the bread store. Most people wouldn’t get emotional or appreciate a bag of leftover bread heels, but that gift is one of the most thoughtful, unique, and meaningful gifts I have ever received. Tears come as I think of the kindness of that dear mentor!

Gifts can be a major or a minor budgeting expense. It’s up to you! Budgets are personal. You can make your gift budget as small or as large as you want it to be.

I have received a lot of gifts over the past 4 decades and I really appreciate those gifts. Budgeting has improved my gift giving! It makes it less stressful and more fun. The work it takes to create gift budgets has been so worth the reward.

In 2006, my sister got married. On the day before the wedding, I was asked to run a few errands to pick up some last minute items for her reception. I bought some music. I also bought a cardboard cutout of President Bush (which we turned into a cutout of my brother who was unable to attend). Lastly, I bought some decorations. A few days after the wedding, I checked my account and saw THREE overdraft fees for $25 each, which totaled $75. When I had made those purchases I knew that I had money but didn’t realize that it was in our savings account and not our checking account. The overdraft fees cost much more that the items I purchased.

I learned a lot of lessons from this experience.

First is to plan (aka budget) for parties. Because it was my sister’s wedding, I really hadn’t planned to spend money besides her gift. By planning, you can avoid costly fees and spending hangovers/aches. It was nice of me to want to help out and run the errands for my mom who was very busy, but I should have made sure that I could afford them or honestly said that I couldn’t.

If I could afford them, I needed to make sure that I had the money in my checking account. The items I bought were not that important for the party. We could have gone without them or my mom could have paid for them.

Secondly, I learned that mistakes can teach us. I haven’t had an overdraft charge since that day over 11 years ago because I decided that I would never let that happen again. At the time, it seemed like a very expensive mistake, but looking back, it was a cheap mistake that has saved me a lot of money because I decided to change. This mistake inspired me to become a budgeter.

Although I’m not perfect at budgeting, I have improved so much. Parties are all about celebrating something: life, friendships, and accomplishments. I don’t want the celebration to leave me with regrets. When you follow a budget, you enjoy the party before, during and after. By sticking to the plan, you feel like you do after a workout - you feel good.

Budgeting for a party does not have to mean that has to be cheap.

For example, a wedding budget could be $5,000 or $20,000. If you have a large budget, you can do an expensive party. If you have a small budget, then it will be a less expensive one. Both can be great, but the budget will determine the party. By spending what you plan to spend, you feel less stress and can really enjoy the experience and the memories which come out of it. I’ve been to wedding receptions that were expensive and some that were not expensive. Both were great because they were what that couple wanted. Some of my favorite parties have been the inexpensive ones. The memories made were priceless.

I’m not much of a partier. It’s probably because a lot of parties involve late nights and I like to go to bed early, but if you are a partier that is great. I saw a commercial for the upcoming Super Bowl parties. If you are a fan, you are counting down the days to watch the Patriots and Falcons face off in the Super Bowl this year. You might be planning how you’ll cheer on your team.

There are several ways to budget for parties.

Answering a couple of questions will help you decide the best way for you to plan the finances for your parties.

  1. Are parties a regular expense for you? What traditional parties do you have? Because it isn’t a huge expense for me, and because I usually bring food for parties, I use money in my food category to pay for most party expenses. Birthday parties are our biggest party expense, and we budget for them as part of the birthday, so I don’t have a party budget category, but that would be a great idea if it is a regular expense for you and if it is a substantial amount.
    Christmas and birthday parties are easy to predict because they are always on the same day. A lot of parties are annual parties. However, parties like weddings are fairly predictable in some ways, but the timing isn’t always predictable.
  2. Which of these parties do you plan on hosting or attending this year?
    *Birthday Parties
    *Super Bowl
    *Easter
    *Halloween
    *Christmas
    *New Years Eve
    *Dinner
    *Baby Gender
    *Baby & Wedding Showers
    *Weddings
    *End of school
    *What other parties do you attend?
  3. What expenses will you have in conjunction with each party? Budgeting always starts with what you know. If you have those parties annually, how much did you spend on it last year? This gives you an idea of what to budget this year.
    Decorations can cost a lot or a little. I have a friend who is very talented at making decorations. She made decorations with cheap materials from the dollar store. She makes party games with household items. She can do great parties on a small budget. I don’t like to spend a lot on decorations. I value great food rather than great decorations. Food costs can also range. Are you planning on catering the party or making the food? What about presents? Many of the parties I attend have some kind of present involved.

Parties are a great way to enjoy life and make incredible memories. Budgeting for these parties will help make them successful and allow you to party on without regrets!

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