Every kid dreams of being a thousand things at once. Ask any child who they want to be when they grow up and you’re likely to hear a list ranging from astronaut or a doctor to musician or being the best robotics engineer on the planet (read: Tony Stark). Fortunately as a parent, you have the opportunity to shape your child’s potential at an early age.
Aside from sending them to school, children can also benefit from short courses that are usually offered during the summer. These classes allow kids to enhance their talents and skills while having fun. Some of the most popular workshops focus on cooking, fine arts, theater, sports, foreign languages, even robotics design and engineering. However, most of these educational programs also come at a hefty price. To help you manage your finances to include your kid’s summer program, here are some useful financial tips:
- Determine your financial goals. Establish your short and long term financial targets. Short term goals refer to how you need or want to spend your money at the present time. This usually includes rent, utilities, monthly amortizations, kid’s education, groceries and other household needs. Long term financial goals cover retirement, investments or family vacations. Financial goal setting can serve as a guide while drafting your budget.
- Know what you spend. Everyone has a general idea of their monthly expenses. Get a clearer picture of where your money really goes by gathering all your receipts and expenses for an entire month. This method will determine if you are spending too much on discretionary items like a coffee fix twice a day rather than pre-set expenses such as rent or utilities. Once you have identified all your expenses, you can decide which items are easy to eliminate.
- Take note of incoming earnings. Aside from making a rundown of your outgoings, it is also advised that you make note of all your earnings or income. Don’t forget to record unexpected bonuses or cash incentives because these will help you meet the monthly budget. Don’t be discouraged if your income falls a bit short compared to the expenses you’ve identified earlier. This issue can be addressed once the budget is prepared.
- Set a budget…and stick to it. Once you know what you truly spend on and how much money you receive each month, you can sit down and calculate how much can be allocated for utilities and other immediate needs, savings and even discretionary or luxury expenditures. Commit to your budget. An effective way of keeping track of each month’s budget is by preparing “the envelope system.” This entails setting aside money inside individual envelopes for each item identified in your financial plan. For instance, there should be an envelope for electricity, water, groceries, rent, car amortization, kids’ summer classes etc. Once you’ve set aside the money, do not spend it on other items.
- Track your progress. Monitor your income and expenses for several months to see if the budget you have prepared is working. Don’t be surprised if the financial plan you’ve set needs some tweaking from time to time. There’s a chance you overlooked incidentals such as unexpected hospital bills, home repairs or rising fuel costs. Just go over your plan and modify your budget.
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