One of the things I’ve learned since becoming a mom is that moms are great at budgeting. It doesn’t matter what income level your family has, or who brings home the bacon. Moms are great at controlling the purse strings and making sure that whatever the family needs is accounted for. Right?
While learning how to budget is an incredibly useful skill, I believe that families these days need to do more than just budget for their daily expenses. Young families especially get caught up in the present. Don’t get me wrong—that’s never a bad thing! But it’s also important to start saving and thinking about the future, at a time when it’s easier to do so.
I worked in a bank for three years before becoming a full-time mom. I am very grateful for the knowledge from my coworker moms. They taught me life-saving, basic money tips on how to put away some funds for the future.
Putting away some money for a rainy day isn’t necessarily a mom’s job. In fact, whether you have a child or not, as long as you have some sort of income stream, you should already be putting away a little bit each month. And once you have some savings, you can then think of ways on how to grow what you have so that your money works for you.
If it all seems a little overwhelming, small steps are a very good place to start! Being money-smart isn’t just a one-time thing; it’s a skill that you can build by sticking to easy habits. After a few months of sticking to these money tips, you’ll find yourself thanking your past self. Here are some of my tried-and-tested financial planning and money tips to help you become a peso-savvy mommy.
Strictly budget your expenses.
There is a well-quoted saying that you should live within your means, and I completely believe this. If you haven’t started yet, make a list of your monthly expenses, and make sure you stick to this budget. There are a number of ways you can do this, like using an app, keeping a small accordion file to track your expenses, or even simply making a list and sticking it on the fridge for everyone to see. Write down everything you spend in a month. This makes it so much easier to see what you can minimize spending on.
Budget wisely. Yes, this means sacrifices need to be made. Eat out less, shop less, spend less. Set aside your cash in clips or envelopes labeled with all your expenses: food, gas, milk, etc. Being mindful of what you spend on helps you see what you can cut back on, and possibly increase what you can save at the end of each month.
Save 20% of your pay.
There are actually a lot of ways to divide your money to have a portion for savings. A good place to start, especially if you already have a family, is to save 20% of what you earn. Remember, though: you need to force your savings. It’s not a good idea to think that you can save what is left over from your salary after you have paid everything off. By making sure that 20% is taken out before you plan out your month, you are ensuring that you have the beginnings of a growing fund. Automatically transfer these funds to a separate account every month, so that you are less tempted to spend it.
Make financial goals and work towards them.
Hey, if you’re not yet comfortable investing in stocks, then don’t! Instead, evaluate what you have now. Do you have a savings fund? Do you have an emergency fund? Do you have an investment fund? These three things are different from each other but are incredibly useful in helping you have some peace of mind. If you don’t have an emergency fund yet, work towards that. Set a goal amount you want to have in each fund. If you have savings and a rainy day fund, work on your investment fund. Keep these separate because there are times when you will need to touch your savings, but it shouldn’t affect your emergency fund or investment fund. Remember, starting early means you can lay more groundwork, and it won’t be so harsh on the pocket, either.
Make your money grow.
Once you have a sizable investment fund, talk to your partner and consider options where you can make your money grow. This money tip highly depends on how comfortable you are with investing in various instruments. A good place to start is with insurance plans or mutual funds. Insurance plans these days don’t just cover life, they even have educational plans which are helpful to help store away tuition money for the future! You can talk to a financial advisor who will help match your risk appetite. For those who have a higher risk appetite, you can try investing in stocks or bonds.
Don’t put your eggs in one basket.
Diversify your investments! Don’t just keep all your money in the bank because you think it’s the safest. At the same time, don’t put all your money in stocks because it has the potential to grow fast. Instead, allot a portion for each financial plan that appeals to you and monitor its performance. Depending on how well it does, you can add more money to it, or pull out your funds and put them somewhere else.
Of course, being peso-savvy doesn’t mean sacrificing fun with your family or your partner! Have the occasional vacation, date night, or fun family outing! Good financial planning means being able to balance your present while building a great foundation for what is still to come.
Do you have other tried-and-tested money tips for saving and investing? I’d love to hear from you!