MOM-enomics with Booth Parker, CPA

Enjoy this replay of one of our early episode, Top 10 Budgeting Tips. MOM-enomics will be releasing biweekly for now and we invite you to follow The Carolina Women's Collective Podcast, launching April 15 and available whereever you listen to MOM-enomics!

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  • (00:00) - Replay: Top 10 Budgeting Tips
  • (00:15) - Introduction: Tips for Family Budgeting
  • (00:45) - Tip 1: Assess recent spending
  • (01:34) - Tip 2: Give every dollar a job
  • (03:05) - Tip 3: Establish priorities
  • (04:06) - Tip 4: Check your percentages
  • (05:39) - Tip 5: Communicate with your spouse
  • (06:22) - Tip 6: Review weekly
  • (06:50) - Tip 7: Make a meal plan
  • (07:21) - Tip 8: Plan for non-monthly expenses
  • (08:17) - Tip 9: Reduce and avoid credit card debt
  • (08:40) - Tip 10: Create savings goals
  • (09:33) - Outro

This podcast is produced by Rooster High Productions: https://www.roosterhigh.com/

Creators & Guests

Host
Booth Parker, CPA
Financial guru by day; domestic diva by night and sharing it all in between.

What is MOM-enomics with Booth Parker, CPA?

Real moms. Real mom financial issues. Real moms in business. Real stories. I am Booth Parker. A CPA, wife, and mom that loves all things home and family. In this podcast, I talk all things money for moms, families, and small business. From tips to ideas to info you just need to know, I break it down so moms can apply it to their own families and businesses!

Replay: Top 10 Budgeting Tips
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If your budget is in need of a revamp, or maybe you haven't been budgeting at all this episode will help get you on track.

Any time is a good time to start budgeting and creating one that works for you and your family. Inflation has greatly changed the landscape of family finances, and a budget is more important than ever. So here are my top 10 budgeting tips.

Number one, do an assessment of the last few months of spending so that you know where your money has been going.

Are you spending more than the income you're bringing in and actually creating [00:01:00] credit card debt? Are you paying for a subscription that you never use and could cancel? A lot of people are paying for subscriptions that they do not use, so that is definitely one to check. Knowing where your money has been going is essential to creating an accurate budget. Because if you think you've been spending If you spend $600 a month on food and it's actually $1,000 a month, then you know that there's other areas of your budget that probably are going to need some tweaking

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So let's go on to tip number two. To create your budget, you need to assign a purpose for every dollar of your income. So you want to take that take home income number, and then when you've allocated a purpose to every dollar of that with your expenses, you want to get to zero. You don't want to be negative because that means you're going into credit card debt or some form of debt, [00:02:00] but you want to assign a purpose for every single dollar so that it is being useful to you and your family.

So if you have like a salary type job, you know your after tax income, it's pretty straightforward of a process. But if you have what's called an irregular income, maybe a commission, uh, on top of a base pay or something like that, then plan for the worst to cover the essentials and then have a plan for any additional income you earn and those commissions and things like that so that that commission is used in a very smart way towards either paying down debt or saving, anything like that.

Additionally, if you are paid weekly, you want to plan that monthly budget off of four weeks of income. There will be a few months during the year where there will be an additional week of income, so you want to have a [00:03:00] plan for that money, ideally putting it towards debt or savings.

Number three, prioritize your necessities.

These are your essentials. So, there are four expenses, often called the four walls, which is your home, transportation, food, and utilities, that you've got to prioritize those. Those are absolute essentials. And then after that, you'll prioritize your saving, debt payment, giving, and then miscellaneous type spending into that budget. So food is both an essential and a non essential. So you want to prioritize the essential, like your groceries, and then if there's room in the budget, maybe add in some non essential food, such as eating out once or twice during the month. If you have a lot of debt, you want to get it up there in the priority.

Uh, and then you also want to prioritize an [00:04:00] emergency fund if you don't have one. So an emergency fund is really key to have as well.

Tip number four, know if your category percentages are on track. So there's a link in the show notes to my blog where there's a little more detail on this um, so that you can visualize it.

But the main categories here, like your house. 25 percent of your budget is what that number needs to be, and that includes insurance, property taxes, HOA. If it's over 30%, it's getting really high. Transportation generally needs to be 10 15 percent of your budget. If you have a car payment, it could be higher, and that car payment actually may be getting that percentage too high.

Your food, this is your essential food, maybe one or two eating outs, okay, 10 to 15 percent of the budget. Utilities, about [00:05:00] 5%. And then you're going to start putting in your saving and your debt pay down, about 15%. Giving of 10%, if that's your thing. The other things to think about here though, if you have to buy your own health insurance, It's going to take up a big percentage of your budget compared to people that have it employer provided.

So if that is an item in your budget, you definitely need to make sure you've got room for it in those percentages. Additionally, if you have expensive child care, things of that nature, that is going to take up a percentage of your budget that's going to have to come from another category.

Tip number five, be on the same page with your spouse.

So do your budget together, review it together, be honest with each other about your spending. Money does cause a lot of marital issues, but you don't have to let it. Communication is [00:06:00] key here. And there may be a lifestyle change getting on this budget and prioritizing certain things. So give each other some grace as you make these changes in your life.

Additionally, if you're single, maybe you need a friend to help hold you accountable, but get someone that's going to support you in these changes in your spending choices.

Number six, review your spending weekly to keep it on track and adjust for any unexpected things that may pop up so that your total budget doesn't go over.

Your budget's going to change month to month. It is not set it and forget it. So stay on top of it. Plan the big items at the beginning of the month and get them checked off.

Tip number seven. Food is a common category to overspend. Make a meal plan, eat at home, [00:07:00] eliminate food waste. Not only does that meal plan save you money, it's less stress in the evening. So I'm a real big stickler on this one. And if you do really want to eat out, add it into your budget. Don't pretend like that expense doesn't exist. Just recognize it and account for it.

Tip number eight. Plan for quarterly and annual expenses in your monthly budget. We're talking vacations, a Christmas, all of those kind of things. Prepare for them. throughout the year so that they're not an unexpected, well they'd be expected, but a large expense that you end up putting on credit card or something like that.

So if you budget for it throughout the year, you're going to be able to pay for it in full when it occurs. Home repairs are another one. If you know that you're going to need a new roof in the next year or two, go ahead and start [00:08:00] saving for that expenditure. And also your tax refund. If you get a tax refund every year, make a plan for that money.

Just go ahead and say it's going straight towards debt pay down or it's going straight to savings. Do not let it be a shopping spree.

Tip number nine. If you have credit card debt, cut them up and prioritize paying off the debt and only use cash or a debit card throughout this process. Credit cards can regularly tempt you to overspend, so if you're in that category, go ahead and get rid of them so that they don't wreck your budget.

Tip number 10. Create savings goals. Make a priority list of what you're saving for. Remember that emergency fund? You need to have three to six months of expenses in that fund. That should be first and foremost. If you have that, then you can start focusing on other [00:09:00] things. Maybe you're saving for a down payment on a home, starting to save for retirement, maybe you have kids to save for, for college.

So these different categories all have different savings tools, such as savings accounts, maybe an IRA, 529 plans, so you need to create different goals for them and a priority list of saving towards them. And of course, track your progress to make sure you're staying on track with those goals that you're trying to achieve.

So I hope this helps create your budget and keep it on track to reach your financial goals. These are just some helpful little tips to just think about throughout the month as you're spending and doing your budgeting and all of those kind of things just to Achieve those goals and keep inflation from wrecking your budget, because if you don't go ahead and account for the increases in some of these prices, they will wreck your [00:10:00] budget.

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