The budget battles in Congress may pale in comparison to what’s taking
place inside the typical American household. More and more families and
individuals are searching for better ways to stay out of debt, meet their
financial obligations and stretch their income. One Salt Lake family with
three children has such a good plan in place that has worked for them.
Sara Parker from Utah Central Credit Union shares their ideas.
It’s simple, has built-in checks and balances, and more importantly, the
kids are also on-board.
Here’s their formula:
1. Every payday take out enough cash to cover expenses for two weeks
and physically place the money in envelops. This immediately establishes
money as tangible and real, rather than something plastic or a Monopoly
game board gimmick.
2. Whatever’s left over from the two-week distribution gets put into
“occasional” envelopes, like a night at the movies, a ski day, dinner out, or
food, grooming and vaccinations for the dog.
3. If one of the “necessity” envelopes runs out of cash before the two-
week period is up, keep a slush fund handy to make up the difference –
especially if it’s something vital like food. Otherwise, wait until the next
payday.
4. Establish a “pay first” strategy (savings, charity, mortgage, car loan,
etc). Which items are absolute “musts” that need to be paid without fail?
Make sure they are always covered.
5. Create a strong savings and make regular deposits. This is essential
not only for emergencies but long-term projects like remodeling,
vacations, college and retirement. For example the Salt Lake family has a
vacation change jar.
6. Downsize whenever possible. The family turned in their Lexus for a
Honda Civic – to off-set rising fuel prices and leave more money for other
things, like camping vacations.
7. Get the kids involved in their own future goals. For example, all three
boys in this Salt Lake family have college savings accounts that the boys
themselves contribute to. They also get allowances that teach them the
value of money.
One thing that can wreck a budget is instant gratification and selfishness. If
you see something you want, wait three days. If you still want it three days
later, check three different stores for competing prices. Don’t forgot to
stash away a little “mad” money.
For more information or financial help, contact a Utah Central Credit Union
branch near you. You can visit them online at https://www.utahcentral.com/
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