As the back-to-school season approaches, it’s essential to pause not just for a moment but for days when couples discuss how to handle the upcoming new expenses on the way.
Congratulations to those who have already started this planning, especially if you’ve been following NomaDock’s articles on going back to school, which aim to prepare families for a new phase of financial planning as early as possible.
So, what’s the role of parents in budgeting when schools open their doors? How can they do it without affecting the family’s standards of happiness and mental comfort? It requires a few carefully considered steps. Let’s discuss them below.
There’s no escaping this step, even if it seems tiresome or challenging to accomplish. Sit down as a couple to record the numbers and the items you need for each of the following expenses, adding or removing items as necessary:
- Household Expenses: This includes all the bills the household needs, such as electricity, water, internet, and perhaps rent payments.
- Living Expenses: These are basic necessities, including food, clothing, cleaning supplies, and personal care products.
- Car Expenses: This covers purchase or lease payments, insurance, maintenance, fuel, and car washes.
- Emergency Expenses: This category includes medicine, doctor or hospital visits, and accidents (hopefully not!).
- Discretionary Expenses: Personal expenses, gifts, home renovation, and decoration costs.
- Savings Amount: Allocate at least 10% of the total family income for savings.
Now, let’s move on to the part that enters our budget annually and requires specific financial steps. Once again, sit down as a couple and make sure to check what items and things you already have at home and don’t need to purchase:
- School Tuition Fees: Ensure that the current school is the best choice for your children in terms of their comfort, education quality, and fees.
- School Uniform: It’s advisable to buy a comfortable size that your children can wear for two years.
- Backpacks: Buy a backpack for its durability rather than just its appearance or design, as it might wear out quickly.
- Clothing and Shoes: Purchase essentials only, especially if your child is growing quickly.
- Books: Consult with parents and friends to exchange books and try to find used books in good condition.
- Stationery: Buying stationery in bulk can cover the whole year’s needs and save money.
- Food: Avoid ready-made foods and prepare healthy homemade sandwiches of various types.
- Children’s Allowance and School Trips: Set a weekly allowance for your children and a small amount for two annual trips.
- Suitable Study Space: It’s important to set up a suitable table and chair for studying in a quiet room away from noise and the TV or guest rooms.
Determine Income to Evaluate the Two Budgets
In this step, the reason why the couple worked hard to determine the budgets in the previous two sessions becomes clear.
Now, you only need to subtract these detailed costs from the total family income, which comes from various sources:
- Job Income: Calculate the fixed income earned by family members.
- Freelance Work: Even though it may not be stable, calculate the monthly average from any other freelance work.
- Assets: These assets can yield profits from rent or serve as a base for any other freelance work.
- Investments: Whether it’s in stocks, joint ventures, or a bank account.
- Bonuses: Additional amounts earned from work or scholarships, or any special discounts you can take advantage of.
- Savings: We don’t recommend using these amounts for anything, whether it’s for entertainment, retirement, emergencies, or any other reason. But these savings remain an alternative solution when needed.
Following these steps, you’ll arrive at a result that enables families to assess their financial situation for the current school year in a thoughtful manner. Based on that, you can set the necessary steps to follow in the coming period.
For any inquiries about proper financial management, don’t forget to check NomaDock’s articles, searching for topics that answer your questions.