I warned you! This blog is a place where I am going to share my ups and downs; so here it comes more domestic! 🙂
Back to my domestics (ha ha!) I am not an accountant but I know my outgoings, income and how much I should be saving towards a raining day or retirement. I think it is a valuable guidance to start while they are young in a hope that they will follow through in adulthood.
Mum and Dad would like to teach you to deal with money wisely and independently to help you in your adult life.Each item in the budget must pay for or set aside is called an expense. Every budget has two types of expenses: fixed expenses and variable expenses.
Fixed expenses occur each week, and the amount of these expenses generally remains constant from week to week. Examples of fixed expenses are:
- Savings allocation
- Donations to charity
- Telephone bill (arising on a monthly basis)
- Transportation costs (bus fare, gas for the family car)
Variable expenses are the opposite of fixed expenses. These are also referred to as flexible expenses because they aren’t rigid. In some weeks, variable expenses may not even be there. For variable expenses, make an estimate of what they might be.
Even though they may not be the same each month, it’s a good idea to provide a certain amount for them on a regular basis. Then, if they don’t arise in a certain month, that money can be set aside (accruals). These set-asides will accumulate and be used later when the variable expense comes along.
Examples of variable expenses are:
- Entertainment costs
- Gifts for relatives
A budget isn’t carved in marble. It’s something that can be adjusted when needed. In fact, the budget should be completely made over at certain times.
- When income increases. If you get a bigger allowance, you will have extra money to plan for.
- When expenses increase. As spending responsibilities are shifted to you, you will have to budget for them accordingly. For example, if you are the one to pay for your mobile bill, then you will have to manage your money by putting these items into your budget. Spending responsibilities typically increase with your age. For example, if you want a special pair of shoes and mum and dad won’t buy it, you will have to adjust your budget to expand your savings so that you can accrue accordingly to be able to buy the pair of shoes yourself.
So my friends I feel I have to review that chat but before I do so I would appreciate your comments and advise on how to monitor and track the expectations set to kids. I dont want to just give them the money for them to feel spoiled or that money is easy and not earned.
This blog should be the perfect place to leave your comments in but I am not good at IT (hands down) and have little time to dedicate to it currently does not have the ‘comment’ functionality :-(. Thus I would appreciate your comments/advise by email: email@example.com. I will in return publish the responses and my revised strategy!