Budgeting for Busy Parents
Published on: October 10, 2021
Ever been on a scramble for funds to cover unforeseen expenses? Or you just can’t figure out where the last ฿100 went to? If you feel you should start budgeting or want to learn how to budget better, this article by Jex Leigh Roach is just what you need.
By Jex Leigh Roach
Money affects almost every aspect of our lives, yet many families find it difficult to manage their personal finances. Taking care of the kids, running errands, keeping in touch with loved ones, finding time for our spouse and ourselves—it is easy to feel too busy to make time for budgeting. However, with some simple steps, you can build a strong financial foundation that will benefit your whole family.
One of the best ways to improve money habits is to create a monthly budget. Many people think of budgets like diets. They list all the things they can no longer buy or eat. However, your budget should have categories such as travel, dining out, entertainment, BAMBI playgroups, and a discretionary amount for each person to spend on their hobbies. Just like a nutritious meal plan with healthy desserts, creating and following a budget that caters to all such expenditures can leave you feeling happier and more rejuvenated. You are likely to have better communication with your family members, less stress about spending, and more money to save for bigger goals. And a bonus—your kids will pick up good financial habits, too!
You can search online for a budget template or app, or even just use a pen and paper. Start by figuring out your monthly net income, sometimes referred to as your ‘take-home pay’. Next, plan how to spend or save that money. You should have a plan for everything and give each baht a name. This is called a zero-based budget—there is zero money left without an allocated ‘job’. Some ‘jobs’ will be to pay monthly household expenses, such as rent, electricity, water, groceries, and phone bills. Some ‘jobs’ can be for long-term savings, such as retirement, education, a new vehicle, or future travel. Others—and these can be the tricky ones to manage—are the short-term, irregular expenses.
Most people have some expenses that are not due monthly but need to be paid at other times in the year. For example, some insurance premiums are paid annually, some bills are paid quarterly, and international school tuition fees are often due by the start of each term. Even though these expenses occur at irregular times, you can still save for them each month using a technique called a ‘sinking fund’. A ‘sinking fund’ is a short-term savings goal for known or expected expenses. If you pay ฿15,000 for car insurance every September, then starting in October, you can save ฿1,250 per month towards that bill. Next September, you’ll have the full ฿15,000 sitting in your bank account, ready to be paid. This prevents the stress of having to find a large amount for an expense that could have been planned for. Many people express a sense of relief that the money is already there as well as a lack of worry that they won’t have enough to pay all their other bills. Other common examples of ‘sinking funds’ are school tuition, medical expenses (you might not know when you’ll need medical care, but it’s very likely that someone in the family will at some point), holidays, birthdays, and travel.
Some people try to track and categorize every expense they make. This can be tedious and time-consuming. Not just that, looking through every bank and credit card statement and trying to remember where a ฿40 expense went at the market can also be exhausting and frustrating. In such cases, you can use a cash envelope system. For example, if you budgeted ฿25,000 for groceries this month, put ฿25,000 in an envelope labeled ‘groceries’. Then every time you go grocery shopping, pay from this envelope. There is no need to track how much you’ve spent during each trip because if there is money in the envelope, you can spend it. This way, you will find that you have saved significant time and energy for other things like playing with your kids or relaxing with a nice cup of tea!
The easy part is writing down your spending plans in the budget. The harder part is following the plan. Every month will be a little different, depending on holidays, irregular bills, travel, special occasions, emergencies, and so on. For most people, there is no such thing as a ‘normal month’. Each month can bring with it some unique expenses, either planned or unexpected. As you gain more experience using a budget, you’ll start noticing trends and become more and more accurate in your plans.
Photos from Canva.
About the Author
Jex lives in Bangkok with her husband and two daughters who are 4 and 2 years old. She has a Master in Business Administration degree and has studied personal finance since 2011. As the owner of Jex Leigh Financial Coaching, she helps individuals and families create better financial habits so they can achieve their dreams. You can visit her Facebook page at: https://www.facebook.com/jexleighfc.
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