The Dependent Care That Matters – Part 2
How can I take stress and struggle out of expenses incurred by having children?
You have to admit that having children brings additional expenses to one’s budget. Pamela and I wanted to take the struggle and stress out of having these additional expenses. You see some expenses are unavoidable, like childcare. If you’re not one of the lucky ones who can afford to have one parent stay home to care for the kids, then you have to incur childcare expenses as a part of your finances for dependent care.
Let’s address the problem head on. Daycare, summer camp, and school tuition are large expenses. In fact for us, these expenses (on purpose) are larger than any auto payment we’ve ever had or currently have. This means they can easily get out of control if you miss a payment. This was problem #1, how can we avoid missing a payment of this magnitude. Problem #2 that we wanted to address was, even if we were able to control the large expenditures, how could we better handle the miscellaneous ones? You know those occasional ones: new shoes, fees, field-trips, sports activities, etc.
How to avoid missing a payment?
I did a post a while back called “Budgeting Starts With Separating.” In this message we discussed, setting up different bank accounts to segment budget items. Using payroll deductions and a separate bank account, we made paying our largest dependent care expenses less stressful. In fact, we took the struggle and stress away and never have to really think about it.
It began with a plan. Here’s the process:
- Identify the problem.
- Stop the excuses that there’s nothing you can do about it.
- Think outside the box and ask how can you make this problem go away.
- Begin to implement a solution that you can manage.
- Be willing to tweak the plan as the 1st solution may not be the final solution.
How to handle the kid’s miscellaneous expenses?
After you become a student of your finances, you’ll begin to notice some recurring categories in your finances. It’s best to look year over year. We set a category for the kids. This way at year end we know what we can expect at a minimum for the following year. Looking at a year’s worth of expenses, allows you to see the recurring annual expenses easier than trying to rely on memory. The biggest benefit is you’ll never again be caught off guard by the same expenses. Handling the miscellaneous expenses begins with a plan.
Here’s the process:
- Identify all the expenses you’ve had over a year for your children.
- Take the sum of these expenses and divide by 12 for a monthly figure. This sum will probably surprise you. Once you have the monthly figure…
- Set up a process to move the monthly figure to a special or separate place.
- Use this place you’ve setup to issue payments for your kids expenses when they occur.
Having a plan is best approach to take if you ever want to have the life you’ve always wanted.
Today is Friday!
Take the stress out of your dependent expenses with a plan. If you’re going to have stress, don’t let it be over large expenses like daycare, summer camp or school tuition, but rather place the stress where it’s more manageable. Your life is your business and you can manageable it with a plan.