Build a Realistic Budget as a Working Mom: How to Save Money and Take Control of Your Finances | INVESTEDMOM
As a working mom, creating a realistic budget can be a challenge. You have to balance your monthly expenses, emergency fund, retirement savings, and personal loans, all while making sure you have enough money for unexpected expenses. But with the right strategies and mindset, you can create a budget that works for you and your family.
In this article, we'll explore some tips and strategies to help you create a realistic budget as a working mom. We'll take a more traditional approach, then explore the flipside - a more relaxed approach to budgeting. There's a solution here for every Mama!
Calculate Your Fixed Expenses
The next step is to calculate your fixed expenses, such as your mortgage or rent, property taxes, car insurance, and health insurance. These are expenses that stay the same each month, so you can plan for them in your budget. Make sure to include all your living expenses, such as groceries and utilities, in this category.
"Research shows that the average household spends around 33% of their income on housing, and 17% on transportation. These are fixed expenses that you need to budget for, but it's also important to keep an eye on your variable expenses." - Megan Robinson, DollarSprout
Track Your Variable Monthly Expenses
Variable expenses are those that change from month to month, such as entertainment and clothing. To budget for these expenses, track your spending for a few months to get an idea of how much you typically spend in each category. Then, set a monthly budget for each category based on your spending habits.
"According to a recent study, only 30% of Americans have a long-term financial plan. By creating a realistic budget, you can take control of your finances and start building wealth for your future." - Ryan Ermey, Kiplinger
Use a Zero-Based Budget
A zero-based budget is a budgeting process where all of your income is allocated towards expenses, savings, and debt payoff. This means that at the end of the month, you should have zero dollars left over. This can be a very effective budgeting tool for working moms who want to take control of their finances, because it forces you to account for all of your expenses and make sure that you're not overspending in any one category.
Plan for Unexpected Expenses
It's important to plan for unexpected expenses when you're creating a realistic budget as a working mom. This means building up an emergency fund and being prepared for things like medical bills or unexpected home repairs. By planning for these expenses, you can avoid going into debt for unexpected expenses and stay on track with your budgeting process.
"According to a recent study, the average American spends over $300 per month on non-essential items like dining out and entertainment. By tracking your spending and making adjustments to your budget, you can save money and put it towards your financial goals." - Erin Lowry, Broke Millennial
Review Your Budget Regularly
To make sure that your budget is effective, it's important to review it regularly. You can do this by tracking your spending on a regular basis and comparing it to your budget. This can help you identify areas where you're overspending and make adjustments to your budget as needed.
7 Budgeting Tools Every Working Mom Needs to Manage Their Finances:
Mint: This popular budgeting app allows you to track your spending, set up alerts for bills and payments, and monitor your credit score.
YNAB (You Need A Budget): This app helps you create a zero-based budget, meaning that you allocate all of your income to specific expenses or savings goals, with the aim of having no money left over.
PocketGuard: This app helps you stay on top of your spending by automatically categorizing your expenses, setting spending limits, and tracking your bills and subscriptions.
Goodbudget: This app uses the envelope system, where you allocate cash or virtual "envelopes" to specific budget categories and track your spending against those limits.
Personal Capital: This app is geared towards managing investments and retirement savings, but also includes budgeting tools and alerts for your bank accounts and credit cards.
EveryDollar: This app is based on the principles of the 50/30/20 budgeting plan, and allows you to track your income and expenses and set up a monthly budget based on those ratios.
Honeydue: This app is designed for couples who want to manage their finances together, and includes budget tracking, bill payment reminders, and shared access to accounts and transactions.
Money-Saving Mama FAQ:
What's next?
Creating a realistic budget as a working mom is an important step towards taking control of your finances and achieving your financial goals. By starting with your monthly income, calculating your fixed and variable expenses, setting up a savings account, using a zero-based budget, planning for unexpected expenses, and reviewing your budget regularly, you can save money and build a more secure financial future for you and your family. So, start budgeting today, and don't forget to celebrate your progress along the way!
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