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Managing your finances is something that every family strives to do. I think in these times it is especially hard since so many people are out of work. Even Bill’s company has done layoffs, and they weren’t based on seniority. It is definitely a time that puts everyone on edge, because from day to day, you don’t know if your husband, your friends, or if your other family members are going to keep their jobs.
That being said, there are certain things you can do to help manage your finances. Something that has worked well for my family is that we hid money from our ourselves. I use a program on my computer to balance my checkbook. What I have done is that for our savings account on there, I’ve created “fake” accounts. For example, I have a “Christmas/Vacation Fund”, a “Tuition” fund (this pays for Madison’s Catholic school tuition), car insurance fund, homeowner’s insurance fund, and even a “TV” fund. I know, what’s a TV fund. We don’t buy big ticket items (like Bill’s big screen tv that’s downstairs) without having the money first. What we do is hide the money in our savings account and take the free financing. In the meantime, we are collecting interest on this money (plus it is available to use in an emergency situation).
Something else we do is charge everything. I know — you are screaming “WHAT!!??!!”. The key to this is being able to pay off these credit card charges every month. The reason we charge everything we can is because 1% of whatever we charge is taken off the principal of our mortgage. We do nothing — it automatically gets transferred there in $25 increments. This is better than any cash back or point system we’ve ever used. We slowly are paying down our mortgage doing something that we would have done anyway. We even charged the new siding we put on our house last year!
Every family has to do what works for them. Not everybody is able to hide money from themselves and NOT spend it. We are able to, and that has helped my family manage our finances. What do you do?