Getting Started and Fixing Finances

[kathy73]

Spending

My daughter just turned 18. She has an interview on Sunday at restaurant near our house. I agree that she should get a job and make some money for herself. It is true that she looks at things differently when she has to pay for them.

[snafu]

I wonder if you've explained your serious financial circumstances to 18 y/o daughter. It really helps to offer a visual like a large hand drawn chart showing income on one side and all the debt on the other. Our children need to understand money management and being involved in household cash flow/budget at their level of understanding is a good exercise of their math skills and life experience. Santa doesn't live in your house and wishes aren't fulfilled by the tooth fairy.

Presuming daughter goes to school, I'd work with her to figure out sums needed for non discretionary expenses like transportation, school costs etc. She will need to generate earnings for cell phone, her share of car insurance & operation, restaurants & fun. Better she taste reality now by taking lunch to school, figuring out how many hours she needs to work to buy the desired clothes and discretionary stuff that's so important to teens as example.

If you think that's hard on DD, it's w-aaay harder on mom having to stick to that plan.

[kathy73]

DD Spending

I'll put together a very simple income/expenses chart for my daughter. She has a general understanding of income and expenses, but it would probably be helpful to have a visual reference.

Thanks!

Kathy

[fathappycows]

Budgeting help

Sounds like you are on the right track here Kathy. Some great advice from the others. It's a common problem that people have to not have money at the end of the pay cycle, and for bills coming in. We tend to spend right up to our income, no matter if that is $2000 or $200'000. As a simple budgeting template, you and your daughter might try this: Open up some new bank accounts. On the day you get paid put aside some money into each of these accounts.
These accounts are for:

Savings
Emergencies (and bills you forgot to account for)
Periodic (not monthly) bills
Regular bills (including debt reduction)

The rest of your money can be spent guilt free. Even though you probably think the savings account could be put to better use elsewhere, I suggest you still put a little away, even if its just $10. It could make you feel like you are getting ahead instead of just surviving.

When you get your bills in, pay them out of the allocated accounts. I have worksheets for each of these if you are interested.

[kathy73]

Worksheets

I am absolutely interested in the worksheets you have if you are willing to share.

Outting money aside in different accounts is a great idea. I am going to try to get my daughter her own account at my credit union so she can have a debit card and begin to establish a good credit history.

Kathy