Article Written By Ellen Rich, Holistic Life Coach and Founder
“The budget is not just a collection of numbers, but an expression of our values and aspirations.”
~Jacob Lew Read
People have different approaches to money. Rich or poor, perception of money changes with context. Each financial group from billionaires to the homeless evaluate groups they are not a part.
Family and culture play a huge role in how you approach money and budget. A large family that lives together may need less money and can stretch a budget. A single person living on their own, however, may not be able to do this as well. Money and budgets are not good or bad. The key is determining what you have now, what resources will come into your possession, and lifestyle.
Whomever you are living with, someone or living on your own, you need to decide how money is consolidated or kept separate from others. Expenses are split and money allocated depending on each person’s contribution and perspective. Bills need to be paid and a monthly budget plan put into place.
Debt: most of us use it.
Many people stretch their lifestyle by borrowing money (banks, friends, family, investment accounts and credit cards). * closed parentheses added. There is always a price to pay for borrowing money. The budget may be met, but the emotional price and financial impact depends on your particular situation. Emotions can (fly) RUN HIGH when discussions about income, spending and debt arise.
Danger, danger and more danger!
If you borrow or lend money, beware that the long -term outcome may not work out as agreed. I know of someone who lent a “friend” $1,000 and never saw it again. Even landlords or the tax collectors may impose rules on you that you didn’t anticipate. Think about what could happen and plan accordingly.
What is your money make-up?
How you view money can impact budget decisions. Even if your current situation looks strong, spenders and savers often clash. Situations can change (layoffs, death, illness, children, etc.).
Money usually creates financial “power” issues
This issue can be traced back to how much money you have and can impact issues that you never experienced. A loss of a salary can change the entire household. Additionally, your salary negotiations fall into this category. Applying for a loan or government financial aid also can impact you due to the loss of your power. Whoever has the money has the financial power.
Children are expensive. It is estimated by CNN.com that it costs $233,610 to raise a child to until they reach the age of 18. And colleges are very expensive? There are student loans, community colleges, trade schools and government subsidies. Your choice is based on your financial commitment to your child.
Sometimes children over 18 want to continue to live with you to reduce their expenses. You need to consider how much money you will use to support adult children. It can help if your adult children decide to support you or can contribute financially to the household. I became a caretaker to my mother for 8 years when she was in her 80’s. This impacted my job, working part time, salary, siblings and inheritance.
As your parents or elders age, their ability or desire to earn income falls. Most seniors may want to live alone, but can’t afford it. They may also be sickly and need help with healthcare and day-to-day activities. Outside, home health care is very expensive.
Where will your money going to go? Is it going to you, your household, relatives or parents? These decisions may impact your savings and lifestyle. The good news here is that your extended family may help you out in ways you never considered.
Communication is the key to financial challenges. Dealing with debt is essential in understanding your ongoing plans. Bankruptcy or wage garnishment may be just around the corner. If married you are responsible for your partner’s debt. Don’t shy away from pre-nuptial discussions or a contract when setting up a household with others.
Divorce is quiet common and over 50% of marriages are impacted. Without understanding the laws in your state, province or country, this can be devastating from a financial standpoint. Go online or visit a divorce attorney to find out what you may be responsible for. Good advice to keep you on top of your money is, “Never a borrower or a lender be.”
Why do I need a budget?
A budget is a plan that allows you to compare the amount of money you have with your expenses. Budgets can be developed for any time period, but a monthly review is a good idea to see if you are on track. Budgets are flexible and can be changed based on circumstances. Budgets are critical in making big purchases. They can help you decide whether to make a purchase or not. With budgets you remain “in the know” of your resources so there are no surprises.
Thank you so much for reading, much love
After working in the corporate world for 30+ years, Ellen started a Holistic Life Coaching program. Called act2.expert (www.act2.expert), it is a Holistic Life Coaching Program that allows the client drive the process in a safe and comfortable environment. Ellen has a BA, MBA, many certificates and has attended Wisdom of the Whole Coaching Academy.