My father had a habit of sitting me down for hours to have father-daughter bonding time. These were always one-sided and ended up with my eyes glazing over while I listened to him try to relate to me through stories about his youth. The only way I got free was if the phone rang.
The one conversation I do remember clearly is when he showed me how to create a simple budget to manage my monthly expenses. I carried this skill with me through university and into my adult life. It evolved from chicken scratches on the back of an envelope to software programs back to a simple accounting book. I prefer the accounting book that lets me look at my entire month all at once and make adjustments more easily. I am sure software is more efficient but call me old school I just prefer it paper-based.
I started this habit when I was a single mom and had to manage a household for 6. My greatest fear every month was that I wouldn’t have enough money to pay rent or buy food,which clearly became my greatest financial priorities. I’d list all of my income and all of my expenses. I’d go through my expenses in order of importance and subtract them from the income. I’d pay up everything that I could before I got to $0.
My expenses in order of importance were:
-insurance and gas (for my paid off vehicle)
-clothes and so on.
I’ve grown a lot since that chapter in my life and today I am blessed to be in a better financial position. I still use this simple system so I can see what I have coming in and control what is going out on a monthly basis. I am proud that I know that I spend an average of $120-$150 on grocery for a family of 7 per week. I also have great insight into how much I can spend as I go along on a daily basis for spontaneous purchases like lunches or school fundraisers. I keep a running tab in my head that I usually cross check weekly to make sure I am on track and now can budget for other purchases like business equipment and marketing campaigns!