One of the top concerns for Grandparents raising grandchildren is how to manage finances.
Many caregivers are also caring for grandchildren, either part time or full time. Adjusting to caring for a grandchild can be demanding enough, but when you add in the fact that you are most likely going to become their sole financial support can be downright frightening.
Budgeting can be overwhelming for anyone, so the easiest way to approach this issue is to break it down into small, manageable steps. There are numerous charts and software and all kinds of things that are available to help you, but all you really need is a notebook, pencil, and calculator.
Once you have these tools, sit down and write everything that you spend money on in a month. The important word here is EVERYTHING! We often don’t account for those quick coffees or magazines or other convenience items that add up quickly to zap your available dollars. You need to know and understand exactly where your money is going, every penny of it. This may take more than one sitting, because you may have to track your expenditures for a while, possibly an entire pay period. Here are some tips to help in your organization:
- Keep all of your receipts
- Make columns on your paper and label them with different categories – i.e. rent or mortgage, car payments, utilities, groceries, and so forth
- Minor expenditures can be included in a column labeled “miscellaneous spending” but this may be your most important spending to track. Keep a separate log with you at all times!
- With expenses that vary (such as utilities), always round up the amount, giving yourself some “wiggle room” of a cushion as you try to total expenses.
- Once you have accounted for every dollar that you spend in a given period of time, it’s time to split your available funds to cover your necessary bills first. As they are paid, keep track of them on your budget sheet. Start reducing those miscellaneous expenses. For example, if you’ve been spending $50 a month on entertainment, see what you can do to cut that cost.
Budgeting takes discipline – but it’s well worth it. Yes, it can be time consuming but isn’t it worth it if you can lower some stress by prioritizing expenses? You may find you have funds for things you didn’t think you could afford. The money that you have saved can go toward paying for your grandchild’s expenses, paying down debt or setting aside additional “rainy day” funds.
As difficult and overwhelming as budgeting can seem at first, it can also open your eyes to behavior changes that you can make for yourself and your family. By changing your mindset and attitude toward money, you are actually giving yourself a tremendous boost in controlling your money instead of the other way around. And remember those young people are watching you and learning how to manage money.
And the best news is the longer you do it, the easier it becomes. It won’t be long before your budget has become your habit. And with your spending under control, you’ll be well on your way to caring for your grandchildren and meeting your financial goals.
For a sample budget, see templates provided by Microsoft Office. Visit this link for a downloadable form to handwrite or type onto.
Edited by Zanda Hilger from original document written by Pam Brandon for a special grandparent program sponsored by our program. This article includes information from SourceFinancialWeb.com