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  • These Money Tips Helped Me Run My Business and Home With a Little Extra for Myself

    There is no one-size-fits-all approach, but this mom's experience may help you manage your finances
    by Kate Yu .
  • PHOTO BY iStock

    Money is a tricky thing to bring up even in the most casual conversations. But because we don’t talk about it often enough, we miss out on sharing valuable strategies and tactics to manage our finances as best as we can.

    When I became a mom, I had to learn how to budget and track our money to the last cent because as our families and expenses ballooned, a small surprise spending here and there could derail us. Reconciling all the expenses and credit card statements was a chore I honestly HATED. But as I looked back — it has been 10 years — I could honestly say it was time well spent to plan and manage our spending.

    To be clear, I believe there is no one size fits all approach as all of us have different needs and situations, but I found below to be helpful when it comes to managing our finances.

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    Here are five tips to help anyone no matter where they are in terms of spending, saving, and investing.

    Have a clear “bucket” system

    I believe what you “decide” to spend on is the #1 most important decision that reflects your values and needs in life. These are personal decisions. You can have a few critical “buckets” and put a defined amount each month, or you can have as many buckets that are relevant to you, and then plan accordingly.

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    The buckets will typically be:

    • Living Expenses (monthly expenses)
    • Kid-related Expenses (tuition fee and other “extra-curricular activities”)
    • Savings
    • Investments
    • Emergency fund (for those who want a safety net)

    Other families who place an importance on creating memories will have “travel & entertainment fund” as a separate bucket, while others will have “to leave the kids when we are gone” bucket. Of course, as Filipinos, we all have the “for our extended families” bucket as well.

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    My biggest struggle when I started running my household was to decide how many “buckets” to plan for and how much to put under each “bucket” exactly. It is tempting to say we will plan for the future when we have more income, but squirreling away a tiny amount each month TODAY can go a long way than waiting years down the road when we feel things are “better.” Because let’s face it, we can always feel there is not enough so putting away whatever we can now is not a bad idea.

    What do you need to do now: Decide your “risk” profile and how much insurance (if at all) you want in case of emergencies. Some families prefer to invest their extra money, while others prefer to pay for insurance instead. Again, this is all personal. What is your preference?

    Set a realistic budget (but give yourself wiggle room for life's surprises)

    Setting a budget involves two components — planning for the ‘expected’ and accommodating the “unexpected.” Moms and especially those who run their business always need to have a plan to tide the family over if expenses balloon (and they will!), or when the money we manage ends up being lower than we expected.

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    First is to write all expected expenses (i.e. food, utilities etc.) and set an amount for a “buffer” in case this is a month of celebrations and the family will eat out more often. Also, anticipate the “Big” months for spending (i.e. tuition fee payments) or if you are planning for a big holiday or Christmas when you have to spend a hefty amount for gifts. When you start out it’s hard, but as you get into the habit of tracking your expenses you get better at anticipating numbers and slowly build reserves for the “unexpected” expenses

    What do you need to do now: Ask yourself: do you have a plan for unexpected expenses?

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    Look for alternative payment options

    Early on, I spent time researching and selecting credit cards with the best conversion to either miles or rewards. It allowed us to save money because within a year we could earn enough points to be converted into shopping vouchers/miles for a short flight. When I was younger I didn’t want to use my card because I didn’t want to spend more than I have on hand cash-wise. But when you are clear on your “monthly” spending, you can comfortably charge expenses you know are budgeted on the card (which you can pay for in full at no interest) and then earn on the rewards.

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    What do you need to do now: Review your credit cards. Do you have the best credit card/payment facility based on your monthly expenses?

    Define your “spending” personality and create a system to support it.

    Are you a savvy shopper, buying only at the lowest price or you choose “quality” and pay for more expensive items that last longer? Whatever you choose, create a system to enable you. Can you set up an online “sale” alert so you shop for items you want at a lower price? Or do you pick the brand/item beforehand and patiently wait till sale season. Some moms wait until after Christmas to buy heavily discounted Xmas decoration to use for next year — how wise!

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    Agree with your spouse/partner

    Managing your finances is a joint decision. One may be savvier than the other but both parties need to agree on the “buckets” to spend on and how much to spend for emergencies and for your future. This will reduce a lot of the friction couples and business partners’ face.

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    What to do now: Managing money is important in running a home and a business, and we’ve prepared a money workbook to help you navigate this. If you wish to know more, please click this link to get your copy of the money workbook ideas.

    Apart from tips on managing money, a lot of moms nowadays are looking for a side hustle to have an additional source of income. If you are one who wants to have your own business, check out this free 20 Business Ideas Workbook

    Kate Yu is the founder of MommyRepublic where moms can access online resources to help them start their dream business. She's a mom, ex- FMCG marketer, and loves planners, productivity, and playdates! She's on a mission to help moms make space in their lives for their dream business.

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