Sunday, 16 January 2011

Making it add up....

This is a post about money and I waffle on for ages, you have been warned.......

Finances seem to be the thing on every ones mind lately. The finances of the world,
the country, local councils and our own personal finances. They all have one thing in

Theoretically, what money comes in should be more if not equal to what goes out.

And that is the key, in theory that should be the way it goes. But as we all know,
something usually stops that theory and that is called reality.

In reality, for many people nowadays, they have lived a life beyond their means.
What money now comes in, is less than what money goes out.

Now we are finding we have to pay for it. Apart from a select few, we are all in the
same boat to one degree or another.

Our circumstances may be varied and way of life may have different values and principals, but overall, no matter what walk of life you come from, the formula is the same.

What comes in must be more if not equal to what goes out.

The reason this has come to my mind lately is that Charlotte, on turning 16, has applied for a student bank account. It comes with all sorts of freebies like student rail card at a reduced price, mobile top-ups and free online banking, you even get to choose the image printed on your debit card, she has chosen jelly beans by the way.....

There was alot of gumpf to read through, which she duly did, and then found she was none the wiser. All she wants to do is put money in her account then have the facility to draw that money out when she is ready to do so. She doesn't want an overdraft, she just wants to know that what goes in, is equal to if not more than what goes out....

I do believe she has learnt this by watching and following along with the
financial aspect of running a home. She is quite adamant that she will
not allow herself to get into debt and that if she hasn't got the money now,
she will wait and save for whatever she wants and pay for it then.

Charlotte has however, not had the "Bank of Mum and Dad" to rely on,
and realizes the value of money. Charlotte has also experienced the good
feeling of saving for something week after week, to then finally be able to
afford her own laptop, that is truly hers, she should be quite proud of herself...

When the children's Dad moved out four years ago we had to, as a family,
sort out pretty quickly what to do with the money we had. I have been
extremely lucky in as far as the children have never had the idea that money
grew on trees, that if you pester long enough you would get it,
and that fashion and the latest gizmo was not a must have for them.
They are happy with what things they do have.

Four years ago we sat down around the table, all five of us, and looked at
what we have, what we need, what is the priority and needs to be paid first.
For as long as I can remember I have used a book to record what happens
to the money each week, I use envelopes to separate what cash I have to
pay each bill. If I go to the post office to pay bills, I might put the rent,
TV licence, gas and electric all marked in the same envelope with the
relevant cards, it saves time at the counter if it is all in one place.

The children sat with me, with a cup of coffee, a calculator,
a note pad and the amounts of things that needed to be paid,
whether it was weekly, fortnightly or monthly, and worked it all out.
There was even some for pocket money..

The number one priority for existence is this:- shelter, sustenance and covering...

They know that you must always pay these first:-

(1) A roof over your head/rent/council tax etc
(2) Adequate clothing and shoes
(3) Nutritional food
(4) Heat and light

Then come things that, whilst not essential, are needed when you have children
and make life easier. These are:-

(1) Communication ie:- telephone/internet
(2) Adequate furniture and furnishings
(3) The latest X-Box 360
(I'm kidding, I was just seeing if you were paying attention)

Everything else comes after that if you can afford it, and that includes pocket money....

However, sometimes life throws a spanner in the works and the children
will come home with a letter that asks for money for the latest field trip,
someone will come home with a wet foot and the realisation that their
shoe has a hole in it and they need to be replaced or the washing
machine decides to die and the extended warranty finished the month before.

That's when you become an expert in juggling money and finding a way to make it work.

(Caution: prophetical summary coming up).... Fortunately, I have now got a
grip on our finances and steer our home and finances like a ship through the
stormy waters of life. Some days the waters are calm and we are sailing
through but in this time of uncertainty, rising prices and an unstable
economy there are storm clouds on the horizon.

So we had best be prepared and do the best we can with what we have got.

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