May 7, 2007 § Leave a comment
My mother was actually able to take home economics as a course in high school. By the time I got to high school it had been renamed “personal finances and family life” and now it doesn’t exist in my daughter’s high school at all. They have a personal finances course and several business courses, but household management did NOT seem to be one of the high priorities.
A very good friend and I recently got into an almost argument over feminism. She views herself as a feminist and applauds the achievements of the women’s movement over the past thirty or forty years. I look at the feminists as rather a destructive force, not in touch with most women’s lives and I feel rather betrayed by a movement that claims to speak for all women yet really only speaks for liberal and career women. Case and point .. home-economics is dead in high schools (and don’t even think about let alone talk about something as archaic as a club like Future Homemakers of America.) And no I don’t think personal finance is a great substitute, while banking and money management are important there is a good deal more to household management then just that.
Having been in business I can safely say that a family is (from a financial and management point of view) a business. The Domestic Church, the family, in addition to being viewed as an Abbey in the spiritual sense also has many parallels to an Abbey in the business sense.
If you run your home financial matters as if you were running a business you will be far more successful in staying out of debt, living within your means and having the ability to deal with those expected and unexpected expenses that every family faces.
The three things that have helped our family the most in finances are: Budgeting, Menu Planning and Debt Cascading (snowball debt reduction). Each of these I will address in the future more completely
Budgeting is critical. It is boring, it is tedious… most people don’t do it. But only an idiot would run a business without a budget, and they wouldn’t be in business long. Budgeting isn’t horrible. If you don’t budget at all just spend the next two months tracking your spending. Write down everything that is spent by everyone in the family. This has the two part effect of figuring out where your money goes and curbing spending. For some strange reason most people are less likely to spend on small purchases if they are tracking them. A dollar a day on soda seems too small too count, but twenty dollars a month is 240 dollars a year. It adds up. Once you know exactly where your money is going it is much easier to make a realistic budget.
Menu Planning. Most of our expenses are fixed or only slightly variable. Of the variable expenses food is the largest expense. If we eat out, even at McDonald’s it sets us back the better part of twenty dollars. By deciding ahead what we will eat each day I can buy smarter, it takes the headache out of deciding what will be for dinner and we can have enough so that the oldest daughter and my husband can both have “take-with” lunches instead of “take-out”.
Cascading debt reduction is probably the most powerful little tool I have ever used to help our finances. After our fourth child was born we had a pile of debt. Medical bills were just pouring in. I was able to call and get payment schedules set up with every one of them. Then I used a Cascading debt plan to get out from the debt. I ordered the debts from smallest to largest (none of them had interest), put in a modest extra payment amount on the first, paid it off then took the amount I had been paying to debt 1 added it to the payment for debt two and paid debt two off in no time, then the entire amount goes to debt three.
These are just three little ideas to start. The big idea here: Run your home finances like a business and you are more likely to stay in the black.