Debt Free Mom Discusses Family Finances

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“Debt Free Mom” (aka Carly Hill) knows that family finances can be a fraught topic.

Yet family finances affect every aspect of family life: A family’s stress level, as well as housing, education, and recreational choices. Family finances play into decisions such as rec sports or travel team? Private school or public school? And, of course, our attitude and money habits affect our children as well. Our boys learn a lot about money management — both good and bad! – from us.

On Budgeting & Money Management

“A budget is simply a tool, a way to arrive at an outcome that’s not going to happen by accident,” Carly says.

Step one in budgeting (or creating a money plan) is to understand the gap — either positive or negative — between your income & expenses. “Any financial goal that we have is going to be driven by the gap between our income and our expenses.”

You may not have a financial cushion; your expenses may regularly exceed your income. That’s stressful. And stress and overwhelm can cause us to freak out and/or ignore our financial situation. Instead, Carly recommends radical acceptance.

“We have to radically accept what’s already happened,” she says. You can’t go back and un-borrow your student loans or choose a different job. Take some deep breaths and look at your real numbers — how much money you owe and how much you have. (Often, Carly says, things aren’t as dire as people think.)

Once you know your numbers, do NOT jump to creating a budget. Instead, think about what you’re trying to achieve. What goal would you like to work towards? A good first goal is to consistently spend less than you make. Don’t worry about saving or paying down debt yet.

Next, focus on your financial circle of influence. You can’t control grocery prices; you can control how quickly you press “buy” online.

If you’re struggling to see a path forward — if you’ve already cut expenses and don’t see a way to increase your income — it may be wise to get outside advice. “We’re often too close to our own situation to see an alternate path,” Carly says. An outside advisor (who may be a friend or financial professional) isn’t emotionally involved and may be able to see alternatives that you can’t.

In this episode, Jen, Janet, & Carly discuss:
  • Budgeting, saving, spending
  • Why your parents’ money advice may not work for you
  • How having a money plan can ease stress
  • Understanding your financial circle of influence
  • Establishing clear goals & clear incentives
  • Negotiating conflicting financial priorities
  • Resisting pressure to buy
Links we mentioned (or should have) in this episode: — Carly’s website

The Debt Free Mom podcast

Teach Boys Money Management — ON BOYS episode

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