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Family Financial Flexing | Paradigm Money
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Family Financial Flexing: How to Make Your Household Income Stretch

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Growing up, anytime I inquired about the family finances my mom would utter four words—none of your business! I had no choice but to accept this. However, as the resident financial fanatic it would have been good to understand the family finances in and out. This could have saved us money as a family in the long run because I didn’t know where we stood financially and my only job was to figure out how I could convince my mom to spend money on me; having no regard for any other household financial priorities. Now as a parent, I understand the importance of everyone’s input in family matters; not just the adults.

Ken Blanchard once said, “None of us is as smart as all of us,” and while managing a family may require some hierarchy to avoid chaos, running your family like a team may prove to be beneficial. Everybody’s input matters and the more information that can be shared, the better the chance you have of running a successful household. Teamwork makes the dream work and the following four tips will help you run your household finances more effectively in order to make your household income stretch.

Make Sure Everyone is Aware of the Numbers

One of my old managers use to always say, “Inspect what you expect,” meaning that if you want to get a certain outcome, you must make sure that you are checking in and doing what you need to do in order to get that outcome. With that said, if your goal is to run a lean household, it is important that everyone in the household is aware of the numbers. Many times, when it comes to paying bills, going over expenses and analyzing income, this is usually reserved for the heads of the household/bread winners. However, those involved in spending the money should understand all facets of the family budget as well. Doing this allows everyone in the home to understand what is coming in, what is going out, and what adjustments need to be made in order to reach the family financial goals.

Create Goals as a Family

Speaking of family financial goals, it is important that those goals are created together as a family. Doing so gives everyone a sense of responsibility to keep the goals intact. So next time instead of telling your child “no I don’t have it” you can say, “no we don’t have it because this money is allocated for xyz.” This may be a challenge at first because I’m sure your kids don’t care much about your electricity bill or how much the cable costs, but as you include them on things like family vacations, trips, and other things that will benefit them more directly they will likely start to be able to draw the parallel and understand why certain financial decisions have to be made. Not only is this a great money management lesson for them, but it also removes the temptation of them asking for extra since they’ll know what is available and what is not.

Begin to Plug Money Leaks as a Family

Whenever times get tough financially, there are three options 1) cut back on expenses, 2) make more money or 3) do both. If you are trying to stretch your household income, then you don’t have to wait until times get tough to exercise one of those options. Being proactive will help make sure that financial storms don’t happen unexpectedly and assures that when the storms do happen the family is well equipped to weather them. Sure, parents can take the lead and begin slashing expenses, but when it’s done as a family it allows everyone to feel included and responsible for the maintenance of good family financial planning. As you plug the money leaks, make sure that a financial freedom fund is being built as well. Show the family the importance of having 6-8 months of expenses in a free high-yield savings account.

Distribute Household Money Wisely

Now that the family is aware of the numbers, knows what the family financial goals are, and has played a role in plugging the money leaks and creating a financial freedom fund, it is time to allocate the household funds wisely. Let everyone play a role in knowing where money is going and why. This has a long-term learning effect on the family, helps keep the family budget intact and avoids anyone trying to stray in a different direction.

Congratulations! You are well on your way to financial family flexing and stretching your household income. Staying focused and having the perseverance to see this plan through will give you and your family the best chance to be successful. Additionally, utilizing free tools and resources, like the S.M.A.R.T. Financial Goals Worksheet, Budget Worksheet, and Daily Spending Journal we offer in our Best You Yet Experience, will help you tremendously on your journey to fantastic family finances.

And don’t forget—a family that pays together, saves together!

Ash Exantus aka Ash Cash is one of the nation’s top personal finance experts. Dubbed as the Financial Motivator, he uses a culturally responsive approach in teaching financial literacy. He is the Head of Financial Education at BankMobile and Editor-in-Chief at Paradigm Money. The views and opinions expressed are those of Ash Cash and not the views of BankMobile and/or its affiliates.

Digm Piece (Op-Ed)

Top Ten Freshman Money Myths

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Starting college is one of the most important and exciting times of your life. Now that you’re all “checked-in,” enjoy your college experience without worrying about where your next meal will come from by chasing away these common freshman money myths. (more…)

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Digm Piece (Op-Ed)

Do What You Love for Free – Here’s Why

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This is ParadigmMoney.Com, right? So, speaking about a paradigm shift should come as no surprise. In science and philosophy, a paradigm is a distinct set of concepts or thought patterns, including theories, research methods, postulates, and standards for what constitutes legitimate contributions to a field. When speaking about money, most believe it is something you work for and not something that works for you. In all truth, the one percenters understand this concept quite well. In order, to wake up and do what you love, you too must shift your thoughts when it comes to finances.

Doing what you love for free allows you to create freely. You can come up with disruptive, out of this world, never seen before creations that will rock this planet. Take Elon Musk from South Africa, founder of X.com which went on to become PayPal and sold to eBay for 1.5 billion dollars. Musk is also the CEO of SpaceX which designs, manufactures and launches advanced rockets and spacecraft. The company was founded to revolutionize space technology, with the ultimate goal of enabling people to live on other planets. You may say, of course, he can do this, he is a billionaire and co-founder of Tesla.

Not true. PayPal, Tesla, and SpaceX are all products of Musk doing what he loved. As a child, he was an avid reader and taught himself computer programming leading to the creation of X.com. He dropped out of college to start a company with his brother and here’s what he had to say about that PayPal deal… “My proceeds from the PayPal acquisition were $180 million. I put $100 million in SpaceX, $70m in Tesla, and $10m in Solar City. I had to borrow money for rent.” Elon Musk’s current net worth is estimated to be at about $13.3 billion. No bad at all.

The reality of the matter is the less you are attached to money the more money flows to you. Pay more attention to creating things that move the culture forward. Starting at doing what you love with ultimately position you for financial success and happiness.

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How Much Does College Cost?

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How much does college cost these days? If you’re preparing to go to college and will need to find a way to finance your own education, this is one of the first steps to figure out.  Then you’ll want to find out all of your options and create a plan. Here’s a quick breakdown on the typical cost of college. (more…)

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