A budget is a critical part of being able to quit working so you stay home with your kids. Budgeting is also the gateway to peace of mind and financial freedom. A budget will make you look hard at your finances, the ways you are spending money, it will make you examine your priorities and re-align them with your values. A budget will force you to look hard at your debt, and in the process you may just learn a little bit about yourself. To begin with, you need to figure out how you are spending your money and on what. Interestingly, most people have no idea what the answer is to this question. If this describes you, then you need to begin with tracking all your expenses for a month. It is important not to guess. When this is completed, it is time to really scrutinize this list and look for ways to start cutting cost. Start by looking at the big ones, like your home, vehicles, insurance and health care.
If your house payment (rent or mortgage) is to expensive then move! Why be a slave to a mortgage? If moving is not an option, then consider your financing. Can you re-finance at a lower interest rate? Re-financing can save you several hundred dollars a month. There are tons of lending institutions that are willing and ready to help you with your lending needs, not to mention your current institution. Start by negotiating with your current lending institution, which will be eager to listen if you have been a timely payer. Don't go into blind, be prepared. Go online, look up the best interest rates possible for your size mortgage. As you renegotiate you mortgage, make sure you do it with no points and no closing costs.
What about your homeowners insurance? Consider raising your deductible. Shop it! Insurance companies are competitive, some have better pricing than others!
How about the car you are driving. Is it financed with a huge monthly payment or does it have lousy gas mileage. Consider selling it and buying a more affordable vehicle. If you can pay for a car outright do that, and be free of a payment. If financing is your only option, shop the loan, and buy a cheap vehicle with a low payment. Another option is refinance your current loan. In some cases your bank will be open to the idea. Don't let a car stand between you, your children and financial freedom.
Your car insurance is a costly bill each month. Consider raising your deductibles, you don't have to raise them a ton, find out how much it would reduce your rate. ? Also, go over your policy, what are you paying for? In some cases things are mysteriously added to your policy that you do not need. Ask for a multiple car or good driver discount. More discounts may be available if you use the same insurance company for both your homeowners and your car insurance. For those that are no longer working, chances are you are driving less. Most insurance companies will reward that with a discount, but if they do not know about it, it is not going to happen. For older vehicles, seven years or older consider only carrying liability and uninsured motorist.
The number one reason people file bankruptcy is medical bills. Knowing that means you must have health insurance, but maybe you don't have to pay as much as your paying. For those of us that have individual polices, shop it. Remember, these companies are competitors. For those that have spouse whose company offers it, you should really evaluate it and know what you are paying for. Some employers offer their employees different coverage options. Know what they are, and if it is advantageous for you to switch to a different option. Your health insurance is an absolute necessity, not having it, is not an option. Really studying your monthly expenditures is a eye opening experience. Reducing your expenses and learning to live by a budget could be the key to becoming a stay at home mom. Don't be shy, get aggressive with your budget and what you can save will stun you. Remember, if you want it bad enough, it will happen.