Managing Everyday & Long-Term Financial Challenges As A Homeschooling Family

February 12, 2014

1:40 PM

Since you aren't working, how do you manage your finances?

I think one of the biggest concerns when it comes to parents making the decision to homeschool is what is to be done about finances. I think it's pretty safe to say that most two-parent households have double income, and with double the income, you can seemingly manage your monthly finances easier, quicker, and better...right? Let me be the first to tell you that this notion is a fallacy. Single- or double-income households are no different. It's all about budgeting. Sure, you can indulge in meaningless frivolities when you have more money, but the fact of the matter is you can mismanage $140,000/annually as easily as $40,000. Over the past year, Stephan and I learned a whoooollllle lot about budgeting. God has given great financial wisdom to many of our close relatives, who, in turn, passed that wisdom onto us. We have greatly improved our financial situation since we first moved to Texas. We had to make some tough decisions early on to benefit us later. The following is a list of changes we made to our financial lifestyle. 

1. Create a budget spreadsheet. My mother always told me to "put things in writing" and Dad would tell me to "do the math". Taking my 'rents advice, we came up with our spreadsheet. I first started our budget spreadsheet shortly after Stephan left for basic training in 2011. I spent the next 2 1/2 years detailing and adding so much data to it, that it would probably make most corporate financial managers cringe! This was also the very best decision we made when it came to wanting to take back control of our money and finances. Now that we can literally see what all of our expenses look like, we can go to the next step of planning.

2. Don't create new debt unless you're debt-free or actively chipping away at old debt. This is so difficult for 20-something-year-olds. Students loans, credit cards, car notes; all of these are common for young adults. The problem is that a lot of the time, we take them for granted by a) not worrying about paying it back until much later, b) relying on Mom and Dad to foot the bill, or c) ignoring it altogether. Stephan and I created so much debt in our early twenties and we're paying for it now nearly ten years later. When we got married, we combined our debt and was astounded at how much we were in the red. We new there wouldn't be any room for new credit cards or financing opportunities. 

3. Check your credit reports and FICO scores annually. Credit reports and FICO scores are so important to familiarize yourself with when trying to build up your credit. We started doing this in early 2012 when we knew that we were going to have to buy a car once we moved to Texas. Seeing what was on there also helped us to keep the debt column on our spreadsheet updated. We check ours for free.

4. Learn to live modestly and trim the fat where you can. One of our biggest monthly bills after we moved here was our cable/internet bill. We got a standard cable/internet package with one digital box, but we struggled to pay that bill on time. Eventually, we made the decision to cut our cable completely. We kept the internet, and subscribed to Hulu and Netflix. We were able to slash our total bill by $50. We made adjustments to our auto insurance and made sure we took advantage of all of their discounts. Getting gas was another hassle, because we kept going over budget. To resolve that issue, I got a gift card from the grocery store we go to for gas. Every pay period, I'll load it up with the money we budgeted out for gas and will use it for that purpose only. 

5. Accept responsibility for any mistakes you made and pay up! For me, this was the hardest thing to do. 23-year-old Anesha was so careless and cavalier, and now almost-28-year-old Anesha has to deal with it! But, guess what? It takes seven years for a reported blemish to disappear off your credit report, and who has that kind of time? I'm at a peak time in my life. I have a husband and kids. We want to buy another car soon. When we move back to Maryland, we'll want to buy a house at some point. The only want all of these things can be done is by paying what we owe. It sucks. Big time. But, nobody else is going to pay it and no one will want to give us credit for anything with a splotchy credit history. 

6. Contact your creditors, starting with the one with the smallest debt. As I mentioned earlier, my mom always said to put things in writing. She also always advised me to call up these folks and speak with them so I won't have 800 and 866 numbers blowing up my phones. Whatever is your smallest amount of debt, start by making arrangements to pay that one. Once that is paid off, contact the company and have them send you a letter confirming that the account has been paid in full. After that is done, move on to the next smallest. 

7. Use money given/refunded (i.e. tax refunds) to you toward bills/debt. We are all guilty of blowing through money that is given to us, because we're looking at it like it's extra money to use for leisure. We learned the hard way last year. Stephan and I received a whopping return from our 2012 taxes. Even though we had financial obligations to see to, we thought about our personal wants and needs. A month and a half later, we were in the same place we were before we received our return...but broker. We vowed not to make that same mistake again. This year (using the advice given by my awesome sister and bro-in-law) we used our entire return toward debt! Ludicrous, right? Not at all! The key is to have money go back into what's leftover after your monthly bills are paid. And that's exactly what we did. :-)

8. Create a section on your spreadsheet for savings. When you owe people, it's really hard to save up for something you want. If you see something you want that you just have to have now, then that doesn't make it any easier. The other side of savings is that it's always great to have something set aside for incidentals. Those times you need new tires on your car or your child needs new gear for little league is where savings come into play. What we did was add a section for savings on our spreadsheet. We treat this like a bill so we'll remember that this is something that has to get paid. We budgeted our a certain amount to drop in our savings account every pay period. We don't touch this EVER. We even added a section at the bottom to show our progress. Example: We've saved up $550/$2000 for a down payment for a car. (these figures are hypothetical, and don't reflect our actual savings. Y'all don't need to know all that. *Lol*)

9. Make extra money by selling off what you no longer need. Stephan and I found a baby consignment shop in town, and were able to make a couple of dollars by selling much of Madison's old clothes and furniture/equipment she could no longer use. We even successfully sold old movies and books on Amazon! We used to take our movies to the FYE store at the mall, but they closed it. :-( Garage sales are also a good way to sell off unwanted and unneeded stuff. You can also de-clutter your house while you're at it!

10. Don't forget to do something for yourself. My brother-in-law was the one who told us this. Stephan and I tend to get so caught up in trying to manage every dollar responsibly that we forget that it is OK to do something for ourselves once in a while. After paying off several bills, we bought ourselves a Playstation 4. Ho, boy, was Stephan elated! One weekend out of the month, Stephan will give me a few hours off from my mom duties, so I'll go and get my nails done. Sometimes, we'll take the kids to a movie or go out to eat at a nice restaurant. Whatever we decide to do, we make sure we're enjoying ourselves!

These adjustments are what worked for us. Not everything will work for everyone. Sometimes, you just have to find what works for you, but in the case of debt and other financial responsibilities, keep in mind that stuff has to get paid. By making these changes, we were able to slash approximately $10,000 worth of debt in less than 3 years! God. Is. Good. There are other little tidbits of advice I could share, but I'll keep it at this for now. I hope this helps! 

 We're still keeping up our weekly Black History Month lesson about Garret A. Morgan.

 We created light signals out of construction paper and hanged them in each entryway downstairs. *Lol* It was fun.

 We're still teaching Jay about earning, spending, and budgeting money. He's doing a great job so far!