by Colby Cardin

What mistakes do you see families make with their money that could be avoided?

Managing money isn’t easy. In fact it’s one of the most prevalent issues facing young families today. Statistics tell us money management is one of the largest contributors to this country’s high divorce rate. Here are some tips to help your family avoid some of the most common problems.

Budget
Budgeting is the key to successful money management. It’s a simple matter of identifying all your expenses and your income — and determining the best way to use the income to cover the expenses.

When you list your expenses, it’s important to remember to include more than just the big expenses like the car, house/rent and utility payments. You should also list expenses like lunches, haircuts, doctor visits, sports fees, toiletries and diapers. Don’t forget to set money aside each month so you’ll have the funds to make annual or semi-annual payments like car insurance. You might have a “wish” list of things you would like to purchase — set it to one side.

Write down how much you net every payday as a starting point. Then subtract the expenses you know you must pay for. You may find it necessary to reprioritize. If you do not have the money left over to spend on wish list items, you may have to wait to buy it! You may find you’ll need to save your money and make larger purchases or purchases from your wish list when you can afford it. And remember, credit cards are wonderful tools but must be used with a plan to pay them back!

Pay Your Bills on Time
Paying your bills on time is fundamental to good money management. Never get behind paying your creditors. It could have a devastating effect on your credit and is an indication to lenders that you do not put a priority on your obligations. It can also negatively affect your ability to borrow money in the future.

Paying your bills online might be an easy and effective option for you. Many online banking programs allow you to set up automatic monthly payments when you know the amount will be the same each month. Paying bills online can also shorten the time needed to get your money out of your account and into the hands of your creditors.

Balance Your Checkbook
Young parents get in trouble when they do not balance their checkbook and may consequently overdraw their bank account. Remember, when you make an account balance inquiry at the bank, the balance only reports transactions already paid from your account. This balance does not take into account any check or debit card transactions you’ve made which have not yet posted to your account. The best way to keep a true record of what you have in your bank account is to keep your checkbook register current. Write down everything (all checks, all debit card purchases, all automated payments and credits) and keep a running total of your balance.

There is no magic solution — and everyone’s financial situation is different. One thing is certain: it’s not how much money you make that determines your financial success — it’s how you manage that money.

Colby Cardin is a graduate of The University of Georgia and is a branch manager at Columbus Bank and Trust.