Budgeting CENTS: Step ONE

A hot topic of conversation that frequently occurs between my manager and I, is about budgeting and money and the challenges in educating and coaching our participants about it.  I feel confident in saying that most of the participants…and not just those who have difficulties understanding basic math… struggle with this area, and that it is one of the major concerns for parents in relation to the preparation of their adult child living independently.

So, what’s the solution? My initial thoughts began with how there wasn’t ONE, but were in fact MANY possible solutions, however each time I break them down the starting place remains the same:

Introduce money into an individual’s life as early as possible…and by this I mean cold hard cash!

Only a few of the participants I have seen know how to use actual cash, but most are aware of what to do with a debit card to buy something.  This is a problem.  Unless a person using the card is also checking their account to be aware of the decreases in their account balance, then they more than likely have no realistic idea of what their financial situation is.  Add to this the many times a participant has told me that their card is never declined because mom or dad always makes sure there is money there…then you have a person who more than likely will struggle when needing to live with financial limits and a budget.

Cash is real.  Cash, when used has a physical and visual limit.  And I believe people tend to be more fearful when using it and therefore more respectful…unless they avoid it all together…which brings us back to the issue!

Eliminate the debit card and go on a cash diet.  Set an allowance (for a week to start) and discuss what that money is to be used for; food, bus fare, entertainment…then encourage sticking to the financial plan.  This doesn’t have to be complicated, it should be realistic so base the amount on approximate amounts spent previously…and work at the pace of the individual so that when they are ready, the time period can extend to 2 weeks and so forth.

The goal is to begin getting them to A) understand financial limits with how much they can do with a certain amount, and B) encourage financial responsibility in ensuring they have the money needed.

When this has been successfully worked on for a while, then they are ready for Step TWO…

(Stay tuned to a future blog!)

~ Tami Schaafsma

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