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Essential Family Expenses

Ever wonder how to separate your essentials from the extras in your family budget? CafeMom breaks down what they see as the mission critical expenses.

Included are some obvious things: housing, food, health insurance. And savings.

Which raises the question: in tight times, do you continue to save? If one spouse is unemployed, for example, or you’ve hit a bumpy patch with your business.

CafeMom’s Linda Sharps says yes. She’s right, up to a point.

When you’re tightening the belt on your household budget, there are some obvious luxuries to give up. As Sharp says, “So long, date nights!” You can let go of expensive travel plans, cable television and clothes shopping, too.

Other sacrifices get more complex. Sharps mentions feeling whiny when she can’t pay for her favorite shampoo. Not because the shampoo is that great, but because she misses being able to give herself a treat.

The shampoo goes before the savings account, though, at least in her house. Sharps has adopted the financial advice often phrased as “pay yourself first.” Put your savings in the same camp as your utilities and mortgage payment, an essential expense before anything else gets spent.

Doing that through thick and thin will help you shore up your financial future and secure the life you want for your kids and your future self.

The time to stop, of course, is when it starts hurting your present life. Not in a “can’t buy expensive shampoo” way, but in a “can’t pay the mortgage” way. If your main breadwinner is out of work for any extended time, you may need to stop putting money into your savings. You may even need to start taking some money out to cover your expenses.

That should be a last resort though, on par with moving to a cheaper living situation. Giving up your savings is something that will affect your family life, even though the pinch may not be felt for years to come.

Photo: emdot

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