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How to Figure Out Your Family’s Grocery Budget (and Stick to It!)

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The post How to Figure Out Your Family’s Grocery Budget (and Stick to It!) appeared first on Penny Pinchin' Mom.

One question I see time and again is “How much should I spend on groceries for my family of four ?” — or three, five, etc.

When you’re making a household budget, it’s easy to know how much you need to include for most of your living expenses, like utilities, student loans, and even fuel. But when it comes to your average grocery bill, how much should you expect?

As much as I wish there were a simple answer, a family’s grocery budget will be different for every household. There’s no right or wrong number, but finding yours is key to keeping your grocery spending in check.

Here’s a guide to help you figure out how much you should spend on food each month.

Calculator and receipt in shopping cart for grocery budget

WHY YOU NEED A GROCERY BUDGET

It may sound like it should go without saying, but you need a food budget because it will force you to think about money when you’re grocery shopping. After all, your income is a certain amount, and that means you only have a certain amount of money you can spend on food for your family.

The other reason you need a frugal food budget is to make sure you don’t spend too much money for the food your family needs (and to save money by not buying food you don’t need). You become smarter about your spending and think twice before adding impulse purchases to your shopping cart.

HOW MUCH TO BUDGET FOR FOOD

It can be tough to figure out how much you *should* budget for food vs. what you’re currently spending on your meals. There is not a right or a wrong number, but you must find the right amount so you don’t overspend.

Here are some tricks you can try to help you figure out exactly how much to spend on food per month.

Budgeting Hack 1: Use the National Average

According to the U.S. Department of Agriculture, the average household spends about 6% of its income on groceries each month. However, the study also shows that the average American also spends 5% of his or her disposable income on dining out. That makes your food budget 11% of your overall income — a significant expense!

If you want to keep things simple and use the national average to calculate your monthly grocery budget, then plan on spending 6% for groceries and an additional 5% for dining out.

Here is an example: If your take-home pay is $3,000 a month, you will budget around $180 for groceries and $150 for dining out. Of course, if $180 won’t cover your needs, then you need to commit to a more thrifty plan: Scale back on eating out and use any additional money toward your grocery needs.

Budgeting Hack 2: Use Your Actual Spending

A more realistic way to figure out how much to budget for groceries is to look at your current grocery spending. An easy way to do this is by completing a spending form.

Here’s how it works. Review all your purchases over several pay periods. You should include food spending, fuel, dining out, entertainment — everything. Having all the numbers in front of you will help you calculate the average of how much you’re spending on groceries (and all your other budget categories!) every week.

If you think your expenses for food add up to too much money, you can try to reduce your spending. Just keep in mind that your family will have to adjust the way you eat.

Budgeting Hack 3: Use a Grocery Calculator

Sometimes, you want to get specific help when figuring out how much to budget for food. There is a simple to use, online grocery budget calculator; you can use it for free.

Fill out the information for all of your family members, then hit calculate. It will return an average you should plan on budgeting for your family.

I ran this report for my family, and the result said we should plan on $219.35 for an average grocery budget for our family of five. That is more than we spend. On average, I spend $125 – $150 per week on everything our family needs.

While using a budget calculator can be helpful, it might end up doing the same thing for you: Suggest an amount that is higher than what you know you spend — or is higher than what you can afford. Use this calculator as a guide, but not the only factor when determining your budget.

Budgeting Hack 4: Look at the U.S. Average

Another way to reach a grocery budget amount is to look at the plans created by the USDA. The most recent plans are on their website. They provide the weekly cost for a thrifty, low-cost, moderate-cost and liberal plan on a weekly and monthly basis. The amounts are broken down by gender and age. You will need to total the numbers listed for the people in your family.

For example, the average grocery budget for a family of four is about $871, per this report. The amounts will be lower, of course for a family of three or higher if you need to budget for a family of five.

Once again, these numbers should be a guide. Once you start grocery shopping for your family, you may find that you spend much less – or even more – than what the average family spends on groceries.

Don’t Forget Special Dietary Needs

If you have a family member who cannot eat gluten or who has other dietary restrictions, these can affect your budget. Make sure you keep these foods in mind when developing your budget as they can cost much more than average foods or require trips to a specialty grocery store.

TRICKS TO MAKING A MONTHLY FOOD BUDGET

There is no magic formula or grocery budget app that will pull the numbers together for you. The key is to make sure that you put forth the effort in the right manner to make it work for you. Keep the following in mind when figuring your monthly food budget:

1. Consider Your Current Spending

Before you can make any changes, you have to know where you are starting. That way, you can see what you currently spend on your groceries so you can start cutting back.

Need help figuring our your average grocery bill?

You can use the Spending Worksheet and go back to find your spending on food over the past 8 weeks. Look at every transaction in your bank statement and total it. Then, divide that amount by two. You know have an average your family spends on food every month.

The next step is going to be finding a way to not only spend that amount going forward but try to find ways to spend even less if you can.

2. Put It in Writing

The next things you need to when creating your budget for food is to put it in writing. Once written down, you are more willing to commit to the process. Make sure your spouse or partner is also on board so you can work together to ensure you don’t overspend.

3. Start Using Cash

If you really want to stick to a tight budget, you need to use cash. Each payday, get cash from your bank for the amount you’ll need at the grocery store. That is all you have to spend until the next payday. No cheating! That means you can’t whip out your debit card if you run out of money.

You’ll quickly learn better ways to be smart and strategic when figuring your budget and sticking to it. (Read more about how to start using a cash envelope budget ).

4. Commit to Using Your Budget

You can have the greatest intent to use a budget, but if you aren’t ready to do so, it will never work. It is just like dieting. You may know you want to shed pounds, but if you are not willing to put in the effort, the weight will never come off.

Once you know the amount you have to spend at the grocery store, you need to stick to it (this is another reason to use cash). You have to make the conscious decision that you want to budget and then do all you can to make it work.

Your spouse or partner needs to be on board, too. It will never work if one of you is committed to making your grocery budget work and the other is not. Have a long heart to heart talk and make sure you are on the same page.

Read more: How to talk to your spouse about money

GROCERY SHOPPING ON A BUDGET

If you’ve tried all these ideas and still need to save money on groceries, here are some simple tricks you can try.

Reduce Your Dining Out Budget

Stop eating as many restaurant meals. That’s an easy way to find money to add to your grocery shopping budget, especially if this means you’re cutting back on alcohol spending at restaurants.

Use Coupons

While they are not for everyone, coupons are the simplest way to save money on the items you need. Even if coupons aren’t available for the grocery items you need, you can find them for household products you use, like toilet paper and laundry detergent, thereby reducing your spending and increasing the money you can spend on the foods you want.

Stick to Your List

Never shop without a list and only purchase the items on your list. Put in writing or use a grocery list app and don’t be tempted to add extra items to the cart.

Make a Meal Plan

Create a meal plan before you grocery shop. That way, you have a plan for the week not only to know what you will eat but also to make sure the ingredients will be on hand when it’s time for meal prep (reducing those frequent drive-thru meals). Meal planning saves you time, money, and the stress of figuring out “Mom, what’s for dinner?” without resorting to frozen pizza.

Keep a Price Book

Start watching the sales cycles at your grocery store and you’ll learn when it is time to stock up on your pantry staples, so you always pay the lowest price. Keep track of the prices in a price book for every item your family needs. (Bonus: When you get good at identifying your store’s food cost cycles, you can plan a meal or two around the fresh foods on sale in any given week.)

Add a Meatless Meal

One item that can quickly increase your grocery bill is meat. Try having a meal without meat every week (like Meatless Mondays), and you’ll find that you spend less.

Vegetables are cheaper than meat and can be just as filling. Having vegetables for your main course at dinner is not only healthy but can also help with saving money. Try loaded sweet potatoes, pasta with veggie sauce, or cheese and vegetable pizza for a delicious meal.

If veggies are a hard sell for your family, try fruit salads or breakfast for dinner — pancakes and French toast are cheap and fast!

Buying fresh fruit and vegetables that are in-season can help you save even more on your monthly grocery bill. And frozen vegetables and fruit are often cheaper (and tastier) than “fresh” produce that’s not in-season.

  • Pro tip: When you’re buying meat, remember that cuts like chicken thighs are often significantly cheaper than chicken breasts, and they have more flavor. Get more tips on saving money on meat, produce, and dairy products.

There’s an App for That

There are many grocery savings apps that can help you keep tabs on food prices and create a smarter shopping list. What is great about an app is that you always have it with you on your phone, so no worry that you left a coupon at home or in your car.

Steer Clear of Mistakes at the Grocery Store

When you grocery shop, there are temptations around every corner (and I don’t just mean the ice cream and chocolate chip cookies). There are sales on the end caps, fancy signs and different tricks stores use to make you spend more money. Learn about the ways grocery stores get you to spend more money so you can avoid them.

Avoid Haste and Waste

One of the biggest ways people waste money when it comes to food is through waste. People often buy food that goes bad before they get around to eating it.

You might also waste money buying convenience foods. (That frozen meal might seem like a deal when you’re running low on time, but you’ll save more if you prepare big batches of homemade, healthy food and freeze some leftover portions for later.)

These are two ways you are killing your grocery budget. Study your habits and find ways to make changes so you aren’t wasting money on food.

  • Pro tip: One convenience food I occasionally give into is a rotisserie chicken. It’s ready to eat when I get home from the store, and you can use it in a few other meals during the week.

NOW GO SAVE MONEY ON YOUR GROCERIES!

Take the time to create a grocery budget that is both frugal and feasible for your family. Don’t try to make the dollar amount so low that it is unrealistic, or it will fail month after month. But if you pay attention while you’re shopping and keep an eye on how long the food lasts your family, you’ll soon discover that having a realistic grocery budget is the tastiest way to save money!

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Source: pennypinchinmom.com

The Risks of Playing The Stock Market

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child's hand playing chess

To the uninitiated, the stock exchange can seem like a casino, with news and social media feeds sharing stories of investors striking it rich by playing the stock market. But while there are winners, there are also losers—those who lose money playing the market, sometimes pulling their money out of the market because they’re afraid of the potential of losing money.

Playing the stock market does come with investment risks. For new investors learning how to play the stock market can be a frustrating, humbling, and in some cases, incredibly rewarding experience.

While investing is a serious business, playing the stock market does have an element of fun to it. Investors who do their research and tune into the news and business cycles can take advantage of trends that might better enable them to earn good returns on investment.

This is what you need to know about how to play the stock market, the risks involved, and what makes the market so alluring.

Playing the Stock Market: What Does it Mean?

Despite the phrase “playing” the stock market, it’s important to make the distinction between investing and gambling up front.

safe investment—in a way each investment can feel like a gamble. However, it’s important to keep in mind that the market is not a casino, and just because there’s risk involved doesn’t mean that “playing the market” is the same as playing roulette.

So what does “playing the stock market” actually mean? In short, it means that someone has gained access to and is actively participating in the markets. That may mean purchasing shares of a hot new IPO, or buying a stock simply because Warren Buffett did. “Playing,” in this sense, means that someone is investing money in stocks.

Playing the Market: Risks and Rewards

Learning how to play the stock market—in other words, become a good investor—takes time and patience. It’s good to know what, exactly, the market could throw at you, and that means knowing the basics of the risks and rewards of playing the market.

Potential Risks

In a broad sense, the most obvious risk of playing the market is that an investor will lose their investment. But on a more granular level, investors face a number of different types of risks, especially when it comes to stocks. These include market risk, liquidity risk, and business risks, which can manifest in a variety of ways in the real world.

A disappointing earnings report can crater a stock’s value, for instance. Or a national emergency, like a viral pandemic, can affect the market at large, causing an investor’s portfolio to deflate. Investors are also at the mercy of inflation—and stagflation, too.

For some investors, there’s also the risk of playing a bit too safe—that is, they’re not taking enough risk with their investing decisions, and as such, miss out on potential gains.

Potential Rewards

Risks reap rewards, as the old trope goes. And generally speaking, the more risk one assumes, the bigger the potential for rewards—though there is no guarantee. But playing the market with a sound strategy and proper risk mitigation tends to earn investors money over time.

Investors can earn returns in a couple of different ways:

•  By seeing the value of their investment increase. The value of individual stocks rise and fall depending on a multitude of factors, but the market overall tends to rise over time, and has fully recovered from every single downturn it’s ever experienced.
•  By earning dividend income. Dividends can also be reinvested, in order to further grow your investments.
•  By leaving their money in the market. It’s worth mentioning that the longer an investor keeps their money in the market, the bigger the potential rewards of investing are.

How to Play the Stock Market Wisely

Nobody wants to start investing only to lose money or otherwise see their portfolio’s value fall right off the bat. Here are a few tips regarding how to play the stock market, that can help reduce risk:

Invest for the Long-term

The market tends to go up with time, and has recovered from every previous dip and drop. For investors, that means that simply keeping their money in the market is a solid strategy to mitigate the risks of short-term market drops. (That’s not to say that the market couldn’t experience a catastrophic fall at some point in the future and never recover. But it is to say: History is on the investors’ side.)

Consider: If an investor buys stocks today, and the market falls tomorrow, they risk losing a portion of their investment by selling it at the decreased price. But if the investor commits to a buy-and-hold strategy—they don’t sell the investment in the short-term, and instead wait for its value to recover—they effectively mitigate the risks of short-term market dips.

Do Your Research

It’s always smart for an investor to do their homework and evaluate a stock before they buy. While a gambler can’t use any data or analysis to predict what a slot machine is going to do on the next pull of the lever, investors can look at a company’s performance and reports to try and get a sense of how strong (or weak) a potential investment could be.

Understanding stock performance can be an intensive process. Some investors can find themselves elbow-deep in technical analysis, poring over charts and graphs to predict a stock’s next moves. But many investors are looking to merely do their due diligence by trying to make sure that a company is profitable, has a plan to remain profitable, and that its shares could increase in value over time.

Diversify

Diversification basically means that an investor isn’t putting all of their eggs into one basket.

For example, they might not want their portfolio to comprise only two airline stocks, because if something were to happen that stalls air travel around the world, their portfolio would likely be heavily affected. But if they instead invested in five different stocks across a number of different industries, their portfolio might still take a hit if air travel plummets, but not nearly as severely as if its holdings were concentrated in the travel sector.

Use Dollar-cost Averaging

Dollar-cost averaging can also be a wise strategy. Essentially, it means making a series of small investments over time, rather than one lump-sum investment. Since an investor is now buying at a number of different price points (some may be high, some low), the average purchase price smooths out potential risks from price swings.

Conversely, an investor that buys at a single price-point will have their performance tied to that single price.

The Takeaway

While playing the market may be thrilling—and potentially lucrative—it is risky. But investors who have done their homework and who are entering the market with a sound strategy can blunt those risks to a degree.

By researching stocks ahead of time, and employing risk-reducing strategies like dollar-cost averaging and diversification when building a portfolio, an investor is more likely to be effective at mitigating risk.

With SoFi Invest®, members can devise their own investing strategy, and play the market how they want, when they want. Whether you’re interested in short-term trading or have your eyes on a longer-term prize, SoFi Invest is a way to dip your toes into the stock market and start investing today.

Find out how to get started playing the stock market with SoFi Invest.

SoFi Invest®
The information provided is not meant to provide investment or financial advice. Investment decisions should be based on an individual’s specific financial needs, goals and risk profile. SoFi can’t guarantee future financial performance. Advisory services offered through SoFi Wealth, LLC. SoFi Securities, LLC, member FINRA / SIPC . The umbrella term “SoFi Invest” refers to the three investment and trading platforms operated by Social Finance, Inc. and its affiliates (described below). Individual customer accounts may be subject to the terms applicable to one or more of the platforms below.
1) Automated Investing—The Automated Investing platform is owned by SoFi Wealth LLC, an SEC Registered Investment Advisor (“Sofi Wealth“). Brokerage services are provided to SoFi Wealth LLC by SoFi Securities LLC, an affiliated SEC registered broker dealer and member FINRA/SIPC, (“Sofi Securities).
2) Active Investing—The Active Investing platform is owned by SoFi Securities LLC. Clearing and custody of all securities are provided by APEX Clearing Corporation.
3) Digital Assets—The Digital Assets platform is owned by SoFi Digital Assets, LLC, a FinCEN registered Money Service Business.
For additional disclosures related to the SoFi Invest platforms described above, including state licensure of Sofi Digital Assets, LLC, https://www.sofi.com/legal.
Investment Risk: Diversification can help reduce some investment risk. It cannot guarantee profit, or fully protect in a down market.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
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10 Money Management Tips to Teach Your Kids About Finance

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Knowing how to handle finances is one of the most basic and important life skills. When you understand how to handle your money, you can avoid falling into financial problems and risks. So teaching your children about money is a key step in preparing them for adulthood. Teach them values and terms, such as saving, and they will grow to possess good money habits even up to adulthood. Broaden your knowledge of finance and money matters and pass them to your kids by reading up. Read LoanStart blog for financial advice and learn the intricacies of financing and loans and how they can help benefit your current financial situation.

1. Integrate Money Into Daily Life

Get your children involved with money. For example, you can have a young child join you at the grocery store to help with shopping. Ask them to compare prices of similar items and discuss why the items may be different. For older children, you might allow your child to watch or participate when you pay bills. Explain the process to them. Let your child know how much money comes in each month and how much you spend on expenses. Show to them how expenses add up.

Involving your children in household finances will help build their financial knowledge at an early age.

2. Give Your Child an Allowance, But Consider the Frequency and Amount

There are several benefits to giving an allowance. For one thing, when your child has money of their own that they can spend at their discretion, they will be incentivized to learn how to handle it. Once the allowance is gone, your child will have to save up to buy necessary items. You can teach your child to be responsible for money management and living within their means by sticking to the rules. Disperse allowance on a regular schedule, and never extend "credit."

Some financial experts recommend giving out an allowance to be budgeted once a month rather than once a week. This gives the child a longer amount of time on how to manage a given amount of money. Also, the larger the amount of money, the more management skills are to be learned.

3. Model Good Financial Behavior

Your children look up to you, so your decisions with money will set an example. Are you late on your bills? Are you living beyond your means? Get your financial situation in order and be honest with your children. Let them know the reason behind your financial behavior so that you can discuss financial planning and management as a family.

4. Teach Your Children About Choices

Let them know the reason behind your financial behavior and embark on sound financial planning and management as a family.

Make sure your children know that there are more ways to use money beyond just spending it. Teach your child to save, invest, or donate to charity, and explain why these options are worth the effort, even if they do not offer the short-term satisfaction that comes with making a purchase.

5. Provide Extra Income Opportunities

Occasionally, you can offer your child an opportunity to make a small amount of extra income by having them do some chores around the house. This will teach them early on about the value of earning money. You can then help them decide what to do with the extra money they have earned.

6. Teach Your Child How to be a Wise Consumer

Before your child buys something new, discuss with them the alternative ways of spending money to emphasize the value of making choices. Teach them to compare shops and items for prices and quality. Show them how advertisers persuade people to buy their products. Encourage your kids to be savvy and critical of ads and commercials.

7. Teach Your Child a Healthy Attitude Towards Credit 

Teach your child how to handle credit. When you think they are old enough to understand what credit is, allow them to borrow an extra amount of money from you to make a major purchase. Talk to them and negotiate how much amount your child will pay you each week from their weekly allowance, and then collect the money and keep track of the remaining balance each week until the debt is repaid.

8. Involve Your Child in Family Financial Planning

Let your child see how you plan your budget, pay bills, how you shop carefully, and how you plan major expenditures and vacations. Explain to them that there are affordable choices, and allow the kids to participate in the decision-making process. You can set a family goal that everyone can work towards.

Explain to your kids that there are affordable choices, and allow them to participate in the decision-making process.

9. Avoid Impulse Buys

Children are prone to impulse buys when they find something cute or eye-catching. Instead of giving in and buying the item for them, let your child know that they can use their savings to pay for the item. However, encourage your child to wait at least a day before they purchase anything above a given benchmark–for example, 15 dollars. The item will still be there the next day and they will have properly decided with a level head if they still want the item.  

10. Get Them Saving for College

College is an important phase that can affect the future of your child. There’s no time like the present to have your teen saving for college. If they plan on working a summer job you can take a portion of that amount and put it on a college savings account. Your child will feel more responsible since their future is at stake with how much they save.

Source: quickanddirtytips.com

Budgeting Help

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Free!

How Mint offers budgeting help

Ready to start budgeting and tracking your money? See our article Budgeting Tips from Mint — and subscribe to our blog for more budgeting help.

Budgeting Calculators

We’ve also got some calculators that can help you figure out exact dollar amounts for your budget:

How Much do I Need for Emergencies? Saving enough money for emergencies is the first step in setting a budget. Don’t be caught by surprise. How much do you need in your emergency fund?

How Much Should I Save to Reach my Goal? Are you budgeting for a house, vacation or retirement? Quickly find out if you’re saving enough to reach your goals on schedule.

Value of Reducing or Foregoing Expenses. Small changes in your daily routine can add up to big budget savings. Find out how much.

How Much Does Inflation Impact my Standard of Living? How much will you need in 5, 10 or 30 years to maintain your standard of living?

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What You Need to Know About Budgeting for Maternity Leave

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Prepping for a new baby’s arrival might kick your nesting instinct into high gear, as you make sure everything is just right before the big day. One thing to add to your new-baby to-do list is figuring out how to financially prepare for maternity leave if you’ll be taking time away from work.

Lauren Mochizuki, a nurse and budgeting expert at personal finance blog Casa Mochi, took time off from work for the births of both her children. Because she had only partial paid leave each time, she says a budget was critical in making sure money wasn’t a source of stress.

“The purpose of budgeting for maternity leave is to have enough money saved to replace your income for your desired leave time,” Mochizuki says.

But the question “How do I budget for maternity leave?” is a big one. One thing’s for sure—the answer will be different for everyone, since not everyone’s leave or financial situation is the same. What matters most is taking action early to get a grip on your finances while there’s still time to plan.

Before you get caught up in the new-baby glow, here’s what you need to do to financially prepare for maternity leave:

1. Estimate how long you’ll need your maternity budget to last

To financially prepare for maternity leave, you need to know how long you plan to be away from work without pay.

The Family and Medical Leave Act (FMLA) allows eligible employees up to 12 weeks of job-protected, unpaid leave from work per year for certain family and medical reasons, including for the birth of a child. Some employers may also offer a period of paid leave for new parents.

The amount of unpaid maternity leave you take will determine the budget you’ll need while you’re away.

When estimating how long you’ll need your maternity budget to last, Mochizuki says to consider how much unpaid leave you plan to take based on your personal needs and budget. For example, you could find you’re not able to take the full period offered by FMLA after reviewing your expenses (more on that below) and how much you have in savings.

Even if your employer does offer paid maternity leave, you may decide to extend your time at home by supplementing your paid leave with unpaid time off, Mochizuki says.

Keep in mind that despite all of your budgeting for maternity leave, your health and the health of your baby may also influence how much unpaid time off you take and how long your maternity leave budget needs to stretch.

As you’re financially preparing for maternity leave, make sure your spouse or partner is also considering what benefits may be available to them through their employer. Together you should know what benefits are available for maternity or paternity leave, either paid or unpaid, and how to apply for them as you jointly navigate the budgeting for maternity leave process. You can then decide how to coordinate the amount of time each of you should take and when that leave should begin.

Contact your HR department to learn about your company’s maternity leave policy, how to apply for leave and whether there are any conditions you need to meet to qualify for leave. Ask if you’re able to leverage sick days, vacation days or short-term disability for paid maternity leave.

2. Babyproof your budget

When budgeting for maternity leave, make sure you review your current monthly budget to assess how budgeting for a new baby fits in.

In Mochizuki’s case, she and her husband added a category to save for maternity leave within their existing budget for household expenses (e.g., mortgage, utilities, groceries).

“We treated it as another emergency fund, meaning we had a goal of how much we wanted to save and we kept working and saving until we reached that goal,” Mochizuki says.

Figure out what new expenses might be added to your budget and which existing ones might reduce to financially prepare for maternity leave.

As you financially prepare for maternity leave, consider the following questions:

  • What new expenses need to be added to your budget? Diapers, for instance, can cost a family around $900 per year, according to the National Diaper Bank Network. You may also be spending money on formula, bottles, wipes, clothes and toys for your new one, all of which can increase your monthly budget. And don’t forget the cost of any new products or items that mom will need along the way. Running the numbers with a first-year baby costs calculator can help you accurately estimate your new expenses and help with financial planning for new parents.
  • Will any of your current spending be reduced while you’re on leave? As you think about the new expenses you’ll need to add when budgeting for maternity leave, don’t forget the ones you may be able to nix. For example, your budget may dip when it comes to commuting costs if you’re not driving or using public transit to get to work every day. If you have room in your budget for meals out or entertainment expenses, those may naturally be cut if you’re eating at home more often and taking it easy with the little one.

3. Tighten up the budget—then tighten some more

Once you’ve evaluated your budget, consider whether you can streamline it further as you financially prepare for maternity leave. This can help ease any loss of income associated with taking time off or counter the new expenses you’ve added to your maternity leave budget.

Becky Beach, founder of Mom Beach, a personal finance blog for moms, says that to make her maternity leave budget work—which included three months of unpaid leave—she and her husband got serious about reducing unnecessary expenses.

Find ways to reduce costs on bills like insurance and groceries to help save for maternity leave.

Cut existing costs

As you budget for maternity leave, go through your existing budget by each spending category.

“The best tip is to cut costs on things you don’t need, like subscriptions, movie streaming services, new clothes, eating out, date nights, etc.,” Beach says. “That money should be earmarked for your new baby’s food, clothes and diapers.”

Cutting out those discretionary “wants” is an obvious choice, but look more closely at other ways you could save. For example, could you negotiate a better deal on your car insurance or homeowner’s insurance? Can you better plan and prep for meals to save money on food costs? How about reducing your internet service package or refinancing your debt?

Find ways to earn

Something else to consider as you budget for maternity leave is how you could add income back into your budget if all or part of your leave is unpaid and you want to try and close some of the income gap. For example, before your maternity leave starts, you could turn selling unwanted household items into a side hustle you can do while working full time to bring in some extra cash and declutter before baby arrives.

Reduce new costs

As you save for maternity leave, also think about how you could reduce expenses associated with welcoming a new baby. Rather than buying brand-new furniture or clothing, for example, you could buy those things gently used from consignment shops, friends or relatives and online marketplaces. If someone is planning to throw a baby shower on your behalf, you could create a specific wish list of items you’d prefer to receive as gifts in order to offset costs.

4. Set a savings goal and give every dollar a purpose

When Beach and her husband saved for maternity leave, they set out to save $20,000 prior to their baby’s birth. They cut their spending, used coupons and lived frugally to make it happen.

In Beach’s case, they chose $20,000 since that’s what she would have earned over her three-month maternity leave, had she been working. You might use a similar guideline to choose a savings goal. If you’re receiving paid leave, you may strive to save enough to cover your new expenses.

Setting a savings goal and tracking expenses before the new baby arrives is an easy way to save for maternity leave.

As you make your plan to save for maternity leave, make sure to account for your loss of income and the new expenses in your maternity leave budget. Don’t forget to factor in any savings you already have set aside and plan to use to help you financially prepare for maternity leave.

Once you’ve come up with your savings target, consider dividing your maternity savings into different buckets, or categories, to help ensure the funds last as long as you need them to. This could also make it harder to overspend in any one category.

For instance, when saving for maternity leave, you may leverage buckets like:

  • Planned baby expenses
  • Unexpected baby costs or emergencies
  • Mother and baby healthcare

“The purpose of budgeting for maternity leave is to have enough money saved to replace your income for your desired leave time.”

– Lauren Mochizuki, budgeting expert at Casa Mochi

Budgeting for maternity leave—and beyond

Once maternity leave ends, your budget will evolve again as your income changes and new baby-related expenses are introduced. As you prepare to go back to work, review your budget again and factor in any new costs. For example, in-home childcare or daycare may be something you have to account for, along with ongoing healthcare costs for new-baby checkups.

Then, schedule a regular date going forward to review your budget and expenses as your baby grows. You can do this once at the beginning or end of the month or every payday. Take a look at your income and expenses to see what has increased or decreased and what adjustments, if any, you need to make to keep your budget running smoothly.

Budgeting for maternity leave takes a little time and planning, but it’s well worth the effort. Knowing that your finances are in order lets you relax and enjoy making memories—instead of stressing over money.

The post What You Need to Know About Budgeting for Maternity Leave appeared first on Discover Bank – Banking Topics Blog.

Source: discover.com

The Financial Truths COVID-19 Has Taught Us

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The COVID-19 pandemic has taught us all some hard lessons. Here are six hard financial truths we’ve learned from 2020.

This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.

Source: thepennyhoarder.com

Amazon Prime Card offering new Whole Foods card art, limited-time bonus

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On Jan. 20, Chase announced a new card design option for the Amazon Prime Rewards Visa Signature card featuring Whole Foods Market art and added a limited-time sign-up bonus offer for those who prefer to shop at Whole Foods in-store.

Amazon has become a leader in grocery shopping during the pandemic, with consumers avoiding grocery stores due to health safety concerns – not to mention the convenience of shopping from a web browser. Amazon Prime members can enjoy speedy free delivery, as well as get access to online shopping at Whole Foods Market and special member deals when shopping in-store.

They can also count on extra savings if they carry the Amazon Prime Rewards card from Chase – or if they’re looking to apply in the next few weeks.

Here’s what you need to know.

Amazon Prime Rewards Visa Signature card
Amazon Prime Card Whole Foods

Our rating: 3.8 out of 5
Score required: Good to excellent
Type of card: Cash back
Spending categories: Amazon, Whole Foods, restaurants, gas stations, drug stores
  • 5% back on Amazon.com and Whole Foods purchases
  • 2% back on restaurant, gas station and drug store purchases
  • 1% back on other purchases
  • $70 Amazon.com gift card upon approval or $100 statement credit after spending $100 at Whole Foods in first 2 months
  • No annual fee

Our take: While the Amazon Prime Rewards card offers excellent cash back on Amazon and Whole Foods purchases, it might not be the best choice for customers who don’t currently have a Prime membership and aren’t looking to subscribe.

A new Whole Foods card design and limited-time offer

Chase introduced a new card design option for new Amazon Prime Rewards cardholders, featuring Whole Foods Market art. New cardmembers with an eligible Prime membership can choose the new design when they apply for the card. If you’re an existing cardholder and would like to switch to the new design option, you can call in to request a new card after Jan. 22.

If you frequently shop at Whole Foods in-store, the new limited-time introductory offer can also be exciting news for you. Through March 3, new Amazon Prime Rewards Visa cardholders can earn a $100 statement credit after spending $100 in Whole Foods Market stores in the first two months from account opening. Alternatively, they can still choose the standard $70 Amazon gift card offer as a sign-up bonus.

Considering the standard bonus is lower, the new temporary offer might be a better deal. On the other hand, if you avoid shopping in-store or normally use Amazon Fresh for buying groceries, the gift card might make more sense for you.

Should I start shopping at Whole Foods if I have an Amazon credit card?

If you already shop at Whole Foods, the 5% back with the Amazon Prime Rewards Signature Visa and 10% off specially marked items is a good deal. The discounts, though, don’t make Whole Foods cheaper than other grocery stores.

In fact, according to a study from 2019, Whole Foods remains the most expensive grocery store with its prices at 34% above Walmart, which was reported to have the lowest prices overall. If your goal is to save on groceries, Whole Foods is evidently not the best option – even if you carry the Amazon Prime card.

Other cards to consider

The Amazon Prime Card isn’t the only option you should consider if you often shop on Amazon or at Whole Foods.

See related: Which is the best card to use on Amazon.com purchases?

For instance, with the Chase Amazon.com Rewards Visa card, you can get a $50 Amazon gift card upon approval and earn 3% on Amazon and Whole Foods purchases, 2% percent at restaurants, gas stations and drugstores and 1% on all else. If you don’t have a Prime membership and aren’t looking to subscribe, this is a good option, since the card doesn’t require a cardholder to be a member.

If you do have a membership and shop on Amazon a lot, the Amazon Prime card is a better deal. With 5% for purchases made at Whole Foods and on Amazon, 2% at restaurants, gas stations and drugstores and 1% on all else, this card is hard to beat for Amazon and Whole Foods lovers.

If you’re looking for a card to buy groceries, consider the Blue Cash Preferred® Card from American Express, which could save you more than the Amazon Prime Visa at Whole Foods. Why? Blue Cash Preferred cardholders earn 6% cash back at U.S. supermarkets (up to $6,000 in purchases per year, then 1%).

See related: Best credit cards for grocery shopping

Bottom line

You can now stack your rewards at Whole Foods, earning cash back and the limited-time bonus with the Amazon Prime Card, and you can get extra savings from the loyalty program. Whether it makes sense to shop at Whole Foods, even with rewards cards and the loyalty program, is up to you.

Source: creditcards.com

Best credit cards for Airbnb

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Many of us are avoiding travel during the pandemic.

But if you have to shelter in place under quarantine once you get to your destination, wouldn’t you rather do it in an environment that at least seems more within your control?

If the choice is between a hotel where you must trust your experience to a faceless corporation or a local host you can talk to through homestay sites like Airbnb and Vrbo, the latter may be the better option for these times (provided you don’t violate their party guidelines).

Whatever option you choose, credit card issuers now reward homestays with points and cash back in the same way they’ve long doled out rewards for hotels and other travel expenses.

These are the best cards on the market for homestays like Airbnb.

See related: Strategies for planning 2021 travel

Wells Fargo Propel American Express® card: Best no-annual-fee, high rewards option

  • Chase Sapphire Reserve: Best introductory bonus
  • Bank of America® Premium Rewards® credit card: Best for bonus rewards
  • Capital One Venture Rewards Credit Card: Best flat-rate miles card
  • Amazon Prime Rewards Visa Signature card: Best for online shopping
  • Discover it® Miles: Best no-fee option

    • Wells Fargo Propel American Express® card: Best no-annual-fee, high rewards option

    The Wells Fargo Propel American Express card includes arguably one of the highest rates of return on points for some of the most popular redemption categories out there, including homestays like Airbnb and Vrbo.

    The greatest advantages of this card – besides earning 3 points per dollar spent on some popular spending categories – are that there’s no point limit or expiration, no annual fee and no rotating categories that you constantly have to remind yourself to activate. You get three times the points in the relevant categories all the time without restriction, with travel – including all homestays – and transit being one of those prominent categories.

    The card also charges no foreign currency conversion fee, so buying things abroad is less expensive. If that weren’t enough, here’s what you also get:

    • 3 points per dollar spent on travel and transit purchases
    • 3 points per dollar spent on eating out and ordering in
    • 3 points per dollar spent on gas and rideshares
    • 3 points per dollar spent on select streaming services such as Hulu, Netflix, Sirius XM and Spotify Premium
    • 1 point per dollar spent everywhere else
    • No annual fee
    • No points limit or expiration
    • Premium access to presale tickets, offers and protections from American Express
    • 20,000 points when you spend $1,000 in the first three months

    ProudMoney.