The term breadwinner conjures up different emotions. On the one hand there are the positives. You're making money- often significantly more than your family counterpart. This gives you a sense of pride. Of responsibility.
On the other hand are the negatives. The money you are making is not guaranteed to be a lot. Being a breadwinner doesn't mean you're raking in the dough. Sometimes it means you're just making enough to get by. And the responsibility mentioned earlier? This can create feelings of stress.
That's why when you're the breadwinner in your family dynamic you must have a firm grasp on sound budgeting and financial principles. While your total family income may be supplemented by other revenue streams, your contributions are seen as the most impactful. Sometimes they are the only ones, too! Such is the case with individuals whose partners are having difficulty finding employment, are a stay-at-home parent or the both of you have come to a decision that one income stream is enough to support the life you would like to live.
No matter the situation, breadwinners need to manage their finances wisely, and though this is a major task, it does not have to be a daunting one.
Start with Clear Communication
There is nothing beneficial about financial secrets between partners. That's why a responsible family budget starts and ends with effective communication. This covers where you stand, where you want to be and how soon you want to get there. Be open with your partner about all of this, and make sure they are with you.
Talk about your concerns. If they or you have issues with any part of your budget, bring it out in the open. This allows you to implement the necessary strategies for success. Setting aside time each month to talk about your finances will pay huge dividends when it comes to emotional and financial health.
Make a Plan and Stick to It
Knowing where the money you make is spent is critical in any financial circumstance. This is heightened when you are the primary breadwinner in the family. Create a spreadsheet of recurring expenses and see how your income compares. Do you have enough to cover all of these costs, or are you falling into more debt? If that is the case you will need to find ways you can ‘trim the fat' or add an additional source of revenue to compensate. This is the first step in creating a sound financial plan.
The next step is setting a goal. By setting financial goals you will position yourself to better strategize for them. Make most of your goals about savings and accounts that will generate positive cash-flow and financial security. Think not only general savings but retirement options, tuition costs, and other secure investments. These will increase cash reserves.
The third step is developing a financial strategy and executing it to reach those goals. Most of the time this will revolve around your income vs. expenses. That's why you listed all expenses first! A good strategy to frame off of is the 50/30/20 plan. This is where 50 percent of your income goes towards necessary expenses, 30 percent towards luxury items and 20 percent towards savings.
The final step in a sound financial plan for breadwinners is sticking to it. We all are prone to impulsiveness. Don't let it get to you. Tell yourself and your partner how great it will feel in the long run. By forgoing impulsive purchases and reactions you set your family up for future financial well-being.
Nobody likes envisioning a future where their family is impacted by sudden death, illness, or other debilitating circumstances. Planning for such events, however, is necessary. Breadwinners need a plan should anything happen to them. In such situations, your family will be significantly impacted by the loss of income. Some of the financial blow can be blunted by the right insurance plans.
Life, disability, and other types of insurance protect the family of breadwinners in case of emergency. Look for not only an affordable plan but one that may offer additional coverages you can take advantage of. While you will need to pay a higher cost each month, you will do so with greater peace of mind. And though there is the chance you will never need the insurance, it is always good to have.
Look for Tax Breaks and Other Financial Help
Come tax season a breadwinner can often take advantage of tax breaks and their tax return. Since you are often able to combine incomes with your partner and file under one return, you can lower your own tax burden. This benefits your family as you can often claim a higher return (that is if you don't owe money. If you do you will owe less). Hire a local CPA to help you find all the tax breaks you can claim. They may be more expensive than automated online software, but they often find more ways for you to save.
Other sources of financial help should also be sought. These can come in the form of government programs, community offerings, or financial assistance due to hardship. Look for them anywhere and often. Your local library, child's school, the fitness center, etc. People recognize others need help, and there are a lot more options out there than you would think.
Breadwinners have a lot of responsibility, socially and financially. While some do make enough to support their family without worry, many find themselves stressed with the added pressure of being the main source of income. To alleviate that stress requires an understanding of sound financial principles.
Always, always, seek information and advice. Don't let pride get in your way. Instead recognize how planning a responsible budget sets up you and those you are most concerned about for success no matter what the future holds.