B is For Beware of Breaking the Family Bank

Believe it or not the term, “breaking the bank” originated as a gambling term when a player won more than the house hand. Ironically the same term has found its way into our lives most likely due to a large number of people who began to accumulate credit card debt and spend at or above their household means. This is where making unlimited purchases on credit, when your bank account cannot pay for the balance is called “breaking the bank”.

This lifestyle can cause much stress for families especially when one member is living within their means and making solid and difficult choices, and the other partner tends to believe they can put it on a credit card and deal with it later – only to find themselves in financial ruins.  Let’s face it, we all have those moments when we get a travel bug, start a new hobby, want the latest technology or find a constant need for shopping. Most of us however, realize that over spending cannot go on forever when there is nothing left in the bank.

To help avoid this pitfall and practice good habits that will improve your family’s financial health and security and not “Break” the Family Bank, let’s follow some simple advice:

Create a Budget Start with a basis monthly household budget and stick to it.

Examine your monthly bills – Cut unnecessary, luxury spending (coffee, eating out, excessive cable).

Pay You First This means savings becomes a priority.

Discuss Discretionary Spending Communication can avoid impulse spending and help you stick with your budget. 

Avoid Credit Card Debt This is the big one! If you don’t need it, don’t make the purchase. If it’s a necessity like an appliance, have a plan of action to pay it off to avoid long term interest.

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About Ann Zuraw

Ann Zuraw, the voice behind "Chicks, Chat and Change", is a Certified Financial Planner (CFP®), Chartered Financial Analyst (CFA®), and Certified Divorce Financial Analyst (CDFA™).If you have comments on this post contact Ann Zuraw

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