In this article, I used ChatGPT to get some advice on how I can manage my finances.
Photo by Maximalfocus on Unsplash
When I became a parent about ten months ago, I had to reduce the hours I spent in my side hustle drastically.
Working extra hours on the weekend no longer became an option. It was an uphill battle in trying to make significant lifestyle changes while, at the same time, maintaining a tight budget.
As a result, I lost a significant portion of my income. Not only that, the cost of raising children is steadily increasing. With all of that combined, it was a massive blow to my finances.
Thus, having a checklist of financial tips could help.
I will be sharing with you tips from ChatGPT and inserting my comments between paragraphs:
Establish a budget:
Create a monthly or yearly budget that considers all your income and expenses, including regular expenses like groceries and housing costs, and irregular expenses like medical bills.
Having a budget could do wonders, especially if you’re starting. Usually, what makes or break a budget are the hidden costs, such as subscriptions that deduct from your bank account quietly. Shush…
Prioritize expenses:
Determine which expenses are the most essential and make those a priority, such as housing, food, and healthcare.
What I would do is to pay yourself first. Put money aside for your savings before putting the rest aside for expenses.
Start saving:
Begin a savings plan and make regular contributions to it. This can include an emergency fund or a long-term savings plan for your children's education or retirement.
Experts advise us to save at least 3–6 months of expenses, but if there’s anything we could learn from COVID, it is to have more than 12 months saved up.
Invest in insurance:
Ensure you have adequate insurance coverage for health, life, and property to protect your family from financial losses in unexpected events.
Goes without saying, it was my first significant expense after being paid a salary.
Avoid debt:
Try to steer clear of high-interest debt, such as credit card debt, and create a plan to pay off debt quickly if you have any.
Of course, hands down, many of us are not good with debt, but the caveat is that, managing debt smartly could pay you dividends. Using credit cards could save you more through cashback/rebates and miles. Use it smartly.
Teach financial literacy:
Educate your children on budgeting, saving, and wise spending habits to help them develop good financial practices that will benefit them in the future.
Yes! Teach them early. Many of us are not taught financial literacy and it shows in university.
Regularly review and adjust:
Continuously review your budget and make adjustments as necessary, as your income and expenses may change over time.
Conclusion
ChatGPT seems to get it right although a bit generic. However, I think it is a great starting point especially for parents who are unsure of what to do next.
I will be doing more of such content and react to the ‘advices’ ChatGPT has to offer.
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