One of the greatest pitfalls to a parent's budget, are those pesky extra school expenses, birthday parties, before or after school care, and holidays. How can you possibly plan for these expenses? How can you keep them from breaking your budget? Here are five steps to have your cake, and party too:

1) Find out how much you spend on "child" expenses. Take a look at your past year's budget and identify which expenses you incur on your child's behalf. Some of the common ones are before and after-school care, uniforms or school clothes, school supplies, field trip costs, fund-raising events (those candy bars and other things kids bring home to sell), birthday cards and party gifts, Halloween costumes, Valentine cards, Christmas gifts, movie tickets, and so on. Leave nothing out. Jot them down on paper, or use a spreadsheet program like Excel (recommended.)

2) Tally up all the expenses you incurred, and divide them by the months in the year (12). This will give you an idea how much you need to dedicate to these expenses each month. If you find they greatly exceed your budget because of that pesky credit card, time to cut that card! The point is to make a budget that you can live with in your means. Now break down these expenses into the amount of paychecks you receive each month to know how much you need to set aside.

3) Create the child-care budget and project it into the future. In other words, start making entries as if you already spent the money (which you eventually will.) For example:

DESCRIPTION: DATE: AMOUNT: BALANCE:
Opening Balance 08/15/2007 $500.00 $500.00
After-school care 08/16/2007 -$200.00 $300.00
College savings plan 08/16/2007 -$75.73 $224.27
Baseball uniforms 08/20/2007 -$150.00 $74.27
Paycheck 08/21/2007 $300.00 $374.27

Now remove these expenses from your personal budget. If you haven't planned these expenses already, time to play with your personal numbers to be able to fund your childcare budget account. You may need to tweak your own finances quite a bit before being able to take this step, and saving up enough to be able to initially fund this account. Tax returns make a great way to fund a new budget.

4) Open a separate fee-free checking account for your new budget. More and more banks offer free checking if there is a regular deposit - either by payroll deduction, or by transfer from another account. One bank that currently offers this (and interest on the checking) is BankAtlantic. (http://www.bankatlantic.com) They have an on-line service with free bill payments. This eliminates the problem of co-mingled funds, and should be used solely to pay for expenses within the budget.

5) Stick to the budget. This can be as easy or as difficult as you make it. One way to keep tabs on your budget's financial health is to automate as many payments as you can using the bill payment services of your bank. Another way is to write the dollar amounts on the checks before going to the store to shop for birthday or other holiday events. If you spend too much, time to drop an item or two. Get change back? Time to let your child have that frozen yogurt.

As with any budget, it takes diligence, perseverance and self-discipline to make it work. If you do, you just may find the money for that new car when they turn 18.

Learn more about this author, Martin J. Stephens.
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