February 13, 2011

How To: Budget Your Skating (and make it work!)

OK here comes a mammoth post! I was thinking a lot today about budgeting for figure skating. As a parent, how do you manage to do this, especially if you have a family consisting of more than one child?

Between ice patches, coaching, costumes, boots and blades, music cutting, travel expenses and petrol money, it can get crazy expensive real fast. You really need a hold of your money, and a good sense of when enough is enough.
This last point is where most skating families go wrong, as the more invested physically, financially and emotionally, the more will be invested in the hope that just that little bit more will cause a breakthrough in the skaters' career. Lucidity is the key, and not something you find in abundance in ice rinks at 5.30am, as you huddle under multiple blankets, cradling a hot cup of instant coffee (bleugh).

Budgeting isn't just about having enough money to go around each month. It's so much more than that. It's ensuring your child (or children) have enough money to set them up in life. Pay those tuition fees. Pay for that business set-up, or the room to rent they need in order to go to that great school they got accepted to. The choices you make now as a parent will resound throughout your child's young adult life. So how do you get it right?

Of course the fundamental factor is going to be the amount of income your household generates. Often-times families with larger incomes will already have certain measures in place, such as college funds. Families on tighter budgets may not, and money seems to run away that much easier when you don't have much of it.

Decide how much needs to be put away to ensure a lump-sum for your child when he or she will need it most (see above). O.k, if your kid is 10 years old you don't know whether they'll be going to Harvard, but chances are they'll need money for something to help set them up in life. As a parent, you don't want to see them struggle, or worse still resent the fact you didn't plan better for them.

Once you've decided on how much you want your child to have, calculate how much needs to be put away, over how many months or years, in order to assure you reach your goal. For example, if you want your child to have $25,000 in ten years time, you need to put away $209 each month for a total of 120 months (10 years). This will give you a total of $25,080. Place this on an account with a good interest rate and you could really boost your earnings too. Some accounts allow you to put money in but not take any out, which is the foolproof way of locking that special money away without the threat of having to use it for that emergency. Use websites such as moneysupermarket.com (this is a British website but use Google to find the equivalent service in your country).

Now you know how much you have left every month for current activities. You'll know what your monthly spending is for all the essentials such as food, savings accounts, pension schemes, hobbies, etc., so now you can see more clearly how much money you really have left over to invest in your child's skating career. Write down a figure, don't worry if it's low, you're not the only one in this situation and many skating families make it work on a shoestring budget. You just need to be in the right frame of mind.

Buy yourself an accounts book if you're a traditional sort of person, or download a great spreadsheet or accounting program for your computer, to keep track of everything you spend that's related to skating. I recommend these wonderful OpenSource (and thus free) programs: OpenOffice (an entire suite much like Microsoft Office, it includes word processing, spreadsheets and presentation programs, all absolutely free), and GnuCash (a great accounting program which requires a little investment in time and effort to learn, but will transform your finances forever!).

Figure out your one-time-per-season expenses. These will include (but are not limited to): costumes, music cutting, choreography lessons, boots, blades, new sportswear for training, tights, etc.. Some of these will need to be purchased at the beginning of the season (costumes, music and choreography), whereas others make more sense to buy at the seasons end (boots and blades - easier to break them in during the off-season than before a spate of competitions). Deduct these expenses from the figure you wrote down a few steps earlier.

Figure out where the majority of your skating budget goes in any given month. Chances are, it'll be in ice patches, coaching fees, and gas money to get to and from the rink. Those should be quite constant sums of money and thus can be budgeted over long periods of time fairly consistently (perhaps bar the gas money as prices do fluctuate). This will now give you an idea of how much is left over each month.

Look at your skating calendar. You may have to make choices as to which events you attend, and although this should be discussed with the coach, don't allow yourself to be persuaded to attend events which go over your budget. If qualifying events are in your area, then don't cross 5 states to get to one. Be practical and plan ahead to avoid disappointment and over-spending. Now that you know which events you will be attending this season, calculate the cost of these trips and define how much money you will need for each. Factor in travel expenses, eating out, coaching fees and coach travel expenses. For example, if you will be attending an event in 3months time that will cost $300, start putting money aside. If you can't afford $100/month savings, try putting $25/week aside. Of course you can see this amounts to the same money, but parting with smaller sums more often, is more manageable than larger ones, as often we spend those $25 on things we didn't really need (that $7 Starbucks anyone? That L'oreal nail varnish at $10 when we could have bought shop-brand for $3?).

Keep filling in that accounts book. It will help you see where you're haemorrhaging money. Maybe you need to stop buying your coach coffee each morning, for a total of $15/week. Or perhaps quality needs to replace quantity in the form of less ice time (instead of 2 hours, 1 of which is spent chatting to friends instead of actually training, buy 1 hour of ice time and tell your skater it's time to work).

As long as you keep detailed accounts of what goes where, you simply can't go wrong. You will need to be realistic and lucid though. Not all skaters are going to the World Championships, and as such, budget and schedule should fit their potential. Evidently every parent believes their child is golden, and deserves the very best. But we don't always live in ideal situations and it's your responsibility to make sure your family live a happy life within its means. Good luck, and keep on budgeting!!

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