Whether your family is simply trying to track their money or feeling the burn from a low moving economy, budgeting is a must. Creating a family budget will force your family to think about their spending, see just how much money they actually have, identify where that money is going and know how to make the most of it. Creating a family budget and sticking to it is not difficult if you follow the tips listed below.
*Get the whole family together
The first step to creating a family budget is to get the entire family together to discuss their spending. All members need to be present for this budget meeting including the children. Each person should bring their check stubs or other sources of income with them in order to provide a true picture of the family’s income. Once this is done, the next step is to have the family make a list of their expenses.This should include any household expenses such as rent, utilities, mortgage payments, credit cards, and other miscellaneous items.
*Set a family financial goal
As your family begins to plan the budget, one of the main things that you will need to discuss is your financial goals. When your family has something to work toward, they are more likely to stick to the budget. They are not just budgeting money for the sake of budgeting money. Make sure that each family member agrees on the amount of money that they will each contribute toward your financial goals.
*Distinguish wants from needs
It is so easy to get wants confused with needs. You may feel like you need to purchase that expensive cup of gourmet coffee, but in actuality, it is a want. To help your family better distinguish the difference, you can have them make a list of the things that they are spending money on or plan to spend money on. Have them identify which things are absolutely necessities like paying the light bill or purchasing a much needed winter coat. Once your family has identified the essentials, it is easier to identify the things that are luxuries. Once this is done, you are now ready to begin designing your family’s budget.
*Begin to design a budget
Your family’s budget does not have to be complicate. You can use a computer program or simply a pencil and some paper. Begin with the family income at the top. Then list the family bills and their amount. Subtract the bills from your family’s income. The amount that is left over is the amount that can be allotted to entertainment, savings, and your financial goals.
*Sticking to it
Now that the family budget has been made, it is time to put it into action. It may be difficult at first to stay within the budget, but it will become easier as you and your family learns to discipline themselves and change their spending habits. One way to keep your family and you focused on the budget is to keep a visual reminder of your financial goals where you can all see them. Place a picture of your dream vacation or that new car on your refrigerator. Keep a picture of what you are saving toward in your purse or wallet. While shopping, pull it out and look at it. This little visual reminder is a great way to keep you focused on your financial goals.
Creating a family budget is not difficult, but sticking to that budget takes determination and discipline. However, it can be done. Get the whole family involved, set financial goals, and work toward those goals as a family.