A Successful Family Budget Starts with A Plan
Do you have a family budget? Setting up a family budget always seems like a daunting challenge for me. It’s not as difficult as you might think for everyone to have a family budget. But creating a successful budget requires a few key strategies to make it work. Here are some tips to help you create a successful family budget that will get everyone in your home involved in the process of making it a success.
Get Everyone on Involved
The first step after you have your budget written down is to get everyone in your family involved. The more inclusive your budget is, the more likely it is to work well for your family. Be sure to include every family member who is old enough to understand and make a contribution.
Following a budget affects the entire family, so it’s a good idea to get input from other members of the family before you finalize your plan.
Don’t Forget to Include a Few Luxuries
Some budgets are so tight that it may seem there’s no room for any luxury. If you make your budget with no luxuries, you will feel deprived and it will make it much harder to maintain your budget. Try to be a bit creative about what constitutes a luxury, you may be surprised to find you can afford a few small privileges or luxuries each month in your budget.
For example, it could be something like buying your favorite brand name item at the store instead of settling for the store brand. Or maybe buying more expensive meats for a special meal or two instead of basic ground beef. Maybe ordering a special dinner for family night like pizza or Chinese food is a luxury for your family that you can include in your budget.
If you have a little extra money you are budgeting, you might consider a luxury item a family vacation or new family computer. You want to include a special item or two in your budget to keep family members motivated and make the budget easier to deal with.
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Estimate Income and Expenses
As you start to develop your budget, it’s a good idea to take your last three months’ worth of income and create an average (especially if you have job or income that fluctuates month-to-month). When in doubt, round your estimated income down so that surprises will be more likely to be on the plus side.
Once you have your income estimated, review your expenses. Try to include at least 3 months of all your expense to get a true picture. Don’t forget to include variables like birthdays and holidays.
Don’t Rush
Give yourself and your family time to work with the new budget. For the first few months, you may need to make adjustments and get used to planning for “unexpected expenses”. There will be little challenges that need to be worked out. Understanding these challenges can help you stick with your budget and make necessary tweaks and adjusting.
If you stick to your budget, within a few months it should be a habit.
Use Helpful Systems
There are many apps and software programs available to help you track your income and expenses. You may find that using software to lay out your family budget can be very helpful. Software designed for budgeting may make creating your budget easier.
If you are not a computer savvy person, just stick to pen and paper worksheets for your budget. Use a system that will work best for you to track your expenses and maintain your budget.
There is no right or wrong way to manage your budget, except failing to manage it and having no plan.
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Save Money Combining Tasks
Now that you have your plan in place, you can start looking for ways to save money. One easy way to save money is combine tasks, consider the extra costs gas and miles on your car. Combining errands is a great place to start.
What other ways can you save by combining tasks that you might not have considered? For example, could you visit out-of-town family members during your vacation?
Understand the Difference Between Needs and Wants
Even the best-planned budgets sometimes get tripped up when you confuse needs and wants. The distinction between “needs” and “wants” can be very difficult for some.
What one person thinks of as a “necessity” might be considered a luxury by someone else. If you have questions determining what is a true need or a want, ask yourself, could I survive without {item in question}? We know we have to meet our families true needs for food, shelter and security first. Items outside these 3 areas fall into the “want” category.
If you’re still in doubt about if something is a true need or a want, discuss your questions with a friend or third party asking them to help you determine this is a true need. Most likely, if you have this much doubt, it’s not a true need, but could be added to your wish list of luxury expenses.
Focus on Paying Off Debts
Paying off debt is one of the hardest parts of managing a budget. Once minimum payments have been made, it’s easy to divert funds for other expenses or wants. Paying off debts requires discipline and it needs to be high on the priority list for your family budget. The sooner debts are paid off, the sooner you’ll have more money left over for other items in your budget.
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Commit to Permanently Maintaining Your Budget
At this point, you have come a long way with your budget. Hopefully, you have started and been in maintenance mode for several months. Now, it’s time to permanently commit to a family budget that maintains the principles you have as a family and that will allow you freedom from debt and stress in the future.
Are you ready to get started with your family budget? These tips will help you get started on the right path to having a successful family budget. But in the end, you are the most important key. If you don’t maintain the budget and set an example for the family, it’s going to be very challenging to keep your family committed to the budget.
Your turn…
Do you have any tips that help you maintain a successful budget? What’s your best tip for setting up a budget?
Kyleigh says
Very, very good things to remember. Budgets do get easier, but they can be a doozy at the beginning!
Rachel says
Hi Kyleigh, getting a budget started and sticking with it for about the first 90 days is a challenge for most of us!