When you have a family it is important that you stay on top of your finances, With having children the chances of you having an unexpected cost or expense is more likely than none. Having a family budget means that you are prepared for whatever life might throw at you. Learn how to start a family budget and stick to it.
What is a Family Budget
A family budget is one that consists of all the income and expenses your family has for the month. Keeping a family budget will help you and your family understand your finances better. Many families suffer financially because they do not know where their money is going. According to recent surveys by OppLoans, 75% of people do not have a budget. Some people can have financial stability without a budget. Others may mismanage their money and even accrue debt without one.
Having a budget also means that you are taking accountability for your spending. Some people do not want to have a budget because they are afraid to admit how much they spend and what they spend it on. The first thing you need to do is take accountability for your financial situation. Sometimes a decrease in financial stability happens through no fault of your own. But taking charge of your finances means that you are prepared for the unexpected.
How to Start a Family Budget
1.Choose How You Will Document Your Budget
The First thing that you need to do is figure out how you are going to document your budget. There are several ways to document it. You can use an app, Excel worksheet, or pen and paper. Some people even use their check book to document their expenses. Whatever method you choose, you should be comfortable with using it. It should also be handy and easy to manage.
2. What is Your End Goal
What do you want to accomplish by creating a budget? Do you want to know how you are spending your money? Do you want to save for a big purchase such as a house or a car? Figure out what you want your budget to do for you. Having a goal in mind will give you motivation to start a family budget and maintain it.
3.Calculate Your Income
Once you have determine how you will document your budget and what your financial goals are, it is time for you to add up all your income. Document all the sources of income you have. Doing this will allow you to see where your funds are coming from and how much you have to allocate towards bills and your savings.
4. Calculate Your Expenses
Now here’s is the difficult and maybe even intimidating part of making a budget and that is listing your expenses. It is important that you list all of your expenses starting with your mortgage or rent to your monthly subscriptions. Listing your expenses can show you where your money is going. This will be important when you want to cut some of your costs.
If you are in debt, you should focus on decreasing it. Paying off your debt means a higher credit score and more money in the bank. To decrease debt try not to use credit cards or buy now pay later options. Even if you qualify for a line of credit, you should always pay services and merchandise outright.
5.Look For Ways to Decrease Spending
Now that you know where your money is going now you can start cutting back on spending. One way that people throw away money each month is not canceling subscriptions that they no longer want or need. You can save hundreds of dollars each year by unsubscribing from unwanted subscriptions.
You can also try and cut back on groceries by using coupons. If you have to take your children to school, try joining a car pool. Finding where you can cut costs means more money in your savings and you closer to your financial goals.
6. Occasionally Review Your Budget to See How You Can Save More
Its important that you keep your budget up to date and accurate. If you have an increase or reduction in expenses or income, make sure that you make that adjustment in your budget. It can be stressful trying to keep up with every dollar that you spend. Some people can remember where their money went and how to manage it without a budget. However this is not the case for everyone. A budget is a great way to make sure that you are paying your bills and taking accountability for your spending.
7.Communicate With Your Partner and Family
When you are managing your budget, make sure that you are in communication with your partner. Communicating about your finances will allow both of you to work towards your common goal. It can be difficult managing money with a significant other. Nevertheless if you both want to gain more financial freedom its important that you work together to do so.
What To Do If You Can’t Stick To Your Budget
If you want to take control of your finances, learn how to start a family budget and stick to it. If you start a budget and don’t stick to it, try to get back on track as soon as possible. When you are learning how to manage your finances properly there are going to be some ups and down. However it is important that you dust your self off and reach for financial greatness.