Family budgeting is something that most families know they should do, so what seems to be the problem?
I’ve put together a list of 3 tips that will help your household do its family budgeting in a way that is both effective and painless.
1. It’s a Family Affair
If you are live in a household that does have some form of family budget, congratulations! Unfortunately, most family budgeting is done by one person. It’s no wonder, then, that the family budget is seldom adhered to. Everyone under the roof needs to be involved in the family budgeting process. Even young children need to grasp the basic concept of what a budget is and how it affects their family’s spending habits. Teenagers need to have a deeper understanding of what family budgeting is and how it affects things that are important to them, like whether they will have their own car, how they will finance their college education, etc. Most importantly, if there are two adults under one roof, family budgeting needs to be understood and agreed upon by both parties. It can’t be the wife telling the husband what to do or vice versa. Both adults have to know what’s going on financially and agree to a plan. It’s not “his plan” or “her plan.” It’s “our plan.”
We have a simply guide and tools to help you develop a family budget.
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2. Budget Often
It’s not enough to set an annual budget on January 1st, nor is it enough to set one monthly budget and try to apply it to all twelve months. Each month is different and deserves its own budget. For example, you may have a large tax bill or tax refund coming your way in April. There might be a family vacation planned for June. You may not spend a lot in March, but what about months like August (back to school) or December (Christmas?) Each month comes with its own set of financial needs and wants. Create a monthly budget with your spouse before each month begins.
3. Allow for Slack
Family budgeting is a lot like dieting. If you make things too strict and don’t build in the occasional splurge, you are bound to fail. Everyone in the household who spends money—that is, everyone except for very young children—should have a small amount of pocket money set aside each week that they can spend on whatever they want. Obviously, you’ll need to put some conditions on what your children buy, but for adults, anything is fair game. If your wife wants a manicure and it’s in the budget, she gets to have one, even if you think it’s a waste of money. If your husband wants to buy lottery tickets and you think that’s stupid, he still gets to buy them, as long as it’s in the budget.
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