The Importance of Budgeting With Your Family

19
April

Budgeting is something the whole family should be a part of. This provides everyone with sense of ownership when it comes to finances. Thus, folks will be less likely to ask for extravagant things, will be more likely to pitch in when it comes to work and bills, and everyone from parents to children will learn financial responsibility. However, budgeting is more than paying bills on time. The following are some tops on how to go about budgeting with your family.

Know Your Income

The first thing you should do is sit down and figure out how much money you have coming in each month. Take a look at your paychecks and see if this is a fixed amount or if it is something that changes on a week to week basis. If the paycheck is not the same every single week, then it is important to average out about how much you have to work with in a month. Take the last six months of paychecks and do this math. You can not make a budget until you are realistic about how much money you have to work with. If some income isn’t guaranteed – birthday money or stock dividends – try not to include this when performing calculations. There’s no sense banking on certain funds coming in if they aren’t a sure deal.

Determine Fixed Expenses

Next, consider how many fixed expenses you have to deal with. These bills are ones that will always be due every single month and are around the same amount. For example, rent, utilities, and cell phone bills usually come in like clockwork. It is important to cover your basic needs like shelter: knowing which bills will come in every single month means that you can make a plan.

Consider Flexible Expenses

Other bills may only come up once in a while or may be flexible or change. For example, you may always have to buy groceries, but this amount can change. Additionally, there may be expenses like an oil change or credit card balance that can change with each month. Keep such expenses in mind when you are formulating a plan for managing your family’s money.

Additional Expenses

All work and no play makes for an unhappy or boring family. This is why it is so important to consider things like eating out or going to the movies. Think about what you can afford when choosing how much money to set aside for such expenses. This would also be a time to consider how often you would engage in such activities and how this would affect your overall budget.

Remember to Save

It is not smart to live paycheck to paycheck. This is why it is important to save money each and every month. Put aside a certain amount of each paycheck into a savings account that you do not touch. This is something that should be set aside in the event of an emergency like car repairs.

Save for Something Fun

Budgeting can be a lot of fun. This is a chance to not only ensure you can cover all of your bills but that you can also save for fun things for the whole family. Why not has a set goal so that saving money means that you get to do something like go on a fun weekend excursion to an amusement park or go on vacation during the summer months? Having goals means that you and your family will be more likely to stick to this budget. Keep a chart up in the kitchen or some other communal space so that the family knows just how close to the goal you are.

Be open with your loved ones about the budgeting process so that they all pitch in and help. This is a chance to secure the future of your family so that you never have to worry about slipping into debt or have to stress out about the mortgage payment. Make budgeting a family activity so that you have support during this process and so you and your loved ones get in the habit of being financially responsible.

This post was written by

jason – who has written posts on Budget Clowns.
Father of three and married to a lovely women. Always looking for ways to save money, and invest it properly for my children's future.

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