Creating a Family Budget

We all have some kind of individual budgets for our income and expenses. Yet many overlook having a budget for their family. You can be financially safe without one, yet a budget will ensure that you keep your finances in check.

Organizing into Categories

Creating a family budget needs to include all financial aspects. To get a better picture of your expenses, you will need to organize everything into categories. Start with your expenses, which will include:
-Mortgage payments
-Utilities
-Groceries
-Other household expenses

Take the time to sit down with your spouse and input their expenses into yours. After doing this, you can move forward with other family members. If you have children, then you should list what their daily and weekly needs will be. This can include:
-Clothes
-Personal maintenance items
-School supplies/food
-Other necessities

Having your expenses all together will give you a good idea of your total amount and how much you want to decrease it. Having every family member’s amount separate will help you determine where financial changes need to be made.

Establishing a Combined Income

To understand how to handle these expenses, now that they are organized, you will need to determine your combined income. This will include your income, along with your spouse’s income. If you have jobs where your income varies, you will need to round to a close estimate. When calculating your combined income, ensure that you take all tax out of that amount. If you miss doing this, this could throw off your amount. Then, when you establish your total income, you can go from an estimate to an approximate baseline.

Making Changes

After understanding everyone’s household expenses, it is time to make changes. Making changes, especially larger ones, may be difficult for your children. Ensure that you plan a time to sit down with your entire family and discuss areas where spending is too high and where you want to make adjustments. When you include your family in the change, they will be more open to listening and making changes. When you work together and put in the effort, making financial adjustments to your budget will be attainable.

Tracking Your Budget

Once you have everyone’s expenses and budget amount, you will need to write these down and track them. Although it is essential to analyze how you want to make changes, you need to make a plan, or you will not implement or put them into action. One way you can track your budget is by creating a budget chart. This can be placed somewhere in your house, such as your kitchen, where everyone will see it daily. Then, depending on what you are trying to work on, you can make a color-coordinated chart where everyone has to check off specific items.

Always Communicate

Communication is one of the most significant factors, which will affect whether a budget will succeed. Having good communication is vital to keeping your family’s budget going. Although having a chart certainly will optimize your budget, talking will be just as or more important. Communicating will ensure that everyone’s concerns can be heard and the budget as a whole can be looked at. It may be wise to look over your budget at least once a month with your family. Doing this will ensure that everyone’s budget is going well and will help keep the funding going without failing.

There are various methods to create a family budget. Incorporating practices that work for you will help you keep your finances in check. Starting a family-based budget will not only help you financially but also teach your children valuable lessons about handling money.

Sources

-McMullen, Laura (2021). How to Create a Family Budget. Nerd Wallet. Retrieved from 

https://www.nerdwallet.com/article/finance/how-to-create-a-family-budget

-Valley (2022). 7 Easy Steps for Creating a Family Budget. Retrieved from 

https://www.valley.com/creating-a-family-budget