Creating and Maintaining a Family Budget

Tight budget saving thumbnailNot every budget has the same needs, so creating and tailoring a budget to your family is one of the key elements to creating a successful budget. If you have multiple people in your family, a budget tailored to a single person and their income will not be helpful to you. This is why it is practical for you to create your own unique budget for you and your family, and get some resources on how to make maintenance easier.

Make it Your Own

When it comes to creating your budget, start with what makes it unique. How much income do you and your partner make? How many children will need to be included in the budget? These are all factors that should be respectively considered in the creation of the budget and planning.

The first step to creating your budget is to determine the total income your family will have throughout the month. This can be done by taking your paystubs and totaling them, and marking which days of the month you can expect payment for further clarity.

Determine Your Expenses

After your income is calculated, your expenses should be as well. There are two different expenses that should be considered for your budget:

  • Fixed Expenses
  • Variable Expenses

Your fixed expenses are ones that do not change throughout the month. These are usually expenses like your mortgage payments, utilities, and your loan payments like title loan repayments.

Your variable expenses are those that have varying limits throughout the month. These can be items like your gas, takeout, subscription services, and entertainment. Usually when creating a budget, these are the items that can be adjusted the most.

List Your Necessities

One of the biggest factors to consider when making your budget are figuring out where your expenses are, and how much they will total at the end of the month. Your fixed expenses should be the priority throughout the month, as they are generally your fixed bills that will have a consistent sum.

In your budget, prioritize these payments and calculate how much you will need to dedicate to each bill per week with your income.

Spend Within your Means

While you are creating your budget, what you might notice is the entire sum of your bills/ expenses compared to your income level. When creating your budget, you may find that you are already spending outside of your means.

This can mean a mortgage that is too expensive or a car payment that you cannot afford. Downsizing can be a successful way to manage this and help spare you unnecessary debt.

In addition to cutting out payments, be sure you are not overspending in any other categories.

Keep Your Budgeting Tool with You

Where most families go wrong is with their method of budgeting. It’s all well and good to create your budget but sticking to it is where most families can fall short.

Whether you prefer a physical ledger versus an electronic one, your budget should be kept with you in order to ensure accuracy. If you are budgeting with a partner, an electronic budget can be more useful, as they can be adjusted in real time.

During the day, every purchase you make should be recorded, and then categorized later on to reflect where your spending is happening. This can ensure you are not overspending, and left wondering where your money has been going!

The Envelope Rule

In addition to carrying your budget with you, it is wise to delegate an envelope of cash for certain variable expenses throughout the month. If you are overspending on groceries, it can be helpful to create a spending limit in cash.

Then place this amount within an envelope and take it with you when you are making designated grocery trips throughout the month.

Discretionary spending can add up pretty fast if it’s not monitored, so be sure to not exceed the set limit by using credit cards and money from other categories to make up for your overspending.

Cut out Unnecessary Spending

Your spending can often be out of control when it comes to budgeting with your family. One of the ways to combat this can be cutting out the overspending, or the unnecessary spending. One of the ways to do this can be with your bills.

Are you spending too much on cable? If you already have subscriptions to Netflix and Hulu, it might be time to cut the cord and save extra.

Stick to It

The hardest part about a budget, most will tell you, is keeping it. Creating a budget can seem rewarding, but the real rewards come from you staying on track, and not spending beyond your limit.

Change Your Habits

Sticking to your budget can mean just a matter of changing your habits together as a family. Where you can find the most overspending as a family is generally with food and entertainment.

What can be helpful for all in a family is teaching healthy spending habits. This can be done simply through small habits like everyone taking their lunch to school/work to help save money with a food budget.

By buying more useful items like food for lunches, it can help cut down the cost of takeout. Eating out can amount to over $200 a month, especially as a family!

Adapting to a budget is one of the most important aspects of maintenance!

Adjust as Needed

One of the keys of maintaining a successful budget is to adjust the budget as needed. Once a month has passed, then it is time to go over your positives and negatives of your spending. If you are dedicating too much to one area, it is time to adjust your spending, and discuss it with your family.

Dedicate certain amounts towards your priorities, but don’t completely skimp on fun. What you can look for is agreeing to one or two nights a month that you dedicate towards entertainment or takeout. This can be another motivation for your entire family to follow the budget, as it can be a reward!