How to Start Planning a Family Budget

Credit Card Debt Impacts A Family Budget

Planning a family budget is much more difficult than planning a budget for just you alone. This is because your family may have more than one source of income as well as many more unexpected expenses. 

When you are planning a budget as an individual, you may decide to eat only one meal a day in order to afford a vacation or a nicer home; but with a family, financial decisions like those are not an option. You can’t ask a family member to go without food or clothing so that the family can be better off financially.

So many families suffer through going without the necessities or working themselves to death, simply because they don’t understand the basic principles of a family budget and how to implement one. This isn’t for lack of trying. Members of the household will sit around the kitchen table with a pen and a notebook, and start planning a family budget by writing down income and expenses in order to figure out their finances.

However, since there isn’t ever usually enough income to cover all of the expenses, these meetings usually boil down to ‘who has to give up what’ so that the family can pay all of the bills. Of course, this results in arguments and hurt feelings, but no family budget. This is not the way to plan a family budget, but rather a way to shut down communication altogether.

So how do you plan a family budget without arguing about it or depriving anyone of the necessities?

There is a Solution to Planning a Family Budget

And here are a few steps to follow to get back on track with your finances without the family strife:

1.  Track your finances for two to three months.

Save every receipt and every bill for several months and you will be amazed at how much money you are wasting. You will probably find late fees, high interest rates, out-of-control electric bills, grocery receipts full of junk food, etc. Once you see how much money you are wasting, you will find that little things like clipping coupons, combining errands to save gas, shutting off appliances when not in use, and not just taking cash out of the ATM for ‘spending money’ will save you several hundred dollars each month.

2. List your expenses that you simply cannot neglect like the mortgage/rent, utilities, credit card payments, car payments, insurance, etc. and subtract them from your total family income.

Whatever you have left is what you have to work with for food, clothing, gas, etc. If you simply don’t have enough, you may have to find a cheaper place to live or sell one of your vehicles. If credit card debt is the problem, a temporary or seasonal secondary job may help.

3. Use computer software for budgeting to help you out. 

Making lists on paper is a good place to start, but once you see you finances on a computer generated spread sheet, you will get a much better idea of how to plan your finances.  

See also: writeyourselfrich.net