When it comes to putting together a family budget, many people dread the task. But in order to improve your financial situation, a budget needs to be in place. Family budgets will give you a great idea of how much debt you owe, how much you are saving, and what you can afford to spend. A budget will give you a solid foundation to build on and a brighter financial future. Below you will find some tips that will help you get started.
Going Low Tech
While it might be tempting to purchase expensive budgeting software or use Excel spreadsheets, there is nothing wrong with keeping it simple. With a pencil and a notebook, you can easily create a family budget. This simple but effective method of making a budget will only cost you a few dollars compared to the hundreds you might spend on software. As you can see, the old fashion method of budget keeping still works the same as it always has.
Get the Kids Involved in Family Budget Meetings
When planning a budget for the family, why not get the kids involved? Kids should always be part of the budget, and it will help them learn the value of money at an early age. While it might seem like a boring task to some children, teaching them how to make a budget will help them later in life. Also, children will get to see how much money is actually being made and this will help them to better understand why they can’t have everything they want.
Build in Some Buffers
During the budget planning process, make sure to give yourself some wiggle room on certain monthly bills. Electric, water, and waste bills will often go up and down over the course of the year. So, make sure that you plan for this rise and fall. To accomplish this goal, start by finding out the highest amount you have ever paid for each bill. Then set your budget for just a few dollars over this amount. This will give you a buffer in case your monthly bill goes up. If your bill is less than this amount, take the extra money left over and place it in a rainy-day fund.
Don’t Forget to Focus on Debt
When building your family budget, don’t forget about your long-term debt. While you may have included monthly payments into the budget, you should really think about paying your debt down. This means that you will have to pay more than the minimum payments each month. To achieve this goal, start by paying a little extra on the smallest debt you owe. Once you have that debt paid off, move on to the next highest amount you owe. This will free up more money each time and reduce the amount of interest you are paying. And, once you have paid off your loans and credit cards, you will have more money available to you to use on the more fun things in life.
These simple budgeting tips will help you get started with making your family budget. Remember that budget planning doesn’t have to be hard, and you can get started with a simple notebook and pencil. There are also plenty of apps that you can take advantage of. Getting your kids involved in the process will help them learn about money and grow up to be financially responsible. Having a family budget will also help you keep spending under control, and make purchases that much more worthwhile. There really is no reason not to get started today.