Having a family is seldom easy, especially when it comes to managing your household finances. However, your best method to ensure success is to get everyone involved in the process. At CalendarBudget, we offer effective home budgeting software that makes managing your family finances easy and efficient.
When it comes to planning your monthly household budget, why not get the whole family involved? That way, one person isn’t the only one responsible for managing the budget of the entire household.
Here we’ve collected some tips for budget planning to get your whole family engaged in your family’s financial well-being.
1. Create Mutual Achievable Goals
One of the most motivational parts of budgeting is creating a working budget that will help you achieve your goals. Maybe you want to plan for your next family vacation, or you’re looking for your new family home. Either way, having well-established goals that everyone in the family can work toward is key. Sit down with the whole family and decide what’s most important for each of you individually and as a family, then establish goals to work toward those ends.
2. Bring Everyone to the Table While Home Budget Planning
Often, one partner manages the entire household budget, which can be stressful and create financial and relationship problems. That’s why when creating a family budget, it’s always best to have everyone involved to be on the same page. This way, there are no misunderstandings. Adults and kids alike need to be aware of each family member’s goals and have common family goals too. As a family unit, work together to create a budget plan that everyone can agree on. Support each other in each of your goals using your budget to make realistic plans to achieve those goals. Having everyone involved is a great way to keep each other in check and manage your money wisely.
3. Keep Track of Both Income & Expenses
Don’t set your budget blindly based on your goals. You need to understand how much money is coming in and how much is going out. This means tracking your income and expenses using home budget software or a budget calculator. This opens your eyes to what you are doing with your money and what you can do to reduce spending, including setting financial timelines for the future. You may need to change some of your spending habits to get there, but it will be worth it.
4. Categorize Your Expenses While Home Budget Planning
When tracking your income and expenses, make your financial picture clearer by adding your transactions to specific categories. This will make it easier to determine your household’s “needs” and “wants”. For example, split your expenses into categories like entertainment, buying groceries, dining out, paying down debt, etc. After doing so, you’ll have a good idea of how much you’re spending in each category, which will make it easier to identify those nonessential items.
5. Identify Areas to Cut Back on Spending
Once you categorize your spending, it’s time to determine where you can cut back on some of your costs. There are many ways you can easily stretch your household budget, one of them being saving on groceries. You can plan menus with cheaper items, buy nonperishable items in bulk, and peruse the sales where you shop for groceries each week. Other areas where you might be able to shave off some of your expenses include subscription services, cable, and other entertainment services and reduce how often you go out to eat treats or meals each month.
6. Begin Reducing Your Debt
Debt can sometimes seem like a giant cloud hovering over your household dreams and goals, but there are some innovative and easy ways you can begin to reduce your debt. Before funneling all of your money into your savings account, pay off some of your debts first. Also, take a look when tax season comes around to find any additional tax deductions you can use. You can even consolidate your debt or contact your credit company to see if it’s possible to lower your interest rates; many are often willing to do so. Another wise option is to freeze your credit card use until you have paid off your debt.
7. Build Up Your Savings
After your necessary monthly expenses are taken care of, it’s time to build up your savings. You can start by keeping an emergency fund that will cover the essentials from three to six months in a worst-case scenario. Additionally, adding funds to your retirement account will help you build your savings so you and your family can live comfortably down the road. Employers often match a certain percentage of what you put into your retirement fund, so it’s always a good idea to take advantage of these types of found money.
8. Have Regular Family Check-In Sessions
Now that we’ve done all this work to get your budget working well, we want to make all that effort worthwhile. The key is to check in often to ensure everyone is still on the same page. It’s also alright to adjust your monthly budget to make up for unforeseen expenses or when your family’s priorities change. That is what makes it a working budget. One that you can easily adjust as your family’s needs change over time. Meeting every month is often a good rule of thumb, that way, everyone in the family can review your family budget and work together to resolve any issues. Maybe the first Sunday of the month can become your family budget brunch date.
9. Take Advantage of Tax Breaks and Track it in Your Home Budget Planning Tool
There are many different ways families can also lower their taxes to increase their savings. For example, those with high-deductible family insurance plans can deduct a lot of money when filing their taxes as long as it’s deposited into a health savings account. Medical expenses can also be deducted from your taxes. Often, retirement fund contributions are also tax-deductible, so don’t forget to claim what you’ve been investing when tax season rolls around. Speak with your financial advisor for specific tax breaks for your area.
Our home budget software can help your family create a working budget!
CalendarBudget knows that saving and budgeting isn’t easy, which is why our financial management tool is ideal for creating a working family budget. We want to help you and your family save, so start your FREE trial today!