Family budget unifies priorities and goals of all family members into an agreed family plan. A good family program can strengthen familial ties because every family member knows his or her role in keeping the plan on track. Unfortunately, similar to larger organizations, there are families that are well-managed and the other ones that are not so.
In fact, planning and budgeting is one of the aspects of family life that people rarely enjoy dealing with. Many families see it as tasks filled with disagreement and are difficult to manage. For example, one family member might see entertainment as an essential part of the budget, while another views it as a luxury that isn’t needed.
What actually happen is each family member might value a certain activity differently. So a family plan and budget can help you find a common ground that will guarantee financial success if all family members are sticking to it.
What is a Family Budget?
A family budget is a summary of lists of intended expenses and expected incomes with an objective to strike a balance between income and expenses. Since the priorities and goals of each family is different, setting up a family budget can be different from one family to another.
While one family might feel content to save a certain percentage of their income to buy a car another would be satisfied with the idea of keeping their older vehicle and dedicating those funds to an annual family vacation.
There are several ways of setting up a household budget. Some families develop their budget with the help of experienced financial planners. On the other hand, you and your family may experience that you can set your budget while sitting at your kitchen table. But both ways have the same intention, planning for present expenses and preparing for the unexpected.
Set Up a Family Budget
When you set out to set a family budget it’s essential that you consider all the financial needs and goals of each person and the family as a collective whole. Do include the major expense or investment items such as:
- Children’s college funds.
- Retirement savings.
- Saving for the unforeseeable, such as car repairs or loss of employment.
- Saving for a new home or home improvements.
Every expense needs to be calculated as you work through the family budgeting process. Naturally the adults will have the last say as they are generally the ones contributing the income to the running and maintenance of the household. Children’s needs have to be addressed as well, including the possibility of having to purchase items such as braces.
If you don’t have a medical insurance plan to help supplement the cost of the braces or prescription eyeglasses, they can take a good bite out of your budget.
Financial Planners Vs. Do It Yourself Family Budget
There are personal financial advisors who are experienced in working with people to set a family budget, which do charge for their services. If cannot set up your own budget you may view their services as an investment. But you can save money from a service expense if you feel you can handle the process on your own.
Another alternative might be to research any workshops in your area that are designed to help when it comes time to set a family budget. Or, if you’re in debt you may also visit a non-profit credit counselor in your area. This can be either low-cost or no-cost, with valuable information.
Setting a family budget can save you a substantial amount of money over time. No one likes to fall short in the financial department and not be able to provide for their family. With a reasonable budget in place and dedication, you can handle money worries, such as debts, and other related issues.