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Budgeting

Family Budgets – A Healthy Outlook

Having a family budget means, for some people, whipping out the calculator at every purchase, or viewing the budget on their mobile device in the grocery store. For others, a family budget is just a formality and they never really glance at it. Between these extremes are those who sort of use their family budget with moments of obsessive adherence, or those who try but give up altogether because they go crazy trying to keep track of all the details.

Where’s the balance? How can you maintain a healthy outlook without obsessing or ignoring your family budget?

Here are some tips on how you can cultivate a healthy outlook regarding your family budget.

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Photo by NeONBRAND on Unsplash

Flexibility

For those who tend to err on the obsessive side, it is a good idea to remember to be flexible with your budget. Of course, flexibility does not mean ignoring your parameters. But it does mean you can take a little from one area and cut back in another when necessary.

Get Your Family On Board

Nothing can make you frustrated with a budget like lack of family participation. Family members might just rack up expenses without giving the budget a second thought, leaving you to tear your hair out trying to balance it and cover the expenses. If the whole family is included and on board with the budget, it can improve everyone’s outlook.

You Don’t Have to Keep Track of Every Penny

Some people avoid a budget because they don’t want the stress of keeping track of every cent spent. They’re right – that is stressful. But it’s not the only way. Look into budgeting in a general way, or simply work out a list of expenses, income, and how much you have in the bank right now.

Customize

Don’t be afraid to get creative with your budget, and customize it for your family’s needs. Your outlook is likely to be a lot healthier if your budget is suited for your income, expenses, and personality. Your family dynamic should be taken into consideration when you form your budget.

Forgive Yourself and Family Members

Everyone makes mistakes and breaks the budget now and then. Beating yourself up over a budget mess-up is not conducive to a healthy outlook, and neither is nagging and punishing family members. If it’s a chronic “mistake,” it may need to be addressed in a civil family meeting. But to keep a healthy outlook, let the minor offenses go.

Know When It’s a Real Emergency

What constitutes an “emergency” can differ between family members. Dipping into the emergency fund for non-emergency expenses can deplete the money pretty fast. Make sure everyone knows what a real financial emergency looks like for your family.

Budgeting

5 Clever Tips to Get the Family On Board with Budgeting

You’ve probably heard that getting everyone involved is important to the success of your family budget. But you may be wondering if that’s really necessary, or how to even do it. Here are some ideas and tips for getting everyone on board with your family budget.

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Photo by Harshil Gudka on Unsplash

 

Be Open

Sometimes parents try to hide their financial situation from their kids and/or each other. While this may seem like “sparing” the ones you love, in actuality it can cause undue stress on the one family member who does know how bad things are, or how things work financially.

It’s true that you don’t want to overburden your kids with responsibilities that aren’t theirs, but including them in a frank discussion of your financial situation can go a long way toward easing your burden and garnering their willing participation.

The Family Meeting

Call a family meeting to discuss finances. If you’ve never done a family meeting before, this is a good place to start. It may not be everyone’s favorite topic, but it’s an important one. Ultimately, your kids and spouse will be glad you included them in the discussion. Another tip on the meeting – try to call it at a time when it doesn’t cut into other plans. This should help reduce resentment.

It Affects Everyone

Explain how your family finances affect everyone in the household. Be clear and specific, citing fees, tuition, allowances, groceries, etc. and how they all cost money. There’s no need to beat everyone over the head with this information, so to speak; but it gets family members to think a bit about where the money comes from. It’s easy to take things for granted.

Cutting Back

If the budget involves cutting back, it’s probably a good idea to cut back in areas that affect the whole family rather than just one member. Otherwise, that one person may resent what seems to be preferential treatment of the others, and you’ve lost your whole-family approach to the budget.

Set Goals Together

As you work to formulate your budget, work on common goals. What would your youngest child like to see as part of the budget? She might say toys. Your oldest child might point to electronic devices as something to include; your spouse may say a nice vacation. Consider everyone’s wishes and come up with some realistic, common goals. Not everything is doable, of course; but finding creative ways to get everyone’s needs met is what family life is all about.

Budgeting

Is an Emergency Fund Necessary?

Some may question the necessity of an emergency fund. After all, is it really necessary? How do you go about it? Does it need to be a huge amount? Here are some ideas and suggestions that should help answer these questions.

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Photo by Piotr Chrobot on Unsplash

Is an Emergency Fund Necessary?

Generally speaking, yes, an emergency fund is necessary. What form it takes can vary, but it is a good idea to have an emergency fund. Such a fund can help you avoid high-interest debt, and it helps reduce stress. After all, life is full of changes – many of them sudden and not good – and having that “cushion” can help you feel ready and calm.

How Do You Go about Creating an Emergency Fund?

First, determine your expenses. Look at three to six months’ worth of living costs and count on saving that much in a fund. This can help you keep your standard of living for a time if you lose your job, or it can cover a large expense such as vehicle repair.

Then determine how long it will take you to save that much and how much you have to take out of your paycheck each month to reach that goal.

Once you’ve determined how much you need to save and how long it will take to save it, it’s a good idea to change your mentality to put payments into the emergency fund before you pay for anything else. If you can do it by automatic deduction, go for it – see if you can have a portion of your paycheck taken out and put into a savings account. Otherwise, make it a habit to put money in your savings first and foremost, and then take care of your other expenses after.

What If You Have Low Income?

Even if you have low income, you can set aside something each month. Try saving a percentage of your income, such as 5 or 10 percent. It may take you longer, but it will accumulate.

Does It Have to Be Huge?

In short, no. An emergency fund does not have to be massive – but it certainly should cover unexpected expenses. To determine the size of your fund, consider what sorts of emergencies you’d want covered by the fund. Remember that buying insurance may be a more cost-effective way to guard against emergencies, too – evaluate the scope, likelihood, and potential cost of possible emergencies and this should give you a clearer picture of how large your fund needs to be.

Budgeting

Creative Budgeting – Customize Your Budget to Fit Your Family

Your family budget does not necessarily have to fit a template – even if you do use a template, you can customize it. A budget that really fits your style and family dynamic tends to be a lot easier to stick with, and can even be fun! Here are some tips for making a creative, customized family budget.

It’s Your Budget

Get your whole family to participate in creating the budget to make it really yours. Create common goals and brainstorm for fun and creative budgeting ideas.

Cookouts

The great American cookout is a great way to have an “outing” while saving money. If you grill seasonal garden vegetables, it’s an even bigger money saver. Get creative – you can grill inexpensive, “ordinary” foods and make them seem like a treat. For example, mix up some flat bread dough and cook it on the grill. You can even do pizza on the grill!

Go “Shopping” for What You Don’t Need

This can be fun as a family. When you’re out running errands or at the mall, make a point of pointing out all the useless things you see that you don’t need. Some people can have a lot of fun with this – they find the craziest looking clothes, for instance, and laugh about how much they don’t need them and how much they’re saving. It’s fun, but it also teaches your family some important lessons about needs versus wants.

Creative Savings – a New Take on the “Swear Jar”

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Photo by PARAG BHAGAT on Unsplash

Have you heard of a “swear jar”? Some families who are trying to improve their language will institute a swear jar. Any family member who swears has to put a quarter into the jar. Get creative with your family – is there something your family would like to improve on that could use a “swear jar”? Here are some ideas:

  • Every time your child talks back he or she has to put a quarter in the jar.
  • Playing video games, watching television, and other entertainment media “costs” 50 cents for every half an hour.
  • Family members must pay a quarter each time they don’t put away their shoes, toys, or whatever item always seems to be left on the floor each day.
  • Complaining about dinner will cost family members 50 cents each.

Another method is simply never to spend change. When you pay cash for something, always use paper money – if the total is $5.26, give the clerk $6. Then put this change into the jar. You’ll be amazed at how this can accumulate over the year, especially if you use cash often.

DIY Videos

Make use of all those online tutorials to fix minor problems around the house. Try typing your problem into your search engine and look for tutorials. It’s amazing how much information is on the internet, even for solving obscure problems.

 

Budgeting, retirement

Very Basic Budgeting for Beginners

Stay tuned for a series of articles on BUDGETING over the next few days.

Have you been talking about a family budget, but aren’t sure where to start? Sometimes it’s good to start with the basics, such as the basic outline for a budget and the categories you want to include. Here are some tips to help you formulate a simple family budget.  This can be used for an individual budget, too.

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Photo by Aidan Bartos on Unsplash

Income

The first place to start in the outline of your budget is with your income. There will be some estimating here, no doubt; but make sure it’s estimation, not dreaming, say experts. The income area of your budget is not the place to write down ideals. Simply take a look at your net income over the last three months and estimate an average monthly income. Or you might have income that changes very little month-to-month; it should therefore be pretty easy to figure out your monthly income.

Expenses

Your next category should be expenses. It’s good to include enough detail that you have a grasp on things, but splitting your expenses into dozens of little categories will probably only frustrate you. Try to make your categories fairy general – “entertainment,” for example, is a more general category than “computer games, movies, cable, and DVDs” listed as separate categories. There will probably be more estimation here than in the income category.

As you break down your expenses into understandable categories and numbers, remember that charitable giving or any giving away of money should be also listed as an expenditure.

Actual Expenses

Estimation gives way to “real” numbers when you write down your actual expenses during the month. This is the last section of your budget plan. Keep a running tally of your expenses for several months, and then look at where you are.

Some Basic Principles

In budgeting, there are some principles that are considered basic. Here are some of them.

* Distinguish between wants and needs. This can be a hard one, but it’s vital for a budget to function properly. Beware of convincing yourself that a want is a need when it isn’t – you may just be trying to find an excuse to buy the item. Real needs are things like clothes, food, and shelter; but designer clothes, gourmet food, and a palatial dwelling are more like wants!

* Expenses should not exceed income. You may find yourself surprised the first time you do a budget and discover that you actually don’t make enough money to cover your expenses. If you discover this, you need to look carefully at your income section and see where you can increase it, and look just as carefully at the expenses and see where you can make cuts.