How to Start a Family Friendly Household Budget
- 1). Make time every week to discuss the finances in the household. If your children are old enough (say, teenagers) then include them in the conversation. Everyone can contribute ideas to the family budget meeting.
- 2). Start keeping track of all your bills in an organized fashion. Create a system that truly works for your family. Pay bills online as a means of saving money and remaining organized. Everyone who is involved in the budget meeting should also understand the budget household system.
- 3). Track all of your purchases and expenses for at least a month. Organize them into categories. First, break them down into fixed expenses, those that stay the same each month, and variable expenses, the bills that change from month to month. Examples of fixed expenses include your mortgage or rent payment, car loans, student loans, retirement savings, insurance premiums. Variable expenses include credit card bills, utilities, gasoline, food, entertainment and clothing.
- 4). Keep track of your income so you know exactly how much money you have coming in every month. Compare this amount to the total amount of your expenses. If your expenses are more than your income, figure out where to cut. If your income is more than your expenses, plan how to save that money for a rainy day, retirement, college education or a major purchase or vacation.
- 5). One problem that many families have is that the budget changes during the month. When there is an unexpected bill, you need to come together as a family and discuss how it is going to be paid. Everyone should have a say in how the finances are handled.
- 6). Talking about the way the money is spent is essential to successful family planning. Review your income and expenses regularly and it will lead to a better budget process.
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