Guideline to Creating (and Following) a Family Budget

Did you know the number one cause of divorce in America is financial stress? That is why it is so important to have your family on the same page when it comes to finances. Add a few kids to the mix and things become even more complex. To help manage your family’s finances (and to help keep everybody happy), it makes a lot of sense to sit down with your partner and create a family budget. To help you with this important task, we have come up with some guidelines.

• First, make a list of all of your family’s expenses for a month. For example, your mortgage or rent, car payments, groceries, child care, utilities, gasoline, medical expenses and co-payments, hair cuts, clothing expense, entertainment, etc.

• Determine how much income your family has to put towards one month of expenses.

• Now, calculate how much of that income should be spent on each item on the list. Some expenses are fixed like housing and car payments. Enter these expenses first. You will then be left with your variable expenses and can determine how best to distribute your remaining funds across these items. By following this exercise, you may determine that you need to cut back on items like new clothing and entertainment in order to stay within your budget. If you determine you do need to cut back on some expenses, be sure to work with your partner to come up with a solution that is fair to everyone. This part of the budget process can be difficult and stressful but remember it will all be worth it in the end.

• Now that you have your basic budget in place, determine who is going to manage the budget to ensure the family is staying within it.

• Once it is decided who is responsible for maintaining the budget, have that person decide what tools they are most comfortable with to help with this process. There are different options from good old fashion pen and paper to purchasing a budgeting program to help you keep track of your budget and the actual amounts spent on each item.

• If your family is over budget in any category, be sure to communicate this with them. Try to figure out, as a team, what you can do to stay within the budget.

• Work out the kinks. If a family budget is something new for you, it will certainly take some getting used to. The first few months may be a challenge and you may find you need to tweak the budget in some areas to find something that works for the entire family.

Referenced from planningfamily.com