Creating a family budget is a great way to predict your spending and understand your income. Newlyweds usually engage in planning their budget just after getting married. While creating a family budget requires patience, skills, and knowledge, you can master it without some special university degree. Whether you want to save for the future, purchase a new apartment, or make needs meet, a certain financial plan will let you reach all your goals with ease. Today, we’d like to share a few simple but very effective tips that will let your family budget with ease.
What is a Family Budget?
Let’s say you are getting married with a Russian bride. You know how much money these ladies may spend on clothes and other stuff for the house. Your married life will be easier if you have a definite family budget. So, what is it?
A family budget is a financial plan that includes your income, spending, and some financial goals. Knowing all these numbers will let you understand whether you can afford this or that thing, or if you need to save for it more. Even if you think that you know the amount you earn and spend well, creating a family budget will give you insights that you even haven’t thought about. So, if you are ready to do it, look through the tips below.
How to Build a Family Budget?
Don’t worry if you have never created a family budget before. Most people haven’t. But it is never too late to learn, isn’t it? Knowing the main steps and tips will let you accomplish this goal without much stress.
Write down your income
How much does every member of your family earn per month? What additional sources of income do you have? You need to write down all information about your earnings to understand what amount of money you can replenish your family budget with. Sometimes it may be difficult to do it because of unstable income. For example, either you or your partner works as a freelancer and earns different amounts of money every month. In this case, you can take the average salary you got during the last year to predict the income. Besides your salary, you can also consider such points of getting money:
- Some benefits from the government
- Selling items you produce like a hobby (candles, toys, cakes, etc.)
- The money you get from giving your additional apartment for rent
Think about what else lets you bring money to your household budget, and write down everything accurately.
Consider your expenditures
The next step is less pleasant, but still rather important for building your family budget. Here you should write down all your expenditures within a month. Among the most common ones are food, clothes, rent, petrol, entertainment, etc. Even if you think that this or that bill doesn’t make a big difference, you’d better add it to your expenditures as well. All in all, you will see how every dollar matters. It is also important to remember all the hidden fees you have but don’t notice often. Among them are subscriptions (Netflix, Apple Music, etc,), phone bills, and so on. In other words, you need to add both fixed and variable expenses.
Add your financial goals
Now you should be realistic and set definite financial goals. What can you include? Anything you plan to spend money on. This list may vary from person to person, so here are only a few examples to understand the idea better:
- New clothes for kids
- Bathroom renovation
- Mountain holiday
- New sofa for the living room
- Teeth braces
To make things look more correct, try to sort them out by priority. For example, you need teeth brace, while a new sofa for the living room can wait until you save more money.
Rate your earnings and spending
Now you have two lists: your earnings and spending, so it is high time to compare them and see what you can have at the end of the month. Do you spend more than you earn? Than building a family budget will let you have the right priorities and cut off unnecessary expenditures. Do you earn more than you spend? Congratulation! Your family can save for the future and afford a high level of life. Anyway, a family budget can help you get rid of all distractions and see new perspectives.
Invite all members of your family
Those who think that inviting all members to building a family budget is not wise, are mistaken. Instead, you can take this chance to show everyone, espcially kids, how financial planning may play into hands. This is a great opportunity to teach toddlers proper money skills. We all know how demanding young kids may be. They ask to buy this or that all the time even if they do not really need it. By sharing your plan, you can show kids what other priorities you have and what plans you set. In the long run, they may see how important is to stick to this plan.
Create a family budget
All in all, you come to the final step after the preparation — creating a family budget itself. It is important to mention that building a financial plan is not one time action. It is a live project that you should adjust and change all the time according to your family’s needs. You can have different priorities depending on season, age of your kids, ect. That’s why all these factors should be taken into consideration all the time.
If it is difficult for you to track all earnings and spending, then you are recommended to use special mobile applications that will let you organize all your finances at last. Not very teck-savvy people can take just a piece of paper and a pen instead of installing the app.
In the Nutshell
Building a family budget may become a real challenge for some couples. However, you shouldn’t give up if you can’t manage to do it at once. Be patient and take some time to find out all the nuances. Once your plan is ready, remember to review it from time to time to make sure that you adhere to it correctly.
