Introduction to Family Budgets
When reflecting on family budgeting and inquiring why not more families are using it, it becomes self-evident that similar skepticism runs rampant and deep in reality and society, even globally so.
Once you start probing family budgets, expending time and energy researching the subject in-depth, it becomes quite clear, that most families are caught in a vicious, almost never-ending cycle of “what comes in must go out.”
Most families might feel that budgeting is a futile effort, unnecessarily burdening them with thoughts and ways to go broke methodically and slowly, without the creature comforts and indulgences of our human modern-day society.
Others might voice that they feel as if they are merely throwing money away, in a never-ending and dizzying spiral of spend, spend, spend. People are getting deeper and deeper into debt, no matter how hard they try to get out of it. Questions are then raised: How do we stop these courses of action? How do we change the thinking around family fiscal discipline?
Put simply, in “How to Budget for the Family”, we focus on how to empower families to set up better, more realistic budgets, stick to them and celebrate their successes (and learn from their failures!)
Families eventually do have a monthly surplus, see their savings start to grow, consolidate their debt, set aside discretionary funds and personal allowances, build their wealth and become more aware of their proactive involvement and responsibility regarding their lives and finances. This is when excitement builds and fundamental thought patterns as well as spending attitudes are changed.
Budgeting is seen as an accurate measurement of success when significant behavioral transformation is taking place on the landscape of the family budget, spending habits and financial patterns we observe over time!
Do you ever feel that you do not have enough cash at the end of the month to pay bills, buy necessities of life? Are you barely making a dent in your credit card debt balance, no matter how hard you try?
Here is a reality check for all of us: if we choose to spend it, it is gone for good. We cannot spend it on anything else. Are you perhaps worried about a nest egg for your golden years or savings for early retirement? Then you have arrived at a source that can provide some prudent tips on how to start, finish, implement, stick to, revise and refine a family budget.
The family budget is a dynamic process, even more so than a mere static work-product, result, process-outcome or document. It will, can and should change over time. It becomes a barometer of a family’s fiscal circumstance, resources and health.
Maybe budgeting is not as much about reflecting on what you cannot have, but more about thoughts on how to stretch, invest and spend your earned income more wisely. In short, it is about making your money going further.
This quick reference how-to guide was developed to assist you with setting up your own personal, household and family budget, to help you with all of the above and more!
A couple of general money-saving tips will also be provided. There are also thoughts and spending patterns that need to change, in order to become fiscally more disciplined and many techniques, attitudes, habitual behaviors that we need to unearth, evaluate and possibly change, before you even start budgeting.
For example, being a bargain hunter looking for good buys, cutting down on careless spending, being on the lookout for careless credit card spending and letting the person who handles money best in your household actually take care of it, are all good examples of what we mean.
For most households, a budget is no more than a spending plan. Any spending plan can help you see where your money is going. It fits your spending to your income. It reflects how we get the things we want and need most, while being ready and prepared for bills we must pay every month.
For most families, it is simply about making a budget you can live with and stick to easily. It is not a difficult exercise, but one most people fear, avoid or dread because of the unknown and perceived complexity of it (sometimes wrongfully so!).
Part of the goal of this guide is to demystify family budgeting and highlight an easy systematic process to setting up a quality family budget.
Many things actually drive our expenditure. We choose to spend our money on things we value, need, prefer or consciously choose. For some it is clothes, for others it might be something as simple as taking that yearly vacation.
Whether you are making financial decisions for yourself or your household, you might have to make some serious choices and adjustments regarding your financial freedom and situation.
“How to Budget for the Family” is a quick-reference, easy, how-to guide, meant to take you through the typical, who, why, when, what, where and how questions typically asked when considering fiscal planning for the household and/or budgeting in general for your family need, means and circumstance, now and for the future.
Budgeting is not just about restricting spending and living a cheapskate life. It is about insights, wisdom, informed decisions, action and sustained discipline when it comes to your household financials.
This guide will invite you to learn more about systematic budgeting. It focuses on practical application and zooms in to apply these “best practice suggestions” in your own home. It empowers you to put together a dynamic, financial plan that suits your pocketbook, means and circumstance.
Financially speaking, assess quickly where you think you and your family are today.
Money makes the world go round! It is no secret that some of us have more, some have less. We deal with our own personal finances and cash management distinctly differently.
Households have varying needs, means and circumstance. Our money-management skills are also at different levels, as is our debt and savings!
Budgeting has to do with most of these perspectives and reflections.
The purpose and goal of family budgeting is financial situational analysis and informed awareness,
(ii) Cutting cost,
(iii) Gaining control or curbing spending and
(iv) Starting to save, building up wealth and liquid assets over time.
There are many phases and steps to go through when creating a budget.
If you are looking for ways to manage your money better, making it reach and stretch further, and providing you with financial security and a more solid future, then you have come to the right place.
In this brief introduction on family budgets, we have already introduced our first couple of key questions:
We elaborate a little more below. For most people, a family budget is the equivalent of a simplistic process: money is earned and comes in; money is spent and moves out!
It is a fluid, easy-flow, one-directional, cash management process. It is driven by daily life, a spending-orientation, or no plan at all!
For most families, income is also fixed and outflow typically increases over time, as the needs of the family fluctuates and changes. Loading up on debt is also very typical for the majority of our families. If this sounds very much like a vicious circle, it is. Most families are caught up in it and constantly battle to get out.