Let’s face it, most of us over spend at the holidays. In these difficult economic times, many of us do not have extra cash on hand so we use credit. Better to plan monthly for your spending to stay on top of your family finances.
No worries, a 30-minute planning session between you and your family members can help you get back on track for a budgeted family this year.
Look online for a family budget. Customize the spreadsheet or software to include your necessary and discretionary expenses.
Don’t worry when the calculations unnerve you. With a little planning, it can all add up to healthy family living.
1. If your household budget is a bit out of whack, or you’re having a hard time sticking to it, look for budget items that are “wants” rather than “needs,” and find out where you are having trouble staying within the limits you have set. It may be that you have set the limits too low, or that you are simply overspending in those categories.
2. Make some choices about which items to reduce or cut altogether. Don’t totally deny yourself “wants” but don’t let them get out of control either.
3. Translate your “wants” into a yearly planning calendar. Identify how much discretionary income you will spend on gifts, small household items, sports, hobbies and big purchases. Planning when you’ll buy that new car and what you’ll have to save to do it, is much better than over-spending on credit.
Teach your children the method of spend, give, save. Let your children track their own spending to get a sense of the real meaning of money. As your children learn to manage their own money they will develop a sense of mastery and pride.
Now the next time your teen wants that new pair of pants or your six year old wants the newest Webkins, you can tell them what their discretionary allowance is and if they don’t have the cash to buy it this month, they can save or do extra chores to buy it next month.
Budgeting puts the power of the dollar in your hands without feeling like, “OOPS, I overspent again.”
image credit: flickr/alancleaver
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Great advice to try to involve the kids in learning to budget. I have to force myself to stay away from the new drive-through Starbucks more than twice a week. Think about it: five venti lattes a week adds up to 90 bucks a month! So I feel virtuous when I do that, but I need to buckle down and cut more deeply.
Ah yes, I nixed my Starbucks habit when I left corporate employment to start my first biz in 2003. But lately, the habit has creeped back as I splurge on a tasty Americano a couple times a week. Lynne’s article inspired me to return to my 10% direct to savings approach and I will NOT squander it on coffee. Thanks for the comment MarcomMom!
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