When it comes to family activities, budgeting is rarely a word that comes to mind. Even for adults and parents, budgeting is usually avoided until the last minute. But making budgeting a family effort can be extremely beneficial. In more ways than just financial too.
Introducing your kids and significant other to budgeting can not only help you stay on top of bills and prepare for a rainy day, but also set up your kids for financial success later on.
A lot of individuals complain of a lack of education on finances and budgeting. This is particularly true of younger people finishing college. Budgeting as a family can help increase awareness of personal finances and budgeting, and give your kids the skills to effectively budget later in life.
If your family is going through a tough time financially, it’s also a great way to get everyone on the same page and helps everyone understand that tough choices need to be made. This can include cutting back on purchases and outings for everyone.
It can also help you be more responsible with your income and make budgeting an easier task. So, we put together a quick guide on steps you can take to set up a family budget.
How to Start a Family Budget
Ask for (Plenty) of input
A big mistake many people make when budgeting, whether alone or with others, is pushing ahead on their own. They don’t stop to ask for input or ideas on how best to budget or save. This is a recipe for disaster with a family budget.
Not only does it defeat the purpose of tackling budgeting as a family, but also makes you less effective and less likely to improve. Holding a meeting or just informally asking for input, even from your kids, can help improve your budgeting skills and get everyone involved.
This can improve adherence to budgeting by keeping everyone invested and help generate some unique ideas to help you all save money.
Be open about income and expenses
Another big problem with family budgeting is parents are often apprehensive about sharing how much they make with their kids. The same is true of their expenses. This often leaves younger members of the family in the dark about how money comes and goes.
By opening up about how much each member earns, and how it spent, it can allow kids greater knowledge of how to handle money later in life.
It also allows them to give better input and recommendations when brainstorming about how to save money or earn more. This brings us to our next point.
Do monthly updates and brainstorming sessions
In line with our previous two tips, constantly updating band aggregating ideas is what leads to better budgeting and financial skills. So, having regular meetings to discuss new budgeting ideas or ways to make money can be a great way to get new ideas and try new methods.
While younger members of the family will likely learn the most from these sessions, your be surprised how much new knowledge you come away with. It’s also important that each member’s contributions are valued to prevent disillusionment and keep everyone involved. So, be sure to take everyone’s input into account.
Consult outside help when necessary
As mentioned earlier, many people can think they know more than they do when handling their finances. This attitude can leave a lot of savings on the table and hinder how much others learn from budgeting as a family.
Bringing in an outside expert like a bankruptcy lawyer or tax consultant can help everyone gain more knowledge of finances. So, consider taking the time to invest in bringing in one of the above for a once-off brainstorming session.
Set up different savings accounts
Now for more practical tips. Carrying out all of the above steps will only help so much of action isn’t taken. Setting up accounts for all members of the family, even underage one is the next step. It can help them practice the ideas from brainstorming and teach everyone the practical side of budgeting.
This can help develop a base of knowledge and skill for budgeting that can last a lifetime. It can also solidify your family’s attempt to make budgeting a team effort.
