Personal budgeting can be tough, but family budgeting can be even more difficult. While balancing work and family time, most parents struggle to find the time to create an effective family budget. Yet, family budgeting is essential for a family's financial wellbeing. Here's our guide to creating a quick and effective family budget, so you can achieve your wealth goals without a complicated budgeting process.
#1 Choose a financial goal for your family budget
The first step to creating a family budget is to choose a financial goal. These goals are typically long-term aims, such as paying off your car loan or saving up for your child's university fund. A great way to come up with a financial goal is to think about what made you want to make a budget in the first place. Whatever it is, your financial goal will motivate you to stick to your family budget.
#2 Pick a smart budgeting tool
It may be difficult to find the time to manually create a budget, so try a smart money management tool. The Finder app, for example, is a great tool to manage your money. It allows you to connect your bank accounts, loans, investments and credit cards into a single dashboard. This gives you an accurate overview of your finances, which makes it much easier to create and monitor your family budget. You can also track your transactions, monitor your credit score and receive alerts regarding the best savings deals – all for free. Budgeting tools offer convenience and security while bringing you closer to your financial goals.
#3 Get a full overview of your family finances
First, you need to gather details about your expenses and your income.
Next, focus on separating your expenses into their appropriate subcategories. Your family budget may include subcategories such as housing expenses, loans, credit bills and discretionary spending. This will help you understand your spending habits and help you cut down on unnecessary spending. It will also make it easier to add the information into your chosen smart budgeting tool.
#4 Use your family budget to control your spending
While it may be difficult to reduce housing expenses or pay off all your loans immediately, you can definitely reduce how much you spend going out. When evaluating your discretionary spending, ask yourself if that expenditure is really a necessity. Cut down on unnecessary costs, such as those daily morning coffees, and you will see your discretionary spending fall.
#5 Focus on repaying debt
Most financial experts agree that the longer you hold off on your debt, the bigger the problem becomes. Try paying off your existing debt or refinancing your debt with a cheaper loan provider. This way, you'll see yourself paying less interest every year. That's an easy and cost-effective way to drastically lower your spending. Ultimately, such measures will help you stick to your family budget.
Free family budget template
Here's a free budgeting template for you to use right away.
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