5 Major Rules of Family Budget Planning

Family budget planning does not have to be a major hassle or extremely complex. There are some rules of budget planning that can help you make sure your budget is effective and that is accurately reflects all the expenses and needs that your family may have.

1. Make Sure to Include All Expenses in Family Budget

This is a common mistake made by many people. A lot of times only monthly expenses are considered, and this can leave out important things like car or home repairs, which are not normally needed on a monthly basis, as well as money for special occasions and holidays for gifts and other event costs. When planning your family budget, this means looking at all the expected expenses that occur through the year, as well as through each month. These expenses can be divided to determine an adequate monthly amount which can be added into your family budget.

2. Create Family Budget to Fit Your Family

Every family is unique and different, and this means that a cookie cutter budget will not fit every family. Your family budget must realistically reflect your family’s income and expenses. This means any activities or sports that are played, any entertainment expenses, and other variables that will affect the monthly budget. Thiis will allow you to customize a unique budget that works well with your family’s lifestyle and income, so that it is much easier to follow and stick with the budget, and there is less of a risk that it is too restrictive.

3. Keep Track of All Spending

This step is crucial. For a month or two before you do your family budget planning, write down every penny you spend. This can be a real eye opener for many, because the small things can really add up in a month. One five dollar cup of gourmet coffee each day can add up to one hundred and fifty dollars a month. You may not realize how much you spend on the small things until you look at the monthly total, and this can be a great way to determine which expenses need to be cut.

4. Include Money for Entertainment in Family Budget

This is a common item that may not be listed in a lot of household budgeting, but it should be. Everyone needs some entertainment once in a while, whether it is a night on the town or simply renting a few videos. This component of your budget should include cable television or satellite service, plus any entertainment expenses you may spend going out or doing something together as a family, such as a visit to the zoo or the movies. This will keep you motivated and prevent the feeling that you never do anything or have any fun together.

5. Use the Keep It Simple (a.k.a KISS) Method

Budgeting and forecasting does not have to be complex or extremely involved. In fact, if keeping the budget is too difficult then the odds are you will not stay motivated. Family financial planning does not have to be more complex than the tax laws, and a simple outline of the monthly expenses and income may be sufficient for your family. Unless there are special financial considerations, professional financial advice should not be needed. Thousands of American households have set up and follow a household budgeting plan with no professional advice or assistance at all.

The information supplied in this article is not to be considered as medical advice and is for educational purposes only.