So, the summer is coming to its end and we should be back to the reality of everyday life. The kids are back to school, the world is getting back to its rhythm slowly and it is time to set the budget for the next year.
How to set the family budget and stick to it? It sounds like The Collatz Conjecture problem.
But if you plan it together with your other half and be careful when planning, you should come to a smart solution and even start some savings.
Here are some important steps to follow to get the family finance in the green lines.
List Your Income
This is the first thing you should add to your family budget. Consider your net income, after-tax withholdings to plan an accurate budget.
You could choose an electronic budget planner or to be a little bit old-fashioned and stick to paper- pen planner. Of course, the electronic one will save you time and problem-solving.
Honestly, it is not that important how the budget planner will look like. It is important to keep the balance and try to do more savings each month.
Add Your Expanses
You can go ahead without the expanses part. Sometimes we really don’t want to confess how much we spend on emotional shopping. But when we add them to the table probably our better conscious will take supremacy.
In the expanses tab, you must add all rental, mortgage, communal expenses, kids’ additional lessons, and activities. Shopping essentials and food, insurance, gas, and car expenses.
Set A Saving Goals
Setting your saving goals is the heart of the well-prepared family budget. Many people rely on the S.M.A.R.T. acronym to push them up and improve their methods and keep them on track.
Try to add short-term, mid-term, and long-term financial goals to learn and get used to the process.
- In short- term financial goals you can add some special or exotic vacation or a trip. Paying off credit card debt also could be considered as a short- term goal.
- Midterm goals include a new car, the first down of your house, and paying off your student loan.
- Long- term financial goals usually are retirement or even longer periods of time.
Track Your Spending
Tracking your spending will help to reduce emotional and discretionary spending. In other words- these are all the little things that make us happy in some way. Like hobbies, social life, and spoiling products.
Well, it doesn’t mean you have to isolate yourself and give up on the activities you love. In a matter of fact, this is the breaking moment in the ultimate family budget and even in relationships in general. You need to learn to balance and how to make compromises.
Make A Meal Plan
How it is related to the family budget?
Having a weekly or even monthly family plan is not only to save time but to optimize the family budget too. Make a shopping list anytime you go to the store to avoid buying products and food you don’t need.
It is important to learn how to shop smart and avoid supermarket techniques for bundle offers and promotions.
Be Prepared For Unexpected Bills
Be prepared for unexpected bills and expenses. Establish an ER fund just to make sure you need extra money for unpredicted circumstances.
Organize A Budget Dates
Set budget dates once per month and discuss your family budget. Prioritize your monthly expenses and check the progress of the financial goals.