Family Budget Tips To Save You Huge Money!
Writing about a family budget is similar to discussing an emergency fund. Both are underappreciated and can be overlooked. Need proof? Only 39 percent of Americans have enough money to cover a $1,000 expense. What a horrific little statistic this is!
To me, budgets and emergency funds kind of go together. If you have an effective budget, you can get the emergency fund built up in no time. But if the budget is out of whack, you are going nowhere in a hurry. And the only emergency will be your 70 year old self still needing to be employed in the workforce. I say no thank you! And follow my family budget...
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Establish The Rules In Budget Discussions
Our family has kept a budget spreadsheet for a few years now. I love it! The spreadsheet is nothing fancy. Simply an Excel file that adds up our various monthly expenses and subtracts them from our income. Nice and easy.
There was a time a couple years ago, when we stopped budgeting for a few months. Life went on, our finances didn't sink. However, I realized I missed it. We used to have family conversations about it around the dinner table, pull it up and discuss trends throughout the year or if we were on target to make our goals.
I realize money is a sensitive subject and a root cause to most fights in a marriage. But, for us it wasn't. We had to set ground rules. The first was to set aside judging the other's decisions and expenditures. And instead, made goals and priorities as a couple where we wanted to be with our finances. The next rule was to openly talk about our finances on a regular basis and give it our full attention when one person wanted to talk money. Yes, act like grownups about it! This really helped keep us on the right track with our budget.
Why A Family Budget Is Important
- A budget reveals the overall health of your finances. I pay close attention to the monthly gap between income and expenses. The further the gap widens, the happier I am. A budget makes this so easy to see.
- A closely watched budget can stop you from keeping up with the Joneses. Thinking about adding a new Mustang for your available third garage stall? Sorry player, the spreadsheet says no dice.
- Waste is easily identifiable. We all have our own necessities that we need to spend on. But how about the dining out, alcohol and entertainment portions of the budget? Eeeks! Or are those the necessities? You get to decide! 🙂
- A successful budget gives you positive monthly momentum! Few things get me as pumped as seeing a beautifully constructed monthly plan be executed. And then to clear it and start over fresh the next month. Ahhhhh so refreshing! Yup, get nerdy excited about your family budget.
- Budgeting helps you achieve goals. Need to know how long until you can afford a Disney Cruise? Maybe you need to put new shingles on the roof. Your budget will be your guide to tell you how long it will take to come up with the cash needed for your goals
Family Budget Crushers To Keep Under Control
Here are some of the main monthly culprits that can cause you to live paycheck to paycheck if you aren't careful. These items will crush your finances faster than most others.
The Big Hitters:
- Car Loans
- Student Loans
Mid Level Money Suckers:
- Cell Phones
- Cable/Dish TV
These items may not seem like much compared to the "Big Hitters" but when added up they can count against you in a big hurry!
Tips For A Tidy Budget That Will Save You Money
- Live Within Your Means. This is the best financial advice I've ever received. The thing is, everyone has different circumstances. Personal finance is indeed personal and unique on an individual basis. Basically, don't buy a 3,500 square foot house if you can only afford 1,500 square feet. If a Benz is out of your price range, a Ford will do just fine. Be real with yourself.
- Pay Off Your Loans ASAP. Even if you live within your means, you will most likely have loans at some point in your life. It happens. The good news is, each one that you pay off will help widen the aforementioned gap between income and expenses! And every dollar saved in interest is better in your pocket than in your lender's.
- Negotiate Monthly Service Plans. I can't stress this one enough. Make sure to take advantage of all of the competition each company faces for your business. routinely call my our TV and internet providers to lower the price of service. You may have to do a little homework to find out what the competition offers but it is worth your time.
- Shop Around For Insurance. You will most likely leave hundreds of dollars on the table if you don't shop around for insurance periodically. I personally know of people who have stayed with the same carrier for years. When I hear how much extra they are paying for vehicle insurance it blows me away. Loyalty is good, but don't be taken advantage of because of it.
- Eat At Home. Dining out often can be a wallet killer. Not only is the food costly, but once you add in some highly marked up adult beverages, the bill escalates quickly! If you can keep this under control, it will do wonders for your bottom line.
- Be a Smart Consumer. Use technology to your advantage and avoid paying full price when you can. Related article:
- Implement a Strategy. Find a family budget system that works for you. If a spreadsheet doesn't do it for you, try another method to get you organized such as a budget binder or another system. Related article:
- Eliminate One Service a Year. Reoccurring services can eat away at your pocket book and sometimes go unnoticed. Take a look at your credit card statement and find something unessential to eliminate each year.
- Live a Healthy Lifestyle. It's time to make your health a priority. Get plenty of sleep, focus on nutrition, and exercise every day to maintain good health. It's amazing how much money a person can save when you don't have doctor visits and medicine to buy. Related articles:
- Lower/Raise Your Thermostat. A couple degrees can make a big difference in your monthly heating and cooling bills. In the winter, drop your temps down a bit and conversely, raise them in the summer. You will gradually adjust to the temperature and have more money in your pocket!
Final Thoughts on Perfecting Your Family Budget
If you are having trouble coming up with extra money to save or invest, zero in on your family budget. Make a simple spreadsheet and track every single expense. It's super easy to do and you might actually find it fun to analyze!
Establish rules in your budget discussions to avoid fights with your partner and hurt feelings. Let's all be grownups about it, mmmk pumpkin?
By identifying and chiseling away the wasteful spending, you can save more money and put it to work for you! Like most, I prefer cash coming in versus going out. Having a healthy family budget allowed us these possibilities.
Follow the tips listed above to identify ways to keep your budget tidy and save you money!
Have you started a budget within your family? If so, what has or has not worked for you?