Involving your entire family in the household budgeting process will not only give your family excellent input and ideas on how to budget, but it can also help get your finances under control. Family budgeting is also a great way to teach your kids about money and the importance of financial responsibility.
However, creating a family budget plan and the process to achieve it can be challenging. Here are some tips to help you set up a successful family budgeting meeting that gets everyone involved:
By including everyone in your family who is old enough to understand finances and make a contribution, you're more likely to have a meeting that's beneficial. Make sure that your children walk away from the meeting feeling both positive and a part of the team.
Have a plan
It's important to go into your family budget meeting with a clear list of goals you want it to accomplish. Those goals could include:
- Establishing how much the family will be allowed to spend and in what categories.
- Reviewing prior spending and whether it stayed on budget.
- Identifying problems and brainstorming solutions that will resolve them.
- Discussing your overall financial goals and whether you're on track to achieve them.
Estimate your income and expenses
This step is especially important if it is your first family budgeting meeting and you're setting a foundation for future meetings. One way to do this is by taking your last three months worth of income and creating an average (especially if the jobs or income of family members fluctuates from month to month). Once your average income is established, review three months of expenses to get a true estimate of your spending. Don't forget to include birthdays and holidays.
Whether it's on paper, on a phone app, or a printed spreadsheet, the overall budget should be available for everyone to see. Even if it's just on a phone app you can still pass it from person to person.
How often should you meet?
Ideally, you should schedule a weekly family budgeting meeting. The first weekly meeting of each month can begin with a brief look at the previous month. It's helpful to have meetings consistently on the same day of the week, which not only sets aside time when everyone can attend but also establishes the kind of consistency that helps make the meeting a habit.
Allow for luxuries
You and your family are going to feel deprived if the budget is so tight that it doesn't allow for some luxuries. Being creative about what constitutes a luxury can allow you to afford a few small luxuries or privileges each month. This can include a wide range of things, whether it's a special family dinner night with pizza or a luxury item such as a family vacation or new computer.
Keep it brief
You don't want to rush through your family budgeting meeting, but you also don't want it to drag on and lose the interest of those involved - especially younger participants. If you're well-prepared for the meeting, 20 minutes might be all the time you need and will keep things on pace and fun.
Your friends at Peoples Bank believe in the importance of financial literacy for everyone in the family, no matter their age. Contact us today to learn more about our services and accounts to prep your family budget for success.