How to budget for YOUR family
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A major part of budgeting is learning how to budget for your family. A family budget is simply a record of money you’ve got coming in and the money you have going out.
Budgeting when you have a family becomes really important when you’re trying to clear debt or build your savings pot. There are a number of ways having a family budget will help your family.
The first step to living on a budget is to be honest and clear about what you’ve got coming in and what you’ve got going out. You need to gather everything you can so you can make an honest assessment of where you can cut back, and also where you can’t. When you go from month to month hoping you make it to the end, it’s not only stressful but you also have no real idea of where your money’s going and where you could make savings.
Why does my family need a budget?
As soon as you create your family budget you’ll be able to see where your money is going each month. It sounds simple doesn’t it. Yet when my own family started out with a budget, I was AMAZED at the places we were loosing money each month.
If you’re not seriously budgeting yet, you’re missing a chance to change your financial life for the better. Why do you need a budget that suits your family?
- To create security for the future.
- To let you save money and get a fully funded emergency fund in place.
- To teach the children good financial habits.
There are so many eye openers when you start budgeting. In our family, there were loads of small things. Ice creams that cost £1.40 EACH from the shop outside school? A pack of 6 ice-creams from the supermarket cost 99p. Three kids having an ice-cream each a week during the summer adds up. I just had to make sure we had them in. Organize yourself, and they’ll be no need to go without.
So by making a family budget, you’ll get a real idea of where your money goes. It allows you to put your money into ‘categories’, which I came to love after a while, because it’s so helpful.
Separate needs from wants
We made a list of NEEDS, these being the things that my family absolutely couldn’t do without.
I did have to look several times at this list. It’s really easy to tell yourself that a want is actually a need. There were a few things that made the NEED list at first and then got demoted to the WANT list. Every families budgets are different, and something that might be a want to someone may be a need to another.
Our original list of WANTS was a long one, and one that we cut back a lot. It started off feeling a little like we were depriving ourselves, but I quickly came round. I decided that organization was the key.
Your family budget will also allow you to think and plan ahead. When we started our own budget, we ran a car. We knew our car needed 1) an MOT every year and 2) was highly likely to go wrong at some point, as had been the case perviously.
Our way of dealing with car repairs in the past had been to have a melt down, panic, then decide we’d have to credit card the repair bill as we didn’t have the cash. Smart huh? Although the repair bill always threw us, we shouldn’t have been surprised.
Budgeting allowed us to put a little away every month for car repairs that it didn’t need, yet. But we knew they were coming and when they did, we didn’t have to add to our debt.
Making a family budget also helped me to realize something else. Everything we did everyday was inter-connected.
It was a crazy revelation for me.
Buying the ice-creams from the shop meant we couldn’t afford the car repairs. All the tiny things that I’d told myself didn’t matter, DID matter.
And when I realized this, my whole outlook on money changed.
How to make a Budget Plan
The budget essentials
The simplest way to make a budget from scratch is to make a list of your outgoings each month.
List what money you’ve got coming in. (If you’re short, we’ve got ways to boost your income). The list what money you’ve got going out. Start with the essentials first.
What might essentials be? Well your rent or mortgage must come first. Council tax. Utilities. (make sure these are the lowest they can be).
Food would be an essential :) Travel costs if needed to get to work. Then once you’ve got your list, go through that list and put a star next to anything you might be able to renegotiate.
Spend an hour on the phone or looking up comparison sites to see if your bills could be lowered. We saved hundreds each year changing our gas and electric over to another utility company. If you can’t get the price down, that’s okay, but at least you’ll have tried.
Make sure you’re using meal plans and grocery shopping in the most efficient way you can. Take advantage of offers only if they fit in with your meal plans. We cut our food bill each week by third after overhauling the way we shopped.
After you’ve done this, you’ll have a definite list of essential outgoings.
For our family, we decided to put money aside for debt repayment before we looked at our list of WANTS. By definition we wanted to live debt free and be a debt free family, so this needed to come after the Essentials but before the WANTS. Your family might be different, I guess it depends on your end goal.
After reading this book by Dave Ramsey, we decided that instead of incorporating the debt we had into our budget, we just needed to get rid of it.
The more I read, the more I realized the things we could do if the debt we had wasn’t there. We used the Debt Snowball repayment method (as Dave Ramsey recommends) and ploughed through our debt.
If you’re not a family that carries debt (lucky you!) or you’re not ready to banish it from your life yet, then you may want to out your WANTS list before your Debt/Save List.
This is just the way we did things. We set aside 75% of what was left after the essentials as the amount we wanted to put towards our debt snowball. We then made more money on the side to throw at the snowball to speed it up.
The Budget ‘Wants’
Can I assume you’re reading this because you’re trying to save money? Or become a Debt Free Family?
We had quite a simple way of dealing with wants. We found alternatives. If you were thinking that you might have to give up things you really enjoy, I have news! You don’t have to. But you do need to be creative and come up with alternatives.
Some example of swops we made to let us stick to our budget;
- Take away night. This had to stop. £30 a week. £1560 a year (What were we thinking???) Instead we had Fake Away nights. This website has some great recipes (get ingredients from the shops!). Healthier, surprisingly fast to make and CHEAPER
- We swopped an after-school paid for IT class for Coder DoJo. Free, taught by people in the actual industry, and the kids made new friends out of school. Winner.
- We ditched the after-school childcare I needed once a week. Instead, I found a mum at school who also used the club and we arranged that I would collect her daughter once a week (saving her money) and she’d collect my son once a week in exchange (saving ME money!). Free Childcare!
What does a Family Budget look like?
I love a pen and paper. I’ve tried all sorts of online budgeting methods, and the furthest I’m prepared to go is an excel spread sheet. (And that’s only to supplement what I’ve written on paper!) A planner is my method of choice. Specifically an Erin Condren Planner. Although it doesn’t have a specific budget page, it’s easy to put together and works for me!
There are thousands of FREE online budget templates ready to print off available. Here are some of the best if that’s your thing :)
We have one here:
and there are loads to choose from across the web. These two below I really like as well.
- This budget planner from College Life Made Easy is simple, clean and just works!
- This is a little more involved, for the person who loves a bit more detail from Blog.WorldLabel
If you’re feeling inspired, you can easily make your own budget planner. It’s quite easy to put a good one together that works for your family. Once you’ve got the columns together that you need, if you’re really struggling to digitize it, head on over to Fiverr where you’ll find someone willing to do it for you for a few £’s. The you can just print and repeat every month.
Good Luck. And let me know how it goes!
Looking for more tips on family budgeting? Budgeting is a Challenge has some ideas here!