Some people associate budgeting with sacrifice. “Family monthly budgeting is telling your family money where to go, instead of wondering where it went.
Remember that by following a zero budget you’re not depriving your family of opportunities, you’re building them. Paying off debt will “free” the family money, leading to financial independence.
I do not know about you; I have not yet mastered money management. The struggle is real, some months i stay within the budget, some months i go way over the budget.
For some months now, i have done the zero budget, i see good progress. Zero budget simply means your family’s monthly income minus family’s monthly expenses equals zero.
In the current challenging economic times, learning how to budget efficiently is much more important than in the past.
While some folks think that budgeting is really a somewhat hum-drum experience, it really is plenty of fun to operate together as a family.
Working together, gives everyone a sense of helping out with family expenses.
It can be a big surprise to find out how many great budgeting ideas your young ones can provide, including the younger ones.
May be a perfect method to strengthen or rebuild your credit, if you include the amount of the monthly payment on your budget. You need to be committed yet flexible when budgeting.
The whole idea of budgeting is not about bringing upon yourself severe punishment, but to bring harmony and balance to your finances.
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Even though you might feel like it is a good idea to safeguard your children from the realities of economic concerns, sometimes this backfires.
No need to let your children find out about every single detail.
Simply let them know that you are calling a meeting in order that everybody can discuss ways that your family can conserve money.
Children can actually tell when something is worrying or bothering their parents.
If you’re concerned about the finances of your family, it’s likely that your children know already that something isn’t quite right. Unfortunately children often feel that the issues that you’re facing are worse than they actually are.
When you call everyone together for the family meeting, explain that everyone needs to find ways to save on expenses, they’ll be relieved to know the exact problem is.
There are different activities you can use to start your family monthly budgeting experience.
To get everyone involved, try out as many ideas as you can.
Examples of ideas include conducting a garage sale, all family members contribute stuff they do not have use for taking home made lunches to school, collecting coupons as a family.
After all, even if you fail to save a lot of money, it is a good way to have some fun as a family.
While you experiment with a few of these ideas, take photos of the family working collectively.
Itemize your receipts, write down what you buy, where you buy it, the date you purchased, keep a running tally of how much you have versus how much you’ve spent.
Use can use an excel spreadsheet for that. You can also use our expenses tracker.
This is much more simple than it sounds. This helps you to figure out where your habits are. Where your spending money; it keeps you aware of all the times you spend money.
We don’t usually don’t think about that daily energy drink, cold coffee, or subway sandwich. We don’t realize that the reason we don’t have the money 30 cold coffees every month.
How much did you spend on groceries last month? How much did you spend in July? Sum the totals of the two months and divide by two.
This will provide you the average grocery expense per month.
Keep track of your expenses for three months, sum the totals of the three months and divide by three and so on.
The longer the period of time you used to collect the data, the more accurate your average expenses will be.
Now that you know your monthly average expenses and average income, evaluate where you stand and start planning your budget. Add all the monthly income.
Let’s say your family’s total monthly income of October will be $ 6,000. Every dollar you earn in October will be allocated to a specific task.
Let’s say your number one priority is to get rid of student loan debt. You make monthly payments towards that debt. While you make minimum payments on the other debts.
$ 450: Savings
$ 300: sinking fund
$ 600: emergency fund
$1500: Student loan
$100: Phone bill, internet & TV streaming
$ 50 credit card payment
$ 100 charity
After you’ve covered your family’s monthly expenses, use the left over money to make extra payment towards student loans, alternatively, put the money towards other family goals. It really depends on family priorities.
An Emergency fund is money set aside each month, to cater for unexpected expenses like when your water heater or household heating system breaks down.
Experts recommend saving up three to six months of living expenses in an emergency fund, particularly if job loss or death of a spouse would mean a reduction in family income.
A sinking fund is money set aside each month, to cater for expenses like car maintenance, kitchen or bathroom remodeling, birthdays, Christmas related stuff, teachers’ gifts, vacations etc. Expenses that you know will come.
Both the emergency & sinking funds help you avoid taking up new debt when disaster strikes or when Christmas rolls around.
Open up different sinking accounts with no minimum balance, instead of piling everything together. For example, Christmas, vacation, kitchen remodel, car maintenance etc.
It is advisable to keep your emergency and sinking funds in different bank accounts, at a different bank than the one with your checking account.
The Instant pot makes healthier tasty food in very little time compared to conventional cooking; you save money on your electric bill.
If you must, buy MacDonald’s or 7 Eleven coffee instead of Starbucks, it is as delicious, a lot cheaper too.
Everyone can contribute here, collect all the stuff in the house that people no longer use, sell it online or hold a garage sale. Use the money to make extra payment on student debt.
Do not think of family monthly budgeting as the ultimate cut the expenses experience, you’ll never make it. Depriving your family completely the indulgences might not provide financial gain.
Long term, your family may likely abandon the budget out of frustration for lack of rewards.