Building a Budget that Works for Your Family

Setting up a workable budget is one of the most important things you can do to gain control of your finances. If you have the money to pay your bills each month, it is easy to assume you are making smart choices. Life is unpredictable, and you need to have a plan for when the unexpected happens. Setting up a budget that works for your family will give you peace of mind.

Develop a Plan Together

Sit down with your significant other when you are ready to develop a budget. Both people need to be involved in the budgeting for it to work. Every family has different priorities for their money so you will need to work together to find goals you both agree on. Retirement contributions are important, as is setting money aside for an emergency fund. When deciding whether or not you should put aside money for your child’s education, the answer is that it depends. You should not prioritize saving for your child’s education over funding your retirement. There are many ways to pay for college, but you do not have the same luxury when planning your retirement. Many parents are unable to help with college expenses, and their children go to school. If your finances do not permit contributing, you can help in other ways. Be sure to complete your taxes as early in the year as possible, so your child can submit his FAFSA. Completing the FAFSA will give your child access to a variety of financial aid options.

Check Your Expenses

Keeping your expenses low in areas that you do not consider a priority allows you to splurge on areas you do. Take a hard look at any subscription services that are being automatically deducted from your account. Do you use these regularly? Will you miss them if you suspend the service? Cancel any services you don’t use, and if you are on the fence, consider canceling those as well. If you find that you miss them, you can always resubscribe, and you may be offered a lower rate to tempt you back. If you are still paying student loans, look into refinancing to save money. Refinancing your student loans allows you to lower your monthly payment, shorten the length of your loan, or both. This is money that would have previously been paid in interest, making it a particularly satisfying way to cut costs.

Continue to Evaluate

Budgeting is not a one-step job. You will need to track your expenses to be sure that you stay on track. There are a variety of available apps you can use to make the job easier, or you can use a spreadsheet, or even track on paper. Choose the solution that you are most likely to keep up with. If it feels too difficult, you are less likely to maintain this task. After a few months of budgeting, sit down with your significant other, and have another talk. Look over the numbers and see if you are staying on track and making progress toward your goals. Talk honestly with one another about how you both feel. If the budget is going to work long-term, neither of you should feel deprived. A successful budget should make you feel empowered.