When it comes to organizing your budget, knowing where the money goes is already a big task for one. But imagine needing to think about the expenses for an entire family! It’s going to need skill, patience, and a lot of coordination on your end, if you’re your own family’s financier.
Fortunately, we’ve gone far beyond the abacus days. In a fast-paced and hi-tech world, you can leverage useful tools that will make family budgeting easier for you. At the same time, learning a few simple skills can also improve your organizing process.
Here are our ten best recommendations on organizing your family finances:
1. Segregate the Necessary Expenses
Putting all your money in one place can be confusing, and at times even disastrous. Segregating your expenses like bills and major fees like loans would be a great idea to keep track of each expense.
This will avoid the confusion of one budget spilling over into another.
2. Plan Out the Budget
Speaking of budget, preparing a clear and well-outline budget will help you keep on track of your finances. Looking at how much you’ve actually spent with how much you’ve allotted lets you in on how much more you’re allowed to spend.
Doing an annual budget plan can be too big, though. If you want to zoom in on specific expenses, it would be best to have at least a monthly, if not weekly or daily budget plan for the family.
3. Organize Your Accounts
Naturally, you won’t keep all the money in the house. Having at least two separate accounts for your finances will help you develop a fallback in case one account backfires. But it’s also important to note that you should clearly identify which account is for.
A main account for spending would be ideal. Having a separate account for your savings will also let you generate necessary savings without breaking the
4. Talk about it with Every Family Member
Financial literacy should start at a young age. Opening up about your finances to younger family members is important so they can understand how to budget their own finances once they grow up.
At the same time, berating them too much may turn them off from managing finances wisely. Set a family meeting every now and then to discuss how to handle the finances together. After all, this budget belongs to everyone, so everyone should have a hand in it.
5. Be Honest
Making your budget bigger than it seems can be harmful for both you and your family members. Being upfront and honest about how much you actually have helps determine the necessary courses of action you’ll need to take in order to move forward.
This will also inform other family members on how they should each balance their own budgets to adjust accordingly.
6. Limit Your Spending Sprees
Funds are often very quickly depleted by sudden spending sprees. Prevent you or any of your family members from impulse buying anything you don’t really need. Think about the value of the object you’re about to buy, and if it’s not really an investment and not an immediate need, then drop it.
Another helpful tactic would be to allow some spending every now and then, as long as it’s in moderation.
7. Consult Each Other
As mentioned earlier, the participation of every family member counts in ensuring a healthy budget plan that everyone can agree with. While you don’t have to ring up your partner or mother every time you make a purchase, it’s important to consult each other every time you make a major purchase or acquire a loan.
For instance, buying a new car may entail you consulting with your spouse first.
8. Make Use of Software
Software doesn’t necessarily have to be complicated. You can make use of any basic tools like Excel, just to visually give you an idea of where your expenses are going, and how to manage them better.
Since most people identify as visual learners, it can help you tap into your own inclination for visuals and look at your expenses in a new perspective.
9. Prepare a List
Similar to creating a budget, and even visualizing your expenses, preparing a list of anticipated expenses can help you allot money to them beforehand.
As an example, if you have monthly dues like bills, make sure to allot a budget for them already in your monthly plan.
10. Consult with a Professional
It may seem too extreme for some, but if you really want a comprehensive breakdown of your expenses, there’s no harm in consulting with a professional. At the same time, this may work for families with bigger budgets and bigger expenses.
Managing your finances can be difficult, but with the right tools and skills, it can even be a breeze!