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Family Budgeting 101 – What You Need To Know Now

Every family that plans to have a solid financial foundation needs to have budget. This is something that can terrify a lot of people. They assume that having a budget is the equivalent of an austerity plan where everyone shares the same spoon and one can of soup and a loaf of bread is shared among everyone for the day. For some reasons, budgeting has been associated in the minds of far too many people with pain, sacrifice, and denial.

You need to really start by transforming the way you look at having a family budget and realize that you’re actually giving yourself the freedom to be able to have more of what you want without the stress and tension that typically accompanies making purchase decisions. Without making this mental transition, the idea of having a budget will be met with a lot of skepticism and scorn. So the very first thing you need to do is have a conversation with your family about why it makes sense to have a rudimentary budget — something is better than nothing.

Your family needs to come to an understanding that you cannot spend more than you earn insofar as income. It’s not a sustainable approach to life, regardless of how easy credit cards can sometimes make it for us to literally buy whatever we want without really stopping to think about the cost.

From a strategic standpoint, it always makes sense to ease into the process by starting to account for exactly how much money is being earned every month, and to account for how much is being spent — and on what. Remember, you can’t really create a budget out of thin air. That’s not practical. You want to start by measuring what’s happening in your family’s financial life. That will make it a lot easier for everyone to see the financial picture from which the family budget is being drafted.

Try to include suggestions and ideas from everyone in the family. Before long, you can gradually ease into having a realistic budget that helps your family save more money and to live a less stressful life. Not having a budget and leaving all of your finances in the dark will breed anxiety and uncertainty. Go ahead and implement the suggestions you’ve just been presented with. You’ll be glad you did.

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Why Does Having A Budget Help A Family Make Financial Progress?

Families often wonder if having a budget will really help them make financial progress. Some even wonder how a budget is capable of making that possible in the first place. Let’s talk about why it’s so important for a family to have a budget. Once you understand this, it will become significantly easier to implement and maintain a budget for your and your family.

It is often said that we have a tendency, as people, to take more of an interest in those things that we track and monitor. Nothing is more important to your family finances than to track and monitor the amount of money that comes in every month as income, and how much money is spent every month. This provides a family with a crystal clear sense of where they’re at insofar as their financial stability.

Imagine for a moment how stressful it would be not to really know how much money you’re actually getting to keep at the end of every month after everything is counted. This is actually a reality for a lot of families. They generally know how much money they’re earning, but they do a terrible job of tracking where that money goes. They might have a vague notion of what they spend money on, but if you were to ask them to give you precise numbers, they’d be incapable of doing so.

Only by tracking and monitoring where you spend the money you have can you really begin to get a clear sense of what your monthly financial picture looks like. Don’t make the mistake of assuming that everything is fine just because you haven’t started getting phone calls from bill collectors.

Go ahead and take the time to start monitoring how much money you and your family earn, and how much you spend every month. Try to be as detailed as possible with regard to how the money is spent. Then, when you sit down to craft a budget, you can be realistic because you have a very clear understanding of where the money is already being spent.

Having this kind of knowledge will help your family make financial progress because you’ll be able to start allocating money for savings and investments as well as cut down on unnecessary expenditures.

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