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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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The Easy Way To Show Your Kids How To Save Money

There are a lot of different ways that you can show your kids how to save money. But there’s always a bit of uncertainty over which method might be best. Let’s talk a little bit about some of the reasons why it’s important to have this conversation with your kids, and also provide some strategies that you can use to make the process a lot easier.

One of the key reasons many parents needs to talk to their kids about saving money is because it will provide them with a solid foundation for their own future. After all, very few people can simply live off interest and dividends without having to worry about where the money comes from. So it’s imperative that you have a low-key, relaxed conversation with your kids that helps get them to start thinking about why it’s important to save money. Aside from the obvious reasons like being able to buy the things that they’d want and need in the future, there is another important reason that kids need to realize — the unexpected situations in life that present themselves that require money in a hurry. You need to have some money put away to meet those challenges.

With that said, here are some strategies that you can use to help you have a positive, meaningful conversation with your kids about the importance of saving money. Try to use as many real-life examples as possible. Kids will often relate better to stories than to cut-and-dry instructions that they need to follow. It’s also a good idea to ask your kids a lot of questions along the way, to make sure that they’re actively thinking about what’s being discussed as well as to hear what they might come up with as strategies for saving money.

Perhaps the most important thing you can do is to teach by daily example. You don’t have to make this an awkward situation where you bring up the topic of money at every turn, but our kids soak up what we do and learn by example. Show your kids how to save money by actively doing it and mentioning it every day. Before long, your kids will be well on their way to being financially savvy savers.

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