Raise your hand if you want zero monthly bills? If you want to retire comfortably by 65 years old. If you want to provide your children with a secure and debt free future. If you raised your hand to any one of those, you have the same desires as I do for my family. The only way to reach these kind of lofty goals and see financial freedom is to change your spending habits and with changing spending habits, comes a budget. These are my top 3 tips for managing your family budget. Implementing these tips will help ensure you stay on track and that you don’t feel completely deprived in the process.
We are about two years into our finance transformation so I have picked up a thing or two that helps make this lifestyle easier. When my husband first brought up the idea of living completely by a budget to me two years ago, I have to admit I was skeptical. Hear me out- it wasn’t living on a budget per se that had me spooked as we were already living on one loosely. I was afraid of the strict and confined budget I knew we would have to follow in order to really see a change in our finances. I was skeptical because I know how difficult it is to deprive yourself of what you want in this instant gratification society we live in. I mean- I know I’m not the only one who wants the new car, bigger house, expensive accessories, and new furniture right this second! What do you mean I have to wait until I can buy it with cash? And after our savings is nicely cushioned? This just seemed way to rigid to me as a girl that has admittedly always enjoyed the finer things in life. I’ve come a long way my friends.
I cannot stress how important it is to make a budget that is realistic to your families lifestyle. For example, when you are your partner sit down to map out what your family budget should look like, you will never be able to stick to the budget if you both are not on the same page on the categories and budget amounts. If one of you believes a grocery budget of $300/month is realistic while the other who does the shopping knows that even if you change up things and get really strict that $450 is more of the reality, you will be consistently over budget groceries. Lock in a realistic budget for your family and stick to it!! This includes line items for things like grooming, children necessities, etc. If it is something you know you NEED month in and out, it needs to have a line item in the budget.
Communicating with your partner while on living on a budget is a crucial component to success or failure. I know you have all heard the heart wrenching statistics regarding the impact finances have on the current divorce rate. According to CNBC.com, money is the leading cause of stress in relationships. You have to be on the same page when it comes to money.
When you are living by a budget in order to achieve a financial milestone, it may seem like a lot to have to run certain purchases by your spouse. I know it was for me at first. I thought, I am contributing to this households finances so if I want to buy this pair of $300 boots today, then I should be able to do it! Entitlement will get us in trouble every single time guys. I did not need a $300 pair of boots when I already have a closet full of shoes and clothes I hardly wear. Prime example of a time when you have to say no to yourself on a frivolous expense.
For us, we agreed on a certain purchase amount that we need to communicate with each other on prior to the purchase. This way, you are not constantly in a disagreement about who is overspending each month etc. Each partner has a say so in how your dollars are being spent. A simple text will do to get your spouse’s opinion on a purchase that passes the dollar amount you agreed to. If you and your partner have issues communicating about spending, you will find yourself in trouble month in and month out on the budget.
Every single dollar my husband and I earn enters the same account. His money is my money and my money is his money. We share everything. I firmly believe that separating your money is cause for division in your household. This is just my opinion. I know many families who maintain separate accounts and do not have an issue with it but when it comes to managing a budget, knowing where 100% of all the money that is coming in and going out is a major part of the system working. And when you take marriage vows, you become one. This includes with money. Managing a household budget is a hundred times easier when you have one account to manage.
I believe these simple tips are the reason we have cleaned up our debt and are now able to live on one income. It has not been easy but we know that the sacrifices we are making now will payoff for our future. We still have a long way to go like finally getting rid of student loans once and for all and paying off our second vehicle. We will not achieve this without adhering to a budget unless one of us gets very rich very fast 🙂
What are your tips for managing the family budget?
