How to Create a Family Budget in 2020

How to Create a Family Budget in 2020

Come Together as Partners

If you’re a two-parent family, it’s important that both partners come together to resolve any spending issues. Being on the same page is critical for financial communication – here is a great article on the most common money conflicts in a relationship and how to work through them. Consider, are you more of a spender or a saver? What about your partner? Are you both transparent to one another with what you’re comfortable spending? Is there a limit to how much you can spend before consulting with your partner? These are all questions to consider when starting your family budget! 

Evaluate Your Current Situation

One of the most difficult parts of creating a budget is facing the numbers! But this is the perfect time to bring out the bank statements and evaluate what you spend the most money on. If you live here in Rexburg, it’s likely that most if not all of your expenses are necessities for your current life, like housing and education. However, other small expenses can still add up. Once you have an accurate sense of what you’re spending and where, it becomes that much easier to create a realistic budget based off of a combination of wants and needs. Go through your statements together and look for patterns that may have gone unnoticed!

Choose Your Budgeting Tools

If you’re scratching your head and wondering – all right, I know my spending habits, I know my necessities, but where do I actually start with my plan? – look no further! There are many available resources for you to create your budget with.

  • There’s always the trusted paper and pencil – however, budgeting is easier than ever with all the new digital resources available nowadays, and they’re definitely worth a look. Here are a few ideas you can work with to create your family budget.
  • Phone applications. Personal Capital, Mint, Wally, Clarity Money, and Zelle are all applications on your phone that will allow you to keep your budget with you wherever you go.
  • Spreadsheet templates. Google Drive, Microsoft Office, Mint, and even the Federal Trade Commission have budget spreadsheet templates for free. Access them here

Control Spending

Now’s the time to put your new plan in action! It will probably be difficult to stick to your new plan. If not, that’s awesome! But when it gets hard, remember why you’re doing this. Maybe it’s to finally get out of debt, or pay for your education, or fix that car, and something else. Let that motivation keep you in check! Check out some practical tips for spending less right here.

Pay Off Debt or Build Savings

Do you know what the total household debt in America as of the start of this year was? $13.67 trillion, according to the Federal Reserve Bank of New York. Yikes! With such a large number, it’s possible that your family, like most Americans, is in debt. Really, the only way to accomplish this is to pay the minimum amount every month, and if you find yourself with extra cash, allocate that to paying off more than the minimum. You’ll get out of debt sooner and pay less interest overall on what you do have. If you’re not in debt, and have the ability to save, use that as your alternative. Discuss a set amount with your partner that you’re comfortable paying to a savings account each month, and meet that payment whenever you have the funds to do so. Prioritize this, because you never know when you’ll need to pull money for an emergency.

Check in Frequently

Keeping a budget for your family can be a difficult, but extremely rewarding task as you see your efforts being rewarded with more financial freedom. Checking in regularly with your partner to update your budget when necessary and discuss how you’re adjusting to your new spending habits, so that those lines of communication are kept open!