Budgeting for a family is not for the faint of heart. Expenses like braces, school supplies, daycare, and babysitting seem to add up far too quickly. When it comes to creating a budget, you need an accurate reflection of your family's expenses and a realistic approach to cut costs. These budgeting hacks for families will help you ease into a routine to get your finances in order.
Review your spending
Many families often get into the habit of spending each month without reviewing their bank statements. If you want to avoid printing out your statements, many banks offer online statements which can be easily reviewed on mobile or desktop. Some banks calculate the average spending in categories inside their mobile app.
Categorize your spending
Once you review your spending, write or type out the average expenses for common categories like groceries, gas, or utilities. Continue writing out the average for other categories until all expenses are accounted for. Other categories include credit card bills, mortgage or rent, daycare costs, student loan payments, or car maintenance.
Cut unnecessary spending
Consider cutting unnecessary spending such as unused subscriptions or memberships. Additionally, look to cut down on fixed expenses like phone, internet, or car insurance. Call your current company to ask if a better rate can be provided or ask friends and family for recommendations for cheaper alternatives.
Budget your expenses
Before your next pay day, write down any upcoming bills along with each due date. To the best of your ability, cut down on variable expenses like recreational activities or eating out. Keep only the necessary amounts for bills and expenses in your checking account between pay days.
Organize your bank accounts
Ideally you would have one to two checking accounts and one savings account. The benefit of having two checking accounts allows you to place the minimum amount of funds needed for living expenses, then place any remainder in the other checking account for automated bills or paying down debt.
Automate your bills
Automated bill pay is a painless way to keep your bills paid on time. Many companies offer a discount for enrolling in automatic bill pay. This method is best when you are able to transfer the necessary bill amount into the account enrolled in auto pay.
Create a sinking fund
Sinking funds are perfect for upcoming one time expenses. The idea is that you would save money each month towards your larger expenses you know are coming up. For example, a car registration for $300 could be divided by three months for a total of $100 savings per month. You can create several sinking funds so you aren't tempted to spend more on that vacation and have less to put towards a home remodel, for example. Just create a separate account for each fund, and use the money only for what you've earmarked it for.
Communication is vital to reaching your financial goals. Take time out of your schedule to communicate about upcoming bills and adjust spending habits together when unexpected expenses pop up. Budgeting is a team effort, and by working together your goals can be accomplished faster.