Family budgets work

The idea of a budget seems simple enough, doesn’t it?


Money comes in and money goes out.

Usually, though, balancing income and expenses is not that easy. A budget or spending plan can help you manage the family’s finances.

Money problems can create a lot of anxiety and stress.

They can be a major source of conflict within a relationship. Creating a reasonable budget can relieve some of this stress. It is important for a family to sit down and work on a plan together. This way, each member is involved and given a say in the family’s major financial decisions.

Where do you start?

Ask yourself – what are your family’s spending habits?

Do you have a budget or spending plan?

Are you able to save some money each month?

Do you feel frustrated and tense when you think about your household expenses?

Does your money run out before the month ends?

Do you talk to your partner about money issues?

How do you get better control of your finances?

Get organised.

You will need to take a longer term look at your family’s spending habits. Gather your utility bills and invoices for any major expenses you had during the past year.

These will help you estimate your yearly expenses. If you don’t have them or have moved to a new area, utility companies will be able to give you an estimate of these costs. Credit card companies also maintain records of their card holders’ transactions.

As well, you will need pay records. If necessary, your employer or last employer will be able to give you information about your pay.

Design a family budget

You can look for examples in books, magazines, or Internet sites. You may also want to talk to someone at your bank or look for a course in personal finance.

Write down your household income from wages, pensions and insurance starting with the current month and then record the month’s expenses. You may need to search through your cheque book, bank statements and receipts. The more accurate and detailed you can be the better picture you will get of your financial situation.

Think about your family’s lifestyle and spending habits. Your partner and children should be involved so they will understand and be part of the decisions made.

What are the most important things you spend your money on? What could you do without?

Estimate your family’s income and expenses for the next year. You can base it on your current month’s budget. Do you expect your income to change during the year? Have you accounted for expenses such as Christmas, holidays and birthdays?

Before making a purchase, ask yourself – do you need it or do you want it?

A family budget can:

Make the best use of money

Save money

Reduce stress

Maintain family harmony

Make you feel good about yourself

Ways to save money:

Pay yourself first. You won’t miss the money you put away if it is built into your budget.

Pay down on your debt and reduce or avoid interest charges.

Are you paying for telephone or cable TV services you don’t use? These costs can really add up over time

Cut down on eating out. Prepare special meals at home.

Make a food shopping list and stick to it when you go to the store.

Check the free programmes and services that are offered in your community.

If you quit smoking, try to save the money you would have spent on cigarettes.

Use the public library. You can save on buying books or magazines and Internet service.

Share babysitting and child care responsibilities with friends or neighbours.

Learn to repair things in your home.

Resist impulse buying – think about buying the item for a couple of days.