Want to create the ideal budget for your family but aren’t sure where to start? Well you’re in the right place. Today we’re chatting about three steps to take to ensure budgeting success – no matter how bad your financial situation looks right now. Sound like something you need? Well then, let’s get started!
How to Create the Ideal Budget for Your Family
Well hey there and welcome to this episode of the Financial Fix Up Podcast. I’m your host, Sarah Brumley, and today I’m excited to jump into the nitty-gritty of achieving financial success – starting with that budget.
And trust me, I know that creating an ideal family budget can seem complicated and overwhelming, but it doesn’t have to be. In the years since I created my first budget, I’ve come to realize that the feelings associated with setting up that financial plan most often stems from not knowing why you have the plan in place to start with.
Sure, everyone needs a budget, but WHY does your family need a budget? What mission will it accomplish for you? What will the long-term benefits be?
If you can’t answer those questions, then you’ll definitely want to pay close attention to the three steps I’m giving you today to ensure that you create the ideal family budget.
Spoiler alert – there’s no one-size-fits-all budget plan that works for every single family. If anyone ever tries to sell you on that concept, you have my permission to run in the opposite direction as fast as possible. There is a tried and true strategy to create the perfect budget for your family, though, if you are willing to follow the steps to create it. So that’s exactly what we’re going to focus on going forward.
#1: Know Your Goals
The first step to take comes down to knowing your goals.
One of the common reasons I see budgets fail is because they don’t have goals behind them. And I’m not talking about the New Years Resolution-type goals we set at the beginning of each year and never follow through with. Nope, I’m talking about the things you want to and WILL achieve by having a budget in place.
Putting together a budget just for the sake of having one won’t do you any good. You have to take it a step deeper. That’s why, before you even start to look at the numbers involved, it’s important to know what your goals are.
When Justin and I first started budgeting – nearly 18 years ago – we had no money. I mean NO money. We easily zeroed out the bank account just paying our basic living expenses and spent the last week of nearly every month hoping that the food would last until the paycheck arrived. For that reason, we decided that having a budget was a necessity. We needed to learn how to handle the little money we had so that we could make changes that would get us out of the paycheck-to-paycheck lifestyle.
That was our goal. That was our reason for sticking with it. We didn’t want the paycheck-to-paycheck lifestyle anymore.
For subsequent budgets, our goals have changed. Why? Because our circumstances have changed. Sometimes it’s more about getting money into savings for a big trip we plan to take. Or, it might be that we’ve needed to focus on paying down debt or buffing up that emergency fund. Whatever the reason, though, our goal becomes out motivation and helps us stick to the budget.
Now, I know that it can be tempting to look around at the motivations of others and try to use their goals as our own. Don’t do that. You want to have goals that actually matter to you and your family or they will never work. If I used the same goals that my parents have for their budget, my family would be miserable. Why? Because those goals don’t meet our needs at this point in our lives. Does that make my parents’ goals bad? No. They are exactly the goals THEY NEED to be successful. Choose your own goals, you’ll be happy you did.
So, first and foremost, what is your motivation?
#2: Know Your Limitations
Secondly, if you want to create an ideal family budget you have to know your limitations.
No one wants to talk about limitations. Our society teaches us to think that nothing can hold us back, but the truth of the matter is: our limitations absolutely will hold us back if we don’t acknowledge them. You will encounter limitations within your financial situation and even your life that you will have to make adjustments for. In that case, those “limitations” need to be addressed so that you don’t destroy your entire budget and financial plan.
One good example of a limitation you might encounter is your income:
If you only have $2000 in income coming in every month, there is NO feasible way that you will be able to save $3000 per month. That’s a limitation that you have to be aware of. Now, does that limitation completely prevent you from saving $3000 per month? NO. It just might require you to find another job or income source in order to do so.
The reason it’s so important to consider those limitations is that you need to be able to see success in your budget. If your goal is to save $3000 per month, and you never do that, you’ll be training yourself that a budget “doesn’t work for your family” when, in reality, the goal you’ve set is not feasible with the current income you have coming in. You’ll also be more likely just to save nothing at all because, if you aren’t able to achieve that goal, then why even bother.
When you know that limitation, though, you’ll be able to rework your budget so that your goal is to save $200 each month. Suddenly the money will add up in your savings account and you’ll see the budget as a success. OR you may make adjustments so that you can increase your income each month and then be able to save the $3000.
What limitations do you face when it comes to achieving your financial goals? How will you adjust your budget accordingly?
#3: Have Support
The final piece in the puzzle of creating the ideal family budget is to have support. You might think about it as an accountability group or a friend or family member that you can check in with periodically, and those are great ideas, but you need the support of your family first.
Your Spouse
Nothing in your family budget will be successful if you and your spouse or significant other don’t agree on it. If you are trying to save every penny and he is trying to spend it all, your budget will fail and you’ll find yourself in a state of frustration.
Make sure that you take the time to go over the budget with your spouse each month or, at the very least, when you are first starting. This allows you to come up with goals together that you are both excited about achieving. You’ll also be able to discuss any upcoming or unusual expenses and you might find that you each have things that you are willing to sacrifice to get to that goal more quickly.
Trust me, when you are on the same page, it’ll make your budget and your life so much simpler.
Your Kids
Involve your kids in the family finances? Absolutely. This is a big deal for many reasons.
First, your kids need to recognize that they contribute to the household. They might do so by completing chores, cooking a meal, or in another way you’ve deemed fit, but they need to know that contribution matters. When you can discuss your family’s financial goals with them, suddenly they have more buy-in. Most kids want to see you achieve success and you might even find them running in your direction with their piggy bank in hand so they can contribute even more!
At one point in our budgeting journey, we decided to cut our cleaning services to save several hundred dollars each month. Suddenly, it was up to the entire family to keep our home to the standard we’d become used to. We split the house into “zones” and everyone took responsibility for maintaining their own.
Additionally, to make our goal, we worked together as a family to make sure we only spent what was necessary on groceries and other miscellaneous items.
Was there some griping and groaning? You bet. But, ultimately, our entire family was excited that we could use the saved money to purchase a camper that would allow us to take off across the United States.
So, if you want to create an ideal family budget, make sure you have the support and involvement of your family.
Your Ideal Family Budget
Coming up with an ideal family budget isn’t just about the numbers. Sure, you’ll have to crunch those as well, and we will definitely dig deeper into that in the future, but by laying this foundation beforehand, you’ll be much more likely to find long-term success.
So, take the time to:
- Know your motivation
- Know your limitations
- Embrace your entire family’s involvement
And if you have questions or are struggling with a specific piece of this, head over to lemonblessings.com/question and let me know. I’d love to be able to answer your specific questions and encourage you as you move through this process from rock bottom to financial freedom.
Whatever you decide, know that I’m cheering you on!
Have an amazing day and I’ll chat with you again next time.
