Budgeting for Your Family’s Future

If you feel like your household’s financial situation is out of control, you’re not alone. According to a 2015 report by Pew Research Center, more than 60 percent of Americans consider their financial position to be poor to fair. Interestingly, a 2013 Gallup poll gives a possibly greater indication why: Only one-third of Americans build and maintain a budget.

Budgeting, the act of tracking what you make and what you spend, is a critical component to preparing for the future. When done right, a budget can provide peace, stability and the satisfaction that comes from meeting short-term and long-term goals. All too often, however, couples stop before they start, viewing a budget as restrictive, frustrating and confusing. It needn’t be that way! A budget simply informs people of where their money goes, and that knowledge is essential for building a realistic financial plan for the future. As the old adage says, if you don’t have a goal, you’ll miss it every time. Budgeting, then, establishes a target and guides your aim toward it.

One of the primary reasons couples struggle with budgeting is because they haven’t found a system that works for them. Here are some keys to getting a good budget rolling.

1. Work together. More than likely, one of you loves to crunch numbers while the other couldn’t care less—and you probably don’t even have to consult with each other to figure out who fits which category best! If only one person has a vested interest in financial planning, however, a budget will not operate. Because money comes into a household and out of it together, it also needs to be worked on together as a couple. Conversations about money can get tense easily when there is financial strain, and the tension only compounds when you’re not on the same page regarding how to go about it. Avoiding the subject only prolongs the inevitable. Keeping an open line of communication—and being willing to compromise in order to achieve a goal—not only positively impacts your finances, but also reaps tremendous benefits in a relationship.

1. Work consistently. A budget needs to be viewed as a living, breathing organism. Your financial situation changes over time just as your family situation does, whether it’s the result of irregular cash flow, a change in careers or the addition of a new child. Making a budget once only accounts for your finances in that exact moment. A budget is like a road map that needs to be consulted frequently. Just as detours are provided on a GPS, so couples need to adjust their budget as their finances change. Meeting frequently makes work more efficient and, when coupled with a date night, can be something to look forward to. Michael Gerstman, CEO of Gerstman Financial Group, notes that challenging each other to save a certain amount or hit a certain bank balance has an added benefit: “Once you have a budget in place, some people look at it as a game. Reaching your goals is fun!”

1. Work graciously.  Opposites attract both in relationships and in finances. Perhaps one of you is a spender, while the other is a saver. Or maybe you’re both natural spenders but don’t agree on how the money should be spent. Giving space for your differences can actually help bring you onto the same page. “One of the best pieces of advice we got before marriage was to have an individual allowance,” Amanda Hanigraff, a mom of three and family counselor notes. “Our finances are one, but my husband and I have always had our own discretionary fund each month. When we were young and newly married, we gave each other $10 a month personal spending money, but it’s gone up with our income over the years. This predetermined amount is hands-off. If he wants to spend his allowance on something I don’t care to do, he can do so without my input. Likewise, if I want to buy something that doesn’t appeal to him, I can do so with freedom.”

1. Work long-term. Getting started is always the hardest part, but once you find a system that works for your family, it’s just a matter of keeping it up. Like all good things, a financial plan requires some time and effort, but it needn’t be complicated either. All that’s necessary is a pen, a piece of paper and a calculator. Here are some budgeting tools that can help you stay the course:

            -The Envelope System. This was probably your grandparents’ way of budgeting, and it’s still as good today as it was then. Simply pull cash aside for expenses like groceries, gas or clothing and stick each category in its own envelope for the month. When the money is gone, so is your spending. If you prefer not to carry cash but still like the satisfaction of seeing where your money has gone, you can still use this method. Simply write the name of the month and the amount allocated for the category on the outside of the envelope. Then place receipts in the proper envelope after using your debit or credit card. Lastly, subtract each transaction amount from the total you’ve allocated on the outside of the envelope. Replace your envelope every month.

            -Online Budgeting Tools. Many banks and credit unions offer free budgeting tools or apps that track your spending for you. Check with your banking service to see what options are available to you. Other online budgeting tools, such as You Need a Budget (YNAB), Every Dollar and Mint, offer various free budgeting services (while, for a few dollars more, they will allocate everything for you directly from your bank account).

Quick Tip

One of the biggest non-fixed expenses of a family budget is groceries. Couples can trim the fat by meal planning (avoid making trips to the grocery store hungry and without a plan), couponing or planning around sales, shopping bi-monthly, or buying in bulk. Meal planning not your thing? Consider Emeals, an inexpensive meal planning app that takes all the guesswork out for you. You determine your diet (Keto, gluten free, etc.), choose which store you’d like to purchase from, and they devise a menu option that stays within your budget.

Lauren Greenlee is a homeschooling boy mom and freelance writer hailing from Olathe. Always on the hunt for ways to save money, her favorite resources are Dave Ramsey, Jordan Page and Crystal Paine.