What Goes into a Family Budget?

Having a well-thought-out budget that your family understands and abides by is an incredibly important way to manage your household finances. On top of all the stresses of maintaining a family, it can feel nearly impossible to take care of a budget, too. You want to be able to create a realistic budget that will guide your family to your financial goals and won’t be too difficult to maintain should life throw you any unexpected emergency expenses. Read on to learn about what you need to consider when preparing a family budget.

Expenses

Depending on the size of your family and the number of people who are working and contributing to your household, the way your expenses are distributed will vary. Still, there are some common areas where a family’s budget will go: gas, rent/mortgage, phone, water, electricity, food, and loan repayment. Sometimes life throws you unexpected expenses and you’ll find yourself looking for how to borrow money fast to cover an emergency cost like a broken-down car or healthcare costs. 

Short-term loans from GoDay can be just the thing you need to handle a sudden, unplanned expense that might have caught you off guard. Knowing your expenses, however, and allotting space for extras is the first step in setting up your family budget to help you stay on track with your bill payments so you can avoid payday loans unless absolutely needed. 

Planning

Think of your family budget like a plan or roadmap to get you to your financial goals. You’ll have long-term plans and short-term plans to consider and that might look like a debt recovery plan (long-term) or saving up for a new appliance (short-term). Take the concept of planning into every aspect of your financial life: plan a day for paying your bills, plan out how much money will go on a credit card, how much petty cash you need for minor expenses, and plan out family meetings where you can go over the important elements of a budget. 

Budgeting Guidelines

There are no hard and fast rules when it comes to deciding how much of one’s income should go towards home, vehicle, food, entertainment, clothing, you name it. But for those who are looking to put together a tight budget with the goal of putting away savings or paying off debt, there are some guidelines (in percentage of income) that you can follow when outlining your expenses.

  • Housing: 35%
  • Transportation: 15-20%
  • Food: 10-20%
  • Medical: 3%
  • Debt: 5-15%
  • Savings: 5-10%
  • Utilities: 5%
  • Personal: 5-10%

These are guidelines for someone looking to stick to a tight budget, so you can be more lenient in areas depending on your personal financial situation. Ultimately, however, you should be sure to do two important things: 1) not spend more than you earn, and 2) have a dedicated amount of your income that goes towards savings. 

Teamwork

The team effort of the entire family can make or break a budget. If everyone commits to sticking to the plan and contributing as the budget dictates, you’ll start to see strides in your financial planning. Because teamwork can be so make or break, it can also be wise to reach out to other moms who seem to have a handle on their budgets. Seeking some financial counselling or even a community course on savings can also give you the educational tools you might have been missing for laying out (and sticking to) a successful family budget. 

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