We chose to take a very practical approach to fiscal management and get you started, walking through the budgeting steps on-course to solid budgeting in your family and household.
This brings us to the Who, What, When, Where, Why and How part. These form the dynamic, interacting and inter-dependent elements, systems and processes that form “family budgeting.”
Who? Every family situation is uniquely different. There is no one-size-fits-all answer and solution for everyone.
Some of the tips in this guide might apply to your unique means and circumstance, and others may not have any significant impact or practical application at all.
In general terms, you will find handy ideas, hints, process steps, practical savings suggestions and budgeting that might have gone unnoticed before.
The information provided is general and should be evaluated on an individual and contextualized basis.
Remember to consult a financial advisor when making fiscal decisions that could affect the financial health, well-being and future of you and your treasured family.
There are various different families in question here too: single-income, single-parent, blended and/or extended families, double-income households, stay-at-home mothers working part-time from the home to make ends meet, social-supported and/or subsidized families, families at risk, divorced household with shared parenting and financial responsibilities, debt-ridden or bankruptcy families and numerous others. We hope to offer something for everyone.
What? Family budgeting is a structured process and planning activity, dealing with a family’s financial resources and context.
Some of the categories could be:
Obligations. List each item under headings like: home: mortgage or rent; association fees and professional
dues; insurance: health, auto, home, renters’ and life; tuition, day care; loans: car loan, student loan, bank
fees and interest; taxes, property taxes and so on.
Necessities. Once again, list each item under headings like : food, groceries, gas, yard
maintenance, security, pest control, utilities: gas, water, electric, garbage, sewer; school lunches, household
supplies, car maintenance, monthly parking, housekeeper, household repairs, internet service, dry cleaning,
cable TV and more.
Pocket Expenses. Treat this as a whole category, covering: lunch at work, snacks, sodas, coffee,
drinks, parking, tolls, newspapers, magazines, batteries, postage, shipping, mail ...
Family Allowances. Another whole category including items like : parties, entertainment, weekend
outing, movies, concerts, other entertainment and events, home improvements and decorating, magazine and other
subscriptions, dining out and fast food, furniture.
Personal allowances. Clothing, hobbies, personal recreation, books, CD’s, manicures, hair,
alterations, shoe repair, personal gifts, luggage, night out with friends, gardening, films, processing, video
rentals, sports/recreation, family gifts, contributions, donations, computer software and other related
When and Where? In the interest of brevity, we combine the next two facets. Our best assessment to answering
when and where the best place and time would be to start a family budget would be to answer unequivocally:
Here and now!
It demands attention as it directly affects our daily lives and well-being. Without delay, hesitation or
postponement, we need to step up and protect our family interest, financial health and future.
Accounting brings accountability! A wealth management guru is often quoted. This rings so true. It's hard to
ignore, if we are confronted with objective cold hard financial facts that tell us that we are in trouble.
Why budget? Families, as mentioned before, have diverse motivations for budgeting. Briefly summarized, people
budget for these reasons:
To gain control of their financial life, monthly bills, spending
Be prepared and avoid surprises
Save for a major purchase
Opt out of a vicious circle of ever-spiraling debt or spend-now-pay-later thinking
Expand their lifestyle(s)
Eliminate money as a source of tension and topic for argument
Rediscover that the best things in life are FREE!
Becoming self-reliant, empowered to know that debt does not rule their lives anymore!