How to Arrive at a Sensible Family Budget
Arriving at a sensible family budget is not always easy. However, it is a more preferred option than getting into debt or simply living from paycheck to paycheck. The task of budgeting in a family may be assigned to a specific family member but this does not mean that he or she is the only one responsible for making it work.
What is Budget?
Personal or family budget is a financial plan that seeks to match income with expenses with the intent of making ends meet or better yet produce surplus in the form of savings and investment. It is actually a very simple tool of providing a clear path to follow in monitoring where money inflow goes to. A budget makes it possible for individuals, families, and businesses to make sound fiscal decisions.
The existence of a well thought-of and sensible family budget makes it easier for families to live within their means. With every income and expense accounted for, it would be easy to see if there is any amount left to be used for non-essential wants. Obviously, where there is no surplus, families will have to postpone getting these non-essentials until such time that the budget would allow it.
Needs vs Wants
It is said that when one knows how to distinguish between needs and wants, he or she is able to spend less. Needs are made up of four basic things – food, clothing, shelter, and medical care. All the other things are technically wants.
So technically speaking, when everything is down to bare basics, these four are what are needed to survive. Mere survival however is not the object of human living. Therefore, it is necessary to incorporate certain wants to make life more fruitful. The most justifiable want is probably education since it is generally needed to obtain gainful employment. Others like recreation, travel, and a car may have to wait further down the line until such time that they can clearly be afforded.
Qualifying Needs and Wants
There is a need to qualify needs and wants specifically as to their nature. Which is a more justifiable expense – occasional family eat-out or branded clothes, a family car or a vacation house, master’s degree program or aesthetic surgery, a yearly family vacation or frequent dining in fancy restaurants? Clearly, the basic necessities in their non-essential levels can become secondary to important wants. It all boils down to the purpose and the beneficiary/ies of the expense.
The more people that can derive good from the expense, the more justifiable it becomes. The more an expense can ensure improvement of over-all family condition, the more efforts can be exerted in ensuring that the budget will make room for it. This then brings us to the main concern of coming up with a sensible family budget that will consider the particular circumstances of a family.
How to Budget
There is not one specific budget style that will work for all families. The differences in the amount of income and the possible expenses between make it impossible. However, the general rule is always not to spend beyond what one earns. This is fairly simple to understand because going against such rule will surely result to deficit.
A family budget needs to written. It cannot be done by memory since there will always be a tendency to overspend when one or two important expense items are forgotten and the intended earmarked amount is spent on other unplanned things. There is no question about setting aside specific amounts for essential expenses such as mortgage/rent, tuition fee, utilities, insurance, gasoline and groceries, among others. Families will have to think twice or many times over though for non-essential purchases.
My Say
Parents typically take the lead in budget management. It is wise however, to involve older children in decision-making specifically in matters that involve them. Family members need to cooperate to make a budget work and this can be achieved if everyone understands that limited resources will have to be allocated properly Families can arrive at a sensible family budget with honest assessment and some serious pencil-pushing.
Marie
I am really bad when it comes to budgeting 🙁 This is why I see to it that I earn more than spend. Stretching the family budget (for me) still needs everyday training. Thank you for the helpful input!
Teresa Martinez
Budgeting is an everyday challenge we need to face.
Gab
Thanks for this tips… i need it now specially that me and my dad is the one who’s in charge in budgeting because my mom got stroke early this month.
Teresa Martinez
I hope your mother gets well although I’m sure you and your father will find your way since necessity makes us able to do what we initially think we are not able to do.
Emily
Qualifying needs vs wants. This is something that I need to learn..My budgeting skill is a total mess and more often we end up spending more than what we earn..I am not getting any younger and we need to save up for the kids’ education…
Teresa Martinez
Most of us are guilty of that at some point.
Ane
I find it super difficult to stick to a budget. 😛 There is a fine line between wants and needs and sometimes I feel that my wants are my needs. 😀 hehehe
Great tips for anyone who wants to learn how to budget, it certainly was a very insightful read for me. 🙂
Teresa Martinez
Thanks, I’m glad you found it useful.
I Love Keisha
Everyone should have a voice on the budget. Though, our kids don’t exactly know how this is done, they should clearly understand that in a monthly income there should be a portion for savings. And, quantifying the needs and wants is one important thing for them to learn.
Teresa Martinez
Kids should be taught in the rudiments of budgeting as they grow up.
Adin Blankenship
I do agree! Gotta make sure to budget everything and think when buying things. Is it something that I need or just wants. Especially in our household where my husband is the only one working. Oh dear! Coupons are helpful as well in saving some money.
Teresa Martinez
Budgeting is really quite a challenge.
Mary Anne Vinzon
Budgeting is a hard thing to do especially for moms who tried to accommodate their income towards expenses .You need to spend money wisely.Focus on needs rather than wants.
Teresa Martinez
Budgeting is such a tightrope for many of us.
rocky
thanks for sharing and very informative article!
Teresa Martinez
Thanks, I’m glad you found it informative.
Momgen Reviews
It is very true in this kind of economy we need to have a budget plan. But sometimes we over spend in a not so important stuffs hehhe.
Teresa Martinez
It is true. Sometimes the things we see in stores really test our resolve to stick with the budget.
peachkins
It’s hard to stick to a budget but once you make it work then you’ll be okay and you’ll get to put up savings
Teresa Martinez
Practice makes perfect. IF we do it consistently enough, we might just succeed.
Gven-Rose
I also need to save seriously..I might to know about balancing….:)
Teresa Martinez
We can all benefit from having our own savings scheme.
jheylo
well said and i couldn’t agree more. budgeting is a must especially when we are living paychecks to paychecks. we don’t want to get in so much debt right? better yet consider needs more than wants because it’s for our own good anyway.
Teresa Martinez
Debt is such a headache especially when it has gone over our heads.
Tess Chancellor
Budgeting is really mothers long term business. We have to live up to our paycheck or else you will be in trouble .I learn how to budget as a child. My parents were poor so each of us learned that every penny is important for the family. And now that i ma married ,hubby is all praise on my budgeting.
Teresa Martinez
We learn important lessons that stick with us all throughout life.
Chubskulit Rose
That’s my job in our home. Hubby is a spender and I am saver so I constantly say “NO” to the ones that he wants to buy but we certainly don’t need. Jotting down all the expenses and allocating the money available is a great advantage to not over spending and getting into debt.
Teresa Martinez
You’ve got quite a difficult role there.
Ane
I can never stick to a budget, which is why I always make sure I only bring enough money for whatever it is I need for that specific day, because if I bring more, I tend to spend more than enough. I find it hard to draw the line between what my wants and what my needs are, to me, they’re one and the same. 😛 LOL. 😀 The husband is in charge of the family finances, he keeps me aware, but I don’t handle it, because if I did, we’d be bankrupt by now. 😛 hehe
Really useful article for people who want to learn how to successfully create and stick to a budget. 🙂
Mel Cole
i am so bad about this. my husband is the one who keeps the budget record though. must keep my own budget recorded too.
Teresa Martinez
Yes, we can benefit from taking the cue from savers.
nomer
It is indeed important to balance the needs and wants in budgeting. Overemphasizing needs could make life boring; overspending on wants will get us nowhere. Balance is key 😀
Teresa Martinez
You are quite right when you say that balance is the key. This is almost always the case in everything we need to do.