Introduction to Family Budgeting

Track your spending and develop a household budget

Nov 14, 2006 Judith Zwolak

Budgeting is not a four-letter word. Start monitoring your expenses and get your family on the path to financial health.

Do you know where your paycheck goes? If not, it’s time to start budgeting. Keeping track of your own expenses is daunting enough, monitoring the spending of an entire family takes even extra effort and commitment. If you start small and involve everyone in the process, you will be on your way to a working family budget, and a plan for your financial future.

Start with dining out and groceries Take budgeting baby steps and start by tracking your grocery and food budget for a month, including restaurant meals, coffee shop treats and vending machine snacking. Keep all receipts and write down what you spent for an entire month. You may be surprised how quickly the Chinese restaurant deliveries and extra bag of potato chips add up. When the month is over, you have already tracked a major category of your household budget—congratulations!

Now set up more categories Some expenditures vary little from month to month, such as housing (mortgage or rent), utility bills, insurance, daycare. Others can fluctuate—entertainment, travel, home improvement, auto repair. Devise some basic categories, adding or combining categories after you have a few months of budgeting under your belt. Get your partner involved in the process. If he or she doesn’t want to take part in the recording or analyzing, at least make sure you get receipts for any purchases your partner makes.

Invest in a budget software program Microsoft Money and Quicken are the big names in personal budgeting software. Both are easy to use and generate numerous useful reports and forecasts. The programs help you organized your budget and make tasks like tax preparation a breeze.

Include the kids Give a small portion of your budget to your kids to control and they’ll learn the basics of earning and spending wisely while they’re young. The snack food or dining-out portion of your budget is a good place to start your pint-sized financial planner. When junior sees how much two pizzas, four sodas and a round of ice cream sundaes takes out of the monthly allotment, he may even stop begging to eat out every Friday night.

Analyze, cut fluff and get saving Look at your spending habits with a critical eye and cut where you can if you have debt or you’re not putting enough away for savings. Better yet, include a monthly savings goal in your budget and have that amount automatically withdrawn from your paycheck and deposited in an account.

Make it easy and keep at it Don’t get too fancy with your budget categories; the hassle of deciding where a particular expenditure fits may prevent you from continuing with your record-keeping. Find a central place for receipts and pick a time to do your paperwork. Once or twice a week is fine.

Read more information on household and family budgets at these articles: Envelope Budget System and Family Budgeting with Kids.

The copyright of the article Introduction to Family Budgeting in Family Finances is owned by Judith Zwolak. Permission to republish Introduction to Family Budgeting in print or online must be granted by the author in writing.