Creating a family budget prevents stress and makes it easier for families to communicate and function effectively, according to the University of Missouri Extension, but only one in five remarried couples discuss finances befor marriage. To make a family budget, identify how much money is coming in from all sources, including paychecks, business income, rent, pensions, Social Security and unemployment, and how much money must go out in the form of bills and expenses.
Step 1
Communicate about finances. Talk about your money experiences and how you feel about debt. Decide who will earn money and contribute to financial decisions in the family. Discuss who will be responsible for paying bills and organizing financial records, and who will handle children's expenses. Finally, consider your family's long-term saving and spending goals, such as retirement or college savings.
Step 2
Track what you spend. Use a notebook or money management software such as Quicken to keep track of how much each member of your family spends every day. Noting your expenses on paper or the computer helps you control your spending but also helps you make next month's budget more accurate because it removes the guesswork of financial planning.
Step 3
Manage credit carefully. Purchasing items on credit now will delay other saving and spending goals you might have in the future, according to the University of Missouri Extension. Keep your family budget in check by using the 20/10 rule. Limit your consumer debt on credit cards and department store cards to no more than 20 percent of your annual after-tax income. Limit your monthly credit payments to 10 percent of your monthly after-tax income.
Step 4
Choose budget-friendly family activities. The Cooperative Extension System recommends families seek out local public resources, such as parks, community festivals, libraries, museums and concerts instead of more expensive trips to the movies or theme park. Make at-home game nights a regular part of your family schedule, rent movies, or bake and cook together as a family. Teach your children a valuable money-saving skill, such as gardening, sewing or woodworking.
Step 5
Ask teens to contribute during tough times. For families whose budget is cut to the bone, have adolescents complete tasks you'd normally hire someone else to do, such as babysitting, lawn care, painting and cleaning, according to the Cooperative Extension System. Enlist teens to conserve costly resources at home by turning off electronic devices and taking shorter showers. Encourage teens who work to develop their own budgets to pay for trips, cars and entertainment.
Things You'll Need
- Paycheck stubs, pension or Social Security statements, and other proof of income
- Receipts, bills and other records of expenses
- Paper and pencil or money management software
References
- University of Missouri Extension: Financial Decision Making in Stepfamilies
- University of Missouri Extension: Managing Your Finances
- University of Missouri Extension: Credit in the Family Budget
- Cooperative Extension System: Doing Things as a Family for Less
- Cooperative Extension System: How to Contribute to Family Needs During Tough Times
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