Variable expensesĪs the name implies, these fluctuate from month to month and can include groceries, utilities, entertainment or class field trips. For example, you may ask, “How much do you think our house costs?” They may not guess anywhere near the correct amount, but the conversation will help build their financial awareness. You can bring the kids into conversations about these types of expenses, Payne suggests. These recur monthly and may include rent, phone bills, daycare or monthly subscriptions. However, since each family is unique, your budget breakdown should reflect that. Your family budget will likely be based on four main categories, which are spelled out below. Remember that you want your budget to fit your family and your specific needs. Begin by sketching out the major categories to be included in your budget. Once you’ve gathered around the table, it’s time to dive in and start planning your family budget. “You shouldn’t necessarily force them to budget their own money, but they’ll at least pick up on the importance of budgeting as it relates to earning income,” she adds. In other words, tell them they won’t receive their allowance unless they participate in the budget meeting. Struggling to convince kids to participate? Smith has an idea: “If it affects their allowance, they’ll get involved,” she says. When planning a family budget, consider having family members leave their smartphones or other devices in another room to keep distractions at bay, Smith suggests. To make your family budget meeting a success, choose a time where no one is stressed or distracted by competing priorities, whether that’s work or after-school sports. Clear away any distractions and offer incentives These everyday interactions get your little ones comfortable with talking about money-laying the groundwork for your family budget meetings. You can even make a game out of it: “For example, if you’re out shopping, make your kids guess the grocery bill amount when checking out,” he suggests. Talking about money doesn’t have to always be serious, Payne says. In fact, a study by Brigham Young University researchers reveals that toddlers and young children are already forming money habits, values and attitudes. Research has shown how important it is to have money conversations with your family. ![]() “That doesn’t mean every money decision is a family decision, but kids feel a sense of ownership and responsibility when you include them in money discussions.”Ĭreating a budget together boosts everyone’s buy-in, which gives your budget real staying power.Īnd everyone truly means everyone-from your little ones just learning their time tables to teens with their own checking accounts and cars. After all, “kids are a part of the family,” Payne says. Planning a family budget should be a family affair. If you’ve already gotten comfortable with how to make a household budget, you might be tempted to take over and do all the heavy lifting yourself. Your next question might be: How do you make a family budget? Smith and Kevin Payne, creator of financial blog Family Money Adventure, provide the following tips to help you plan a family budget: Invite everyone, from toddlers to teens How to make a family budget and stick to it “Planning a family budget with your kids will help them learn the importance of earning money, how to spend it, and what happens when it runs out.” ![]() “While it’s important to start talking about budgets and money with kids, you have to simplify it to a level they’ll understand and won’t be overwhelmed,” she says. For example, it may only include line items that have a direct impact on the kids, as opposed to including every single expense, Smith says. Jen Smith, personal finance writer and creator of Modern Frugality, says a family budget can be a simplified version of what you do when you make your household budget. Importantly, it also reflects your family’s goals and values by how you spend and save. Your plan identifies where and how your money comes and goes by focusing on income and expenses. Here’s how the experts define a family budget: What is a family budget?Ī family budget is a game plan for your family’s money. Instead, a family budget unifies everyone around common goals that are possible to achieve through strategic spending and saving.īefore diving into the details of planning a family budget, let’s start with the basics. It isn’t about pinching pennies or building a bigger bank account balance. You’re probably already familiar with the expenses that make a household budget, but have you thought about building a family budget?Ī family budget can get everyone in your household on the same page when it comes to money. Maybe even cable if you haven’t cut the cord yet.
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