Have you created (and just importantly maintain) a family budget?
If not it may be that you don't believe you need one.
Or that budgeting is boring and that maintaining the budget is tedious
My view is that every family would benefit from creating and running a family budget as a budget is really just a way to take control of your finances and keep control of them.
It does not necessarily mean you can't ever spend your money on what you want; it just means that you spend your money smarter. In fact, if you are always denying yourself and never buying anything you want for fear you can't afford it, a budget could be liberating.
Dealing with real numbers tends to be a lot less stressful than dealing with vague impressions of your income and expenses.
As I said up top, all families would benefit from creating a family budget, but the families that would benefit most are those families whose finances are either out of control, or on the brink of being out of control.
So here are some signs that you may need to create a budget for your family ...
Answer "yes" to three or four of these and I can guarantee you will see the benefits
1. Your credit cards are never paid off.
If you use credit cards then the sensible way to use them is to pay off the balance off at the end of each month
But what if you are only getting by paying off the minimum each month?
Or if you are using one credit card to pay off another?
Or your credit cards are constantly maxed out?
A budget will help you put this into context so you can make sensible decisions about where your money is spent
2. Money just slips through your fingers
Do you feel like you have money for a moment or two, then it's gone?
Do you know how much you spend on lunch every month?
Or those "essential" coffees from Starbucks which help you through the day?
Budgeting does not necessarily mean that you cut out those coffees - rather it provides a framework for you to make a decision on whether you can afford those coffees - and how many!
If money just slips through your fingers you may have too many expenses, or that you are too quick to spend on wants rather than needs.
3. You don't put any money into savings
.....or you are random about how much and when you put money into savings.
Having a savings plan is an important aspect of financial management.
If you don't have any regimented plan for putting money into savings - say the first 5-10% of your net income always going to savings, or all bonuses from your workplace going straight to savings - then you will just keep prioritizing the things you want
And there is nothing more satisfying than saving for something you really want and paying for it outright without resorting to finance or credit cards
4. You don't have an emergency fund
If you don't have an emergency fund, it may be a sign that you need a budget.
A good family budget can help you make the creation of an emergency fund (to cover life's unexpected events such as the roof leaking or the washing machine breaking down) more straightforward
It will also help you make sensible decisions as to whether certain "emergencies" are best covered by insurances or warranties
5. You're always saying, "I can't afford it."
Do friends ask you to go out to lunch, or to an event, and you say you "can't afford it" all the time?
Or do you constantly tell the kids "I can't afford it" when you should be ideally telling them "it's in the budget" or "I'll include it in next months budget"
It may be true - maybe you can't afford what's being asked - but without a budget you can't really be sure
Creating a budget will help you know what you really can and can't afford.
6. You never seem to have enough.
Money can be deceptive - what seems like "plenty" can suddenly be not enough.
Forming a budget can help you get a grip on what you really have; you may be pleasantly surprised that you do actually have enough, or that it's feasible for you to make some strategic cuts so that you will have enough.
7. You struggle to maintain your house
If there is maintenance required on your house and you can't afford to get it carried out, then you've probably not prioritized the cost of maintenance.
Include maintenance in your budget and try and get a little performed each month, thereby spreading out the cost.
Or alternatively build up a "maintenance fund" by allocating a section of it to your earnings and then get all your maintenance done at once
8. Your finances keep you awake at night
If your finances do genuinely keep you awake at night then it is much better to face them head on and start up a budget for your family
You may not like what comes out, but at least you will be able to start to make decisions about what is and what isn't possible, what you may have to cut and what you can genuinely afford
9. You are getting phone calls & letters
If you are constantly getting phonecalls and letters from your creditors demanding payment then you definitely need a budget
A budget will help the conversation with your creditors by putting into context all your spending and allowing you to have a sensible conversation as to what you can afford to pay that particular creditor
Most creditors would rather see a regular payment of "something" rather than nothing and would actually encourage you to make sure that you can pay for your essentials - mortgage, utilities etc first
10. Your kids are a drain on finances
If you are constantly paying out money for your kids and your kids activities without any real appreciation as to how that money is adding up then you need a budget
A budget will help you see where your money is going, and will also help you to explain to your kids what you can and what you cannot afford
It will also help you educate your kids into sound money management practices which they can take forward in their lives
When they are older it may also encourage them to get a job of their own so they can genuinely spend their own money and create their own budget, lessening the burden on you
11. You are always arguing about money
If you are always arguing about money then chances are that one or both of you don't have the full financial picture
Putting together a budget will tease out everything and facilitate making informed decisions from a point of knowledge and should prompt an action plan if things don't balance.
You may still end up arguing about money but it will be from an informed viewpoint rather than a lack of knowledge
12. You never talk about money
Or it may be that you never talk about money - and possibly have your head in the sand as to your financial situation
Creating a budget may be painful at first but will start to tease out what may be wrong and allow those conversations to happen
13. One "major" event could have devastating consequences
And finally, if you are in a position where one major event could have devastating consequences then you could really do with creating a budget to go someway towards catering for that event
And it may not be anything really major - perhaps repairs on the car (which is essential for work) may prevent you paying the mortgage next month...
A budget will help you make sound financial decisions to help build your emergency fund so you can cater for such events
[thrive_text_block color="blue" headline="In Summary ..... "] A budget won't necessarily be the answer to all your financial issues or woes but what it will do is to get everything out on paper, allow you to start making financial decisions to secure your long term future, and to start identifying areas where you may need to cut back on your spending.
Of course a budget in itself is only partially effective - you need to maintain your budget month to month - but for now, I would highly recommend getting out that piece of paper and a pen, or your favorite spreadsheet tool (you don't need any fancy tools to get started) and get that budget down on paper
Still not convinced?
Read about the benefits of starting a budget here