Making a budget (and actually sticking to it) can mean the difference between financial success and failure. People who spend according to what their budgets will allow, usually find that they can meet their financial goals and avoid debt much more easily than people who don’t keep track of their money. Sticking to a budget will also teach your children the importance of financial responsibility.
Making a Budget
Making a budget isn’t hard, but it will require time and dedication. Start by keeping track of every expense, including small purchases that only cost a couple dollars. This will give you a better idea of your current spending habits. That’s the first step to making a budget that will work for you.
Now you have to create a budget that will transform your spending and focus on specific goals. A budget planner can make this much easier. Many experts agree that 60 percent of your income should go towards essential expenses such as housing, food and clothing. You should then budget ten percent of your income to savings, ten percent to paying off debts, ten percent to short-term savings and ten percent to extraneous, fun expenses. This will help ensure that you have enough money to meet your current financial obligations while you prepare for the future.
Getting the Kids Involved
This is an excellent opportunity for you to teach your kids about financial responsibility. Get them involved in the whole process so that they fully understand how budgets work. You can also get them involved in finding places to cut expenses. When you show them that the family only has a limited amount of money to spend each month, you can get them interested in saving money instead of spending it. This not only helps you meet your current budgeting goals, but also encourages them to learn smart habits that will assist them throughout their lives.