Creating a household budget for the family
By: nicole
Once I’d decided against returning to work after maternity leave with our second child, my husband and I sat down and created our first serious household family budget. I can still remember the sickening feeling in my stomach when we ran the first set of numbers; based on our current spending it was forecasting over $10k in debt!
It was a massive wake-up call that if our spending – well, to be honest, my spending – continued, it was going to put us under significant financial pressure.
So how did we turn this around?
Tracking expenditure
We went back over all our anticipated expenditures and worked out what we could cut. We managed to get the budget to balance, but balancing it on a spreadsheet was one thing – we needed to be able to balance it in real life. The only way was to begin tracking our actual expenditure so we could see if we were meeting our budget.
We had three broad categories we tracked:
– groceries
– clothing
– miscellaneous
We used a notebook to enter our spending in each category and each had an individual budget allocation. Once we made it to the end of the week it was easy to see if we had made budget and if not, where we had spent too much.
If you have never tracked your spending before you really should give it a go, even if it is just for a month. It is amazing how much a coffee here or there adds up and sends your family budget into the red.
We now have a more sophisticated way of tracking our expenditure using Google Docs. My husband and I can both enter our expenditure into a shared spreadsheet online. Having the figures updated immediately gives me an instant picture of how we are traveling according to the household budget. Here’s a template of the spreadsheet (with instructions) to download on Google Docs.
Changing spending habits
Tracking your expenditure really works in helping keep the family budget balanced. Information is a powerful thing! When I am entering my expenditure for the day, if I can see we are over budget by $450 then I will change the way I am spending. For example, when I do the next monthly menu plan, my focus will be on low-cost meals. The lamb roasts will go and we will have a family meat pie instead.
Over the years we have changed the way we spend, shopping smarter and looking for creative ways we can save on groceries to balance the budget, like:
Shopping monthly online – it is much easier to monitor how much you spend and it is easier to compare prices. Doing large, less-frequent shops also means fewer impulse buys that happen when you visit the supermarket frequently.
Markets – my husband gets up early every Saturday morning to head to a nearby fruit and veg market. Even if you factor in the extra petrol, we come out at least $30 a week better off from shopping at the market.
Needs versus Wants
We have a very comfortable life; in reality we have everything we need and much more. It can be easy to fall into the trap of confusing “wanting” and “needing”. Sure I want new blinds in our family room, but we don’t need them… the ugly ones do the required job! Discussing these sorts of spending choices with the kids is also something we do. It can be easy for kids to think as adults we just buy what ever we want. We talk to the kids about the fact we have a household family budget and how we consider our purchases to make sure we stick to it. It’s important to start these discussions early, so we can teach the kids the value of money and the importance of spending within our means.
Do you have a household budget and if so, how do you make sure you stick to it?
nicole
Nicole is the mother to five gorgeous children aged from 11 to 1. She is slightly obsessed with to-do lists, spreadsheets, music and playing with her kids. You can also find her blogging at Planning With Kids, where she shares ideas to help put organisation into the happy chaos that is a family with young children.
Showing 1 comments
I am trying to set up a budget, and I know that the hardest part will be to get my husband to a) recognize his spending and b) adhere to any limitations. I am going to set up something on google docs for him to enter spending on so I can update once a week in MS Money, but getting him to do this is going to be a challenge.