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Budgets are hard ya’ll. Do you have one? I would hope so because at this point in our lives most of us are aware that we should have a budget. There is however, a huge difference between knowing you should have a budget (Six Dollar Family) and actually having one that you stick to. Like I said, budgets are hard. Sticking to them is even harder. The entire point of having a family budget is to keep your money from controlling you. Yes, your money can control you. Here’s the thing though. Even if you have a budget, your money can still control you. How? Because you need to have the correct budget for your family. Not everyone can use the same type of budget and if you’re using the wrong one? You need to get to work today on creating a budget that actually works for you.
The biggest thing about it all is that you need to actually recognize when your budget is or isn’t working for you. If your bills are consistently late? Your budget isn’t working. If you’re consistently running out of money each month? Your budget isn’t working. If you’re “robbing Peter to pay Paul,” your budget isn’t working. If you aren’t able to save any money at all each month? Your budget isn’t working. Even if you aren’t sure what reasons are causing your budget to fail, if it is failing? It is failing. Pure and simple, there’s no negotiating it, budget failure is budget failure.
It doesn’t matter what your income is or isn’t. When your budget isn’t working, things need to change. You’re either going to have to earn extra money which isn’t always an option or you’re going to have to make some serious lifestyle changes. You may need to change the type of budget you’re using. You may need to break habits that are causing you to be broke. You may need to look at your income in a different way. It may be as simple as changing the way you look at your savings account or changing how you think about building wealth. In almost all homes where there is a financial failure, changes need to be made.
Creating a Family Budget that Actually Works for You
The next thing that you’ll need to do is to find your budget. I don’t care what type of budget you use and I’m not going to try and sell you on one versus the other. Honestly? I’m a pretty big budget snob. I don’t use a single budgeting (Six Dollar Family) software because none of them provide all of the features I want. Instead, I use a custom budgeting spreadsheet that I built myself. It took me four years to figure out that I needed to do that. Four years of my budget not working is four years of wasted money (Six Dollar Family), wasted savings and wasted time. All I care about it making sure that you don’t repeat that same mistake.
As far as budgets go, you’ll need to figure out exactly what features you want yours to have before you ever write a single number down. Do you want your budget categories to have subcategories or will the main expenses you have work for you? Do you need a savings tracker with your budget? Is automatic calculations something you need or are you fine doing the math yourself? Take some time and research different budget software options. You may get luckier than I did and find one that works for you. If not, don’t be afraid to create your own budget using pen and paper, a spreadsheet or even a simple Word document. A few good options to check out are Mint.com, You Need a Budget (YNAB), and EveryDollar. Two of the three listed are free and one is $5.00/mo or $54/year.
Once you’ve got your budget software figured out, it’s time to redo your family budget. Now listen, don’t just go and put the same expenses in there. Take this time to look for ways to cut your expenses so that you’re saving more money than you were with your last budget. You’ll want to be sure that you’re keeping your eyes out for expenses that you can cut but have gotten used to paying. This could be things like cutting your cable, working at lowering your grocery bill, ending a club or activity for your child that they no longer enjoy, making as many products at home as possible rather than buying them, and more.
Cut your spending back as far as you can. A budget isn’t going to do much except keep your bills paid on time if you’re still wasting hundreds of dollars each month. Not only will it help your build wealth easier, but it will make sure that you’re prepared for any emergencies that may pop up since your savings account will actually have money in it. This, despite the common belief that it’s a secondary benefit, is the main purpose of having a budget. Yes, they keep you on track financially but in the end, a budget helps you build your net worth.
After you’ve identified the areas that you can cut back on, go ahead and plug those numbers back in and zero your budget out. What I mean by this is that you should make it so you have $0.00 left over. No, I don’t mean spend it all. I mean for you to take any money that is left over at the end of the month and put it into your savings account. If you don’t have a savings account, make sure that you get one that will pay you a decent interest rate so that your money grows quicker.
Now here’s the thing. You’re not done. Just because you plugged some numbers into a spreadsheet or software app, doesn’t mean that you’re finished. Your budget needs attended to once a week at the very least. If you’re new to having a budget, make it a daily habit. Update your spending transactions. Update your income. Keep your eyes open for any expenses you can cut again. You might be surprised once you get into the habit of budgeting just how many thing you no longer need or want to spend money on. Give yourself three months on your new budget. If at the end of that three month testing period, you find that this one isn’t really working either? Don’t be afraid to change again. There is absolutely nothing that says that you have to stick with the same budget and there’s nothing that says you can’t change how you manage your own family budget.
Budgeting is extremely personal. What works for you won’t necessarily work for your parents or friends. You need to find a family budget option that works the way that you need it to. Your finances aren’t the same as anyone else’s and because of that, your budget won’t be either. It would be nice if budgets really were one size fits all, but until that day? Work on creating a family budget that works for you and only you.