It  is mostly a money crunch or crisis situation that make us lean towards budgeting more. Handling a money crisis well and realizing that family budgeting is but one pieces of that puzzle, might be helpful. The expectations, problems faced, context and depth of the crisis, is as important as the steps, procedures, techniques, tools and budget worksheets you end up using.

Admitting that there is a problem is normally considered a good first step. Asking for help is a close second. Money-matters makes us do strange things. You are probably not the only one facing this situation. Therefore, take heart there is help out there. Even before getting to the how to steps for your own budget, work on your state of mind, immediate needs, concerns, dues and crisis. Consult a professional financial planner, who will assist you, in all likelihood, through and financial analysis of your situation, assembling facts and information, coming up with solutions, suggestions and alternatives you probably are not thinking of right now. Even when not under pressure or in crisis, when setting up a family budget, gather your thought, emotions, data, receipts, statements, input from others, discuss, consult, assemble, synergize and prepare to succeed. Get the most appropriate, accurate information you possibly can before setting up any expense categories or filling out worksheets. Get and extra set of eyes to look it over, you will not regret it.

Sober,  even-keel, un-emotional, rational, clear-minded,  level-headed and ready to take on any challenge - include setting up a personal and family budget, income,  expense statements,  asset-liability summaries, expense categories, line items, amounts, estimates and more. Committed to succeed, with a positive attitude and financial resourcefulness will serve you well in any situation, no matter what the money crunch or reason for your budgeting need may possibly be. 

Take responsibility and have realistic expectations.

Take some risks when required. Be pro-active and explore your options. Do not hesitate to tackle controversial topics or expenditures, even if it can lead to conflict and disagreement. Couples and finances have always caused some difficulty, so it is all normal. Stabilize your situation, salvage what you can and move on, focus forward. Family budgeting has the past, present, future continuum all covered.

Someone suggested that there are eleven steps in  any new money management endeavor you undertake where personal interest and stake is high:

Step One: Change Your Expectations and be Realistic

Step Two: Tell Yourself the Truth – Face the Music

Step Three: Decide How to Pay for Necessities – Stop-gap Solutions

Step Four: Identify Your Assets – all of them! They are there, we just need to go find them

Step Five: Discover How Much You Cost – this is how much you spend and your contribution to situation and circumstances

Step Six: Calculate What You Can afford to Cost – cost cutting and balancing your budget.

Step Seven: Call Your Creditors – dealing with debt

Step Eight: Quit Paying Late Fees – work with professionals

Step Nine: Create a Family Budget

Step Ten: Do Not Ignore The Following: IRS, Parking Tickets, Association fees, Car payment, Immigration and other government affiliates that need to be pulled into your situation to assist you as best they can

Step Eleven: Manage Your Money Every Day

It is no surprise then, to even find the ever-popular ‘budgeting’ concept among these listed must do’s to re-collect, re-orient and return to fiscal freedom and avert further money-related crises!

HOW SHOULD A FAMILY BUDGET BE USED

This question immediately suggests that it should be part of the whole family budgeting process. It is much part of the learning around setting it up, considering its usefulness, function and purpose.

Creating or setting up the budget is one thing. Sticking to it, effectively implementing, sustaining and  if actual fact, in essence ‘using’ it is the ultimate goal and achievement. That is worth celebrating. Families have different ways again to use or refer to their family budgets.

For some it will be no more than a general guideline. For others it would constitute an absolute rule not to be bent or broken. Others still will use the family budget as a strategic planning tool to protect the interests of his/her family and plan for a full and happy life, setting a small amount aside for the future, invested smartly and securely, with confidence and pride.

The very day the family budget actually assists you in reducing your spending and making informed smart financial decisions that is the day you do not sit back and relax, but throw all your energy back in making it even better. This is an on-going, continuous improvement exercise, experiment and undertaking of your own making, design and creation!

The family budget can:

Assist you in handling unforeseen increases in costs and unbudgeted expenses

It is very common to get discouraged when on the family budgeting path. The minute you feel you have taken strides forward, something will happen, a setback, unexpected upset or expense, breakdown, maintenance or replacement or car, appliance, major purchase or repair and many other setbacks will occur.

In a sense it makes families more robust, responsive and adaptable. Tracking your finances makes you aware of patterns and business cycles, cost and many other factors that affect hearth and home financial life and health.  Rent increases, more expensive cigarettes or tax increases, higher gas or energy prices or increased mileage to and from work are but a few examples of these events and issues that might come up.

When faced with these challenges, problems or complexities, having your fingers on the pulse of your available resources, discretionary monies, savings, line of credit, rates, banking fees and more, will all help you make the right informed decision that is best for your family, at that time and act accordingly with diligence and confidence. You are in control of your financial situation and not the other way around. It enlightens and  empowers you to do more with less!

Unpredictable pricing and fluctuating expense are not easy to reduce in any budget. Having this variation handy, spread over a period of time, can help you plan better and anticipate sudden spikes or higher expenditure during certain months of the year.

For example, the telephone bill is higher when the teenagers are home for the summer.   Emergency, contingency and improvements are not priorities for most of us when we receive our paycheck. To ensure a steady stream of income into these categories make “saving for a rainy day” come to life and have some real impact and meaning in our financial planning.

Cutting non-essentials first is a good strategy. Alcohol, long distance phone calls, gifts, gardening and landscaping services, decorating costs, pet care needs, recreation and lottery tickets can all be good money-saving categories. The more line items you can include, in your cost reduction, the smaller the dollar-amount impact in each.

It should come as not surprise that by just cutting a little in each of these categories, families can easily save upwards of $240 per year without too much noticeable difference in their lifestyle or any major disruptions or sacrifices. If is less than1 % of your total spending, it should not really cause pain, grief or reason for worry.

Family budgets can also provide hints on how to save on non-essentials: Buying more or less of a product or service, comparison shopping for the lowers possible price, bulk and discount, sale, buying a lower-priced or no-name brand. Eliminating some gift giving (Christmas, birthdays, friends and family) is a way to save money.

Elimination of waste is another clever way to save money that is often overlooked, BUT not in the family budget. Thrown out food because too much was purchased or it spoils because at time of purchase it was not as fresh as it could have been. Spur-of-the-moment clothing purchases, too trendy, uncomfortable and not the right size perhaps?

Making an active effort to participate in the family budgeting process will carry its own rewards as well. Self-discipline and curbing your own spending will soon become second nature almost.