Money is one of the main sources of conflict and one of the biggest stressors within relationships and family dynamics. Of course, money itself isn’t the culprit. The problem usually stems from lacking a solid money management game plan and budgeting tools that work for your unique finances and needs. Let’s look at six budgeting tools you can easily tailor to your situation to make money management as devoid of stress and conflict as possible.
1. Create Your Basic Budget
Everything centers around your basic budget. Calculate your total monthly income, including any ‘side hustles.’ If your income is inconsistent, take an average of the last three months. Add up all your non-discretionary spending, which are fixed bills like utilities, student loans, mortgage, and so forth. In a separate column, add up all your discretionary spending that you commonly choose to spend money on each month, such as karate lessons, personal care, and entertainment. Subtract both spending categories from your income. If the result is close to breaking even or negative, you know you must make adjustments for solvency and security.
Start by looking at discretionary spending you can cut or reduce; for example, you may cut entertainment nights by half. If necessary, you may have to look at ways to lessen your fixed bills, too – consolidation, downgrading your vehicle, couponing, etc.
2. Plan, Plan, And Plan
Planning ahead is key to staying on top of your budget. Think of it like you’re on the show “Survivor” and need to expect the unexpected to stay in the game.
For example, if your tires are getting up in age, start a proactive tire fund in your budget months before you actually need them. The funds will be available on-demand, and you’ll have more freedom to shop around beforehand to catch sales and the best deal.
Groceries are usually a big ticket item on most budgets. So, plan to save. Weekly meal planning helps eliminate splurge spending during main grocery days. It also reduces the number of mid-week trips for missing items that inevitably leads to you picking up extras along the way. Coordinate your meal planning with food to table options, sales, bulk buying for discounts, rebate apps like Ibotta, and so forth.
3. Think Cash Back Everywhere
Speaking of Ibotta, which is a rebate app for everything from groceries and entertainment to online shopping, are you taking advantage of ways that you can save money on purchases and maximize your spending rewards?
If not, check out Ebates, Groupon, Honey, and Swagbucks. Most retailers also offer discounts, coupons and reward programs via email lists or site-specific apps. The app for Starbucks, for example, earns you stars that you can redeem for free food and drinks.
In most cases, you can use multiple rebate apps, the in-store offerings, and manufacturer coupons simultaneously, which makes what you buy a fraction of the cost and sometimes even free. Add in a credit card reward system, and you may even be earning money on some purchases.
4. Money Management Is A Family Affair
For your budgeting and planning to truly be successful and rewarding, everyone in your family must have a role, insight, and stake in the family finances. For example, kids must understand that they’ll be without a phone next month if they go over budget by using more than their allotted share of the service this month.
Match allowances and rewards with household duties. Give kids a say by showing them that they have X amount in their budget and allowing them to decide what of their extracurricular activities they want to fit into that X. Just don’t forget to hold adults to the same standard in the financial game plan.
5. Have A Plan B For Unexpected Expenses
Even with the best planning and budgeting, you’re certain to occasionally encounter an expense that you haven’t been able to foresee or save for. You forgot about buying back to school supplies this month, you had an unknown leak that needs repairing and tripled your utilities this month, your child’s flu racked up unexpected doctor and pharmacy bills. Things happen, and you can always turn to easy payday loans online when expenses come up that you can’t cover immediately on your own. When used wisely, it’s can be a save-the-day financial option to have in your back pocket.
6. Set Financial Goals
Create a set of both short-term and long-term financial goals for your family. These include things like an emergency savings fund, remodeling budget, getting out of debt plan, vacation savings, retirement and college funds, kid’s graduation and prom costs, down payment needs.
You have your budget and see where each dollar goes. Prioritize what’s important to move your monthly budget further into the positive so that you’re both more financially secure and have room to start plugging in your financial goals.
In closing, don’t make your money management a one-size-fits-all task because it’s not. Simply use the above six budgeting tools to tailor your financial game plan to your unique assets, needs, lifestyle, and goals. The result will be less stress, less conflict, and better financial transparency within your family.