Keeping track of your family’s finances is a huge, time-consuming and complicated job. Not only do you have to (usually) keep track of multiple incomes, you have to keep track of multiple spenders, all spending from (often) a single familial account.
When your parents did this, it was relatively easy because, typically, there was only one checkbook. If the non-checkbook holder wanted to spend money, they had to use cash or ask for a check from the person who controlled the checkbook. Today there are cards, mobile payment options, etc. Spending is easier than it has ever been!
Luckily, as spending has gotten easier, so has tracking. Now you can set up budgeting apps to sync with bank and credit accounts automatically and across all of your family’s devices. Everybody can have access to the same real-time numbers. What’s more, mobile technology has made it easier than ever to check in with a spouse (or a parent) before making a purchase to ensure that nobody is accidentally spending funds earmarked for something else, like utility bills.
Of course, easy tracking does not necessarily mean easy managing. So how do you set up your family’s finances so that managing them doesn’t become your full time job?
- Sit Down and Make a Budget
The easiest way to do this right now is with simple pen and paper. Make a list of all of your bills and monthly expenses (be sure to include line items for savings accounts and discretionary spending and flexible spending items like clothing budgets, entertainment, etc). Compare that to what you have coming in. Hopefully you have more coming in than your budget says you should be sending out. If not, don’t panic! There are a lot of ways to adjust your budget and your income so that the two reconcile. You might have to get creative, but it can be done.
TIP: Get your kids involved. According to Creditrepair.com (and almost every other expert out there), the earlier kids start learning to make and follow budgets, the better. Let them sit at the table with you while you make your own budget. Encourage them to make one for their allowance or after school/weekend job earnings. This will benefit them now, in that they will see exactly how much money your family has (or doesn’t) and set them up for financial stability as adults.
- Get Some Good Apps
Many families start their expense tracking adventure with a simple excel spreadsheet. There is nothing wrong with this and if this is what feels the most comfortable for you, then go for it! The primary reason this is just a starting point, though, is that when you use excel, you have to input everything manually. More importantly, you have to remember to input everything manually. This means keeping track of your receipts until you have time to enter them, double checking to ensure you haven’t transposed numbers, etc.
There are a lot of great financial and budgeting apps out there now. Your bank probably has one. Mint’s app is incredibly popular. Spend some time playing around with them and choose the one that everybody feels the most comfortable using.
TIP: Look for an app that will allow you to scan in your receipts instead of forcing you to enter the numbers manually. This will save you tons of time and reduce the number of little slips of paper crowding your bags or wallets.
- Check In Regularly
This is where a lot of families fall short when it comes to financial management. Because the apps make it so easy to track and access account details, family members fail to actually talk to each other about their spending habits or where the money is actually going. It becomes very easy to slip into a “the app says there’s money there, that means I can buy stuff,” mindset.
Make a point of sitting down together as a family to check in with each other about what is being spent and earned. Actually go over your budget and what your family is spending where. Talk about the discretionary and flexible items. Are people spending foolishly? Can money be saved somewhere? Has the family vacation fund gotten large enough to actually spring for a trip out of town for a weekend? Talk about the good things and the bad. Brainstorm ideas for adjusting spending and savings plans. Talk about goals. This way everybody’s on the same page about not just where the money is going but why it is going to those places.
It takes time to get into a good rhythm for managing a family’s money, but don’t worry: if you keep trying, you’ll find your groove!
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