Managing The Family Budget Effectively

Nearly half of Americans spend more than they earn each month. Depending on your household income (which can depend on factors such as the number of earners, type of job but also where you live), living within your financial means can be a challenge. The biggest outlay for families in America is housing costs, which take up nearly a third of the monthly outgoings. We have looked at ways to address the impact of financial issues on a household. Taking certain steps to manage the budgeting is the most effective and rewarding way of staying ‘out of the red’ and enjoying your family life.

Consider consolidating your debt

Before assessing and addressing your outgoings, be sure to have a handle on what you owe and to whom. Keeping track of your back payments is vital and can be made easier if your debts are all in one account. It can also save you money with lower interest costs and have a positive impact on your own credit score, which can have huge implications for you and your family in the long term.

Plan trips to the store or shop online

Research shows you spend more on impromptu shopping trips than on planned ones. This is thanks largely to the shopper having no list and having to remember what they need. This makes it more likely that you will buy things with uncertainty and/or pick up something you just want at that time. Meanwhile, shopping online makes you more likely to stay within your budget because you can see your running total as you shop.

Plan and bulk cook meals

Food costs make up about 10% of monthly outgoings and, with the price of food going up along with wastage, it is even more important to keep a handle on it. Making economical meals doesn’t mean having to compromise on flavor or quality. You just need to be organized, price savvy, and open to different ingredients. When it comes to sauces, for example, make these from scratch rather than buying ready- made ones. Cooking in bulk will also save you money. Simply dish up the food into portions and freeze what you don’t need, ready for another day.

Use cash instead of cards

Cards are by far the most common method of payment these days, with only 14% of the American population using cash daily. This has had a significant impact on spending habits: people spend more. There is the convenience of not having to carry notes, as well as the fact that it is potentially quicker and more discrete. When you use cash, you can see how much you have spent by what is left in your wallet. In contrast, it is difficult to keep track of your outgoings when using cards for most transactions – particularly for a series of small to medium payments – making if far more likely that you will spend more (potentially more than you can afford).

Key pointers for living within your family budget

The idea of budgeting for your family accordingly may seem overwhelming at first, but it really is achievable. Write down your monthly earnings and overall debt, then list all the outgoings you can think of. Jot down the known costs of things (such as rent or mortgage and repayments) and then work out how much money you are left with. At this point, take on board the one percent rule: budget one percent of your monthly earnings on unexpected costs. From here, plan your family meals and days on which you will go to the store. Finally, be disciplined and optimistic: the rewards are worth it.