196 | How To Create A Budget That Works For Your Family And Actually Stick To It

That’s a loaded question. It’s not just as simple as “how do I create a budget?” We could just stop there, but you also want to know how to create a budget that works for your family. Then let’s add “and stick to it.” That’s a three-part complex question, but we’re here for it and we’re going to answer it today.

Budgets are not cookie-cutter. They are unique to your situation. This is why regular budget templates or specific systems might not work for everyone, but being able to tailor a budget to your family and stick to it is what makes it unique.

We’ll show you how to adapt it to your family and lifestyle so you can stick to it. The best way to do this is to use our Signature Budget System. It’s a template that we’ve created and it includes a paycheck plan, which divides your budget by the number of paychecks you receive and organizes everything for you. It provides a checklist of what to do on payday and includes many other systems.

We’re talking about this topic because it’s a frequent question we get, not just from our clients but also in our Facebook group. People often struggle with sticking to their budget, facing temptations, and unsure how to manage their finances long-term.

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The 90 Day Review

The first step we recommend is doing a 90-day review. This involves printing out three months of your bank statements, using highlighters to color-code different expenses, and understanding what you spend in each category. This helps you see the unique aspects of your family’s spending.

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Setting Up a Budget

A basic budget has five categories: income, debt, bills, spending (including gas, groceries, and restaurants), and savings. Savings should be organized, possibly in different accounts for specific purposes like Christmas, sports, or travel.

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Making the Budget Fit Your Family

1. Understand Your Family’s Unique Needs and Habits
   • Every family is different. Look at your specific needs, habits, and lifestyle. What are your regular expenses? Do you have children in sports or other activities? Understanding these unique aspects helps tailor the budget to your family’s reality.
2. Conduct a Comprehensive Review of Past Spending
   • Go beyond the 90-day review. Look at a year’s worth of expenses to account for seasonal variations and one-off expenses. This gives you a complete picture of your family’s spending patterns.
3. Incorporate Family Members into the Budgeting Process
   • Involve your partner and kids in budget discussions. Talk about upcoming expenses like birthdays, field trips, or other events that require planning. This inclusion makes everyone part of the financial decision-making and helps reduce “surprises.”
4. Set Family-Specific Financial Goals
   • Discuss and set goals that matter to your family. Whether it’s saving for a family vacation, preparing for future education expenses, or buying a new family car, having shared goals can guide your budgeting decisions.
5. Adjust for Life’s Seasons
   • Your budget should be flexible enough to adjust to different life stages—whether you’re dealing with the expenses of young children, planning for retirement, or adapting to a one-income household.
6. Create Category-Specific Budgets
   • Allocate specific amounts for different categories like groceries, entertainment, and personal expenses. Tailor these categories to reflect your family’s actual spending and lifestyle.
7. Plan for Irregular Expenses
   • Account for irregular expenses such as annual insurance payments, holiday spending, or emergency repairs. Saving a little every month for these expenses can prevent financial strain when they occur.
8. Regular Budget Meetings
   • Hold regular meetings to discuss the budget, track progress towards goals, and make adjustments as needed with your spouse. This keeps everyone informed and involved in the finances.
9. Teach Financial Literacy to Your Children
   • Use budgeting as an opportunity to teach your children about money management. Simple lessons on saving, spending, and budgeting can set them up for financial success in the future.
10. Embrace Flexibility and Adaptability
    • Be prepared to adjust your budget as your family’s needs and circumstances change. Flexibility is key to maintaining a budget that consistently works for your family.

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Adjusting to Different Income Patterns

Adjusting your family’s budget to accommodate different income patterns is crucial. This is especially important if your income is irregular, such as in cases where you receive commissions, bonuses, or are self-employed. For families with a steady paycheck, the budgeting process might seem straightforward. However, when you’re dealing with variable income, it’s all about planning and flexibility.

Start by understanding your baseline – the minimum amount you need to cover essential expenses each month. Then, treat additional income, like bonuses or commissions, as extra. This method helps in smoothing out the financial peaks and valleys that come with irregular income. For instance, if a large part of your income is bonus-based, use these bonuses strategically. Allocate them to big-ticket items or savings goals or big bills, rather than incorporating them into your regular monthly budget. This approach helps in managing the essentials with your regular income while using the bonuses for future planning and larger expenses.

It’s also important to adapt your budgeting technique to how frequently you receive income. Your budget and paycheck plan will be based on if you’re paid weekly, every other week or monthly.

Consider setting up our system where your paychecks go into the bills account, all bills come out automatically and your spending and savings amounts are transferred out automatically. Also, consider setting up separate accounts for different purposes.This way, you can allocate your income as soon as it arrives, making sure that all areas are covered. This is particularly effective for families with fluctuating income, as it provides a clear structure and prevents overspending in one area at the expense of another.

By adapting these strategies to your specific income pattern, you can create a budget that works flexibly with your earnings, ensuring that all your financial bases are covered, regardless of how and when your income arrives.

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Sticking to the Budget

1. Set Clear, Attainable Goals
   • Define what you’re aiming for with your budget. This could be paying off debt, saving for a vacation, or building an emergency fund. When your goals are clear and exciting, you’re more motivated to stick to your budget.
2. Review and Adjust Regularly
   • Regularly check in on your budget. Are you meeting your goals? Do you need to cut back more in certain areas or readjust your spending limits? This ongoing process keeps you engaged and accountable.
3. Use Visual Reminders
   • Keep your financial goals in sight. Post them on the fridge, set them as your phone wallpaper, or use budgeting apps with goal-tracking features. Visual reminders keep your objectives top of mind.
4. Automate Where Possible
   • Set up automatic transfers for savings and bill payments. Automation ensures you’re consistently meeting key parts of your budget without having to think about it every time.
5. Implement the Envelope System for Discretionary Spending
   • Allocate cash for categories like groceries, dining out, and entertainment. Once the cash in the envelope is gone, that’s it for the month. This physical limitation helps curb overspending.
6. Track Your Progress
   • Keep a record of your budgeting journey. Celebrate small wins, like staying under budget in a category. Tracking progress can be highly motivating and insightful.
7. Involve Your Family
   • Make budgeting a family affair. Discuss budget goals and limitations with everyone, including kids. This creates a sense of teamwork and mutual responsibility.
8. Reduce Temptations
   • Unsubscribe from marketing emails, avoid window shopping, and limit exposure to temptations that might encourage you to spend unnecessarily. You know what triggers you, so put up guardrails to avoid it.
9. Reward Yourself (Responsibly)
   • Set up small rewards for sticking to your budget. For example, if you’ve saved a certain amount, treat yourself to something small. This shouldn’t derail your overall goals but should offer a sense of achievement. We had a client who went to Starbucks every time she paid off a debt to reward herself!
10. Seek Support and Accountability
    • Join our budgeting group on Facebook, find a budget buddy, or work with us as your coach. Having someone to share your progress with or to hold you accountable can be incredibly effective.
11. Reflect on Your Spending Habits
    • Regularly take time to reflect on your spending. Understanding the ‘why’ behind your spending can help you make more conscious choices.
12. Educate Yourself
    • The more you know about personal finance and budgeting, the better equipped you are to make wise decisions. Listen to our podcast to enhance your financial literacy.

Creating a budget that fits your family’s unique lifestyle and sticking to it doesn’t have to be daunting. With the right approach, tools, and mindset, you can navigate the complexities of personal finance and build a budget that supports your family’s goals and dreams. Remember, the key to successful budgeting is adaptability, understanding your family’s needs, and regular communication. Our Signature Budget System is designed to help you do just that. It’s more than just managing numbers; it’s about creating a financially healthy and happy family life. So, start your journey towards financial clarity and empowerment today. For more support and resources, join our community at myidealbalance.com and tune into our podcast for more tips and inspiration. Together, let’s make budgeting a fulfilling part of your family’s story.

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We are excited to create the time & space to talk to you about your current money situation. This is a free, no-obligation call where we can answer questions you may have and maybe find some quick wins for your budget.

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