Remember those carefree bachelor days, when your paycheck was your playground and all you had to worry about was yourself? For most people, the joys of family life far outweigh the loss of whatever personal freedoms you may have sacrificed since your early 20s. But being responsible for the financial planning for yourself and your dependents can be quite an obstacle to overcome. Here are just a few ways that solid, thoughtful family budget planning can smooth out your life now, and in the months and years to come.
- Immediate Money Concerns. The obvious short-term goal of any budget is to make sure that your income is enough to cover all your outgoing expenses. A budget can also give you a quick overview on the proportions of your spending categories (which can show you how to save money quickly), and how they stack up to recommended percentages. Housing should account for no more than a third of your budget, food can be as much as a fifth, and transportation can range anywhere from 10-20%. A comfortable savings margin is usually 10-15% of your total budget. The remaining 15% or so can be split up as your family needs.
- Getting Rid of Financial Stress. An ancillary benefit to keeping track of your family spending is the peace of mind you can gain by not constantly worrying about where your money is going. By budgeting out your expenses for the next three months, you can be confident in your financial situation, and know of any potential problems well in advance.
- Saving for the Future. Even with the most rigorously maintained budget and planning software, emergencies can crop up. Effective family budget planning should always include enough of a savings buffer for you to weather any storm. Most financial planners recommend that you aim to have enough in savings to completely cover three to six months of expenses with no income. They also recommend that you make your savings transfer the very first budget action of the month.
Do you have any family budget planning tips to share? Feel free to leave them in the comments below.