Family Budget - Budgeting Made Simple

Family Budget – How To Maintain Harmony Within The Family

In my last post I was talking about how to get your family involved in planning the family budget. In this post I am going over how to set priorities within your family budget so that you can maintain peace and harmony.

Very often times, the family budget is a source of conflict. Most of the time, the major earner makes the final financial decision, which isn’t always a welcome deal for the rest of the family. Since money is such a big part of part of family life, families need to work together to reach their budgeting goals.

There is a four-step cycle in budgeting the family money to maintain peace and harmony and in this first part I am going to reveal the first 2 parts. Look out for my next post of the third and forth part.

Right, here is the first part and it is setting your priorities.

The definition of priority – A priority is something that is given or meriting attention before competing alternatives.

Simply put, the things that you feel are most important are prioritized and put at the top of the list when you are creating your budget.

Priorities are different from goals. They are aspects in your family’s life that you, as a family, want to set focus on, for instance health care, retirement or your children’s college fund.

When you start setting priorities do be careful not set too many, as it will defeat the purpose. Ideally, there should only be one, but because life is not ideal, 2 to 3 are reasonable.

As the priorities are set and agreed upon, write them down. Post the paper where everybody can see them to remind them of what your family is focused on for the next few years or until that goal is reached.

2. List down your goals.

Once the family has set and agreed on priorities, the next step is to set the goals. Goals are specific and measurable conditions that, when achieved, will support the priorities.

When setting goals, establish a target that is both challenging and achievable. For instance 10-15% of the family’s income is a good savings target for your child’s future education because it’s challenging yet reachable.

When you are setting your goals try to limit your family into setting1 or 2 goals for each priority, so that you can all maintain focus.

Look forward to my next post on steps 2 and 4.

Tags: family budget