Family Budget - Budgeting Made Simple

Family Budget – How To Maintain Harmony Within The Family (II)

Thus continuing from my first previous post on how to maintain harmony within the family. Let’s do a recap of the first two steps.

1- 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.

Now the step 3 and 4

3. Work towards your goals.

After setting your priorities and goals, start living by them. All of the family’s activities will be geared towards working to achieve your goals. Track progress, particularly on financial goals, by using an income and expense-tracking tool. The simplest way is to get a notebook and list down all expenses and incomes and set a budget for future spending or as we’ve discussed before use budgeting software. Whatever it is, the important thing is to have a system of monitoring the family’s performance towards achieving their goals.

4. Evaluate your family life.

At a certain point in time, when you feel like it’s time to evaluate your life, check how your family is doing against the goals. Goals that have been achieved can be checked off the list, and new ones can be formulated.

There will be times when major changes, say a career move, or when a family member moves away that it may be time to re-evaluate your families priorities. When such a time occurs, then the cycle will begin all over again.

Tags: family budgeting