How to create a family budget with kids
When it comes to the family bank account, we tend to go overboard during a couple of seasons.
There’s the holiday splurge, of course. But those summer vacations can put a dent in wallets, as well. To reduce debt, thus stress, your best defense is sticking to a budget.
To many, that thought is daunting.
But really, the best budgets are the most simple. Search “family budget” and look for expert sources from trustworthy publications like U.S. News and World Report, Today’s Parent, and even from financial institutions, like Bank of America. You’ll also find a whole lot of services online that will help you set up a budget, and many will even check your credit score.
To do it yourself, set up a spreadsheet, or go the old-fashioned route and take paper and pencil in hand. If your kids are 8 or older, Parents Magazine suggests they’re old enough to understand some basic budgeting.
Define steady costs:
Step one in creating a family budget is writing down the “steady” costs. In general, these include housing costs (mortgage, rent and insurance), along with health insurance, student loans and credit card debt. Remember that all experts will advise you to pay off that credit card debt as quickly as possible, so avoid paying just the minimum amount due.
Another steady cost might be the monthly cost of your cell phones. Hopefully, all of those in the family who are old enough to own a phone know how to avoid overage fees.
Predict fluctuating costs:
Next, add up utility costs, which fluctuate from month to month. If you can, look back on the previous year to get a ballpark figure. Another great place for a lesson for the kids: Water wasted, or heat or AC blasted, means a chunk out of the “fun money” part of the budget.
Another cost on the list of necessities is transportation. Here, you should be able to get close to a monthly cost, once you factor in the car payment, gasoline costs (or public transportation fees) and insurance.
Factor in the inevitable costs for things like health-care copayments and car or home repairs. If you have kids, add up costs like back-to-school shopping. Make sure to include other costs like personal care, gifts, pets, entertainment and home costs.
Take a smaller bite out of the budget:
One very necessary item that must be on that budget is food costs. Here’s where ShopAtHome.com comes in handy. The coupons and Cash Back savings on the site will add up. Write down a grocery list for the week, and go to the site to show kids how to save.
What kids – and adults – will learn from the budgeting process is this: If you can save a bit of money each week by cutting back on the costs that can be controlled – like water, power and food costs – there will be a bit more each month to save up for the fun stuff.
Like a summer vacation. How cool is that?
