Get Saving: The Beginner’s Guide on How to Budget for Parents
June 13, 2019
Grilling, fishing, and spending time with the family are all activities that moms and dads get excited for on Father’s Day. Creating a budget? Maybe not. Unfortunately, only 41% of Americans are actively following a budget. This means they could be unprepared if an emergency or surprise cost comes their way. Through budgeting, they can stay on top of how much money they have, how much they need to pay for necessary expenses, and how much they need to save for other items they want.
This summer, plan for and monitor your family’s expenses with a budget. If you’re new to the budgeting world, don’t worry. Illinois Lending can help you and your little ones (or not so little ones) stay within your means with our beginner’s guide to budgeting.
1. Track all expenses and family income
When beginning to create a budget, it’s important to track and compare your entire family’s income and the amount of expenses being paid for each month. Although this can be tedious, it’s important to understand where your money has been going for the last few months. This task will help you in crafting future budgets because it shows you, in a typical month, the percentage of money you should be putting away for each type of expense.
2. Categorize core expenses
Once you’ve reviewed and gotten an understanding of your family’s spending habits, you should categorize and segment your expenses by type. The most common categories include:
- Utilities (gas, electric, water)
- Medical expenses
- Personal debt or loans
3. Set a realistic budget
When first starting, it’s easy to say that your family will follow a strict budget that allows for minimal spending on entertainment, unnecessary groceries, or other ‘wants.’ This does not set a realistic expectation for your budget. Things happen and there will likely never be a month where you follow it perfectly. Also, understand that each month is different. There will be more costs one month versus another. Plan out when those bigger expenses (routine doctor appointments, school trips) will happen to make room in your budget. The most important tip to keep in mind is to create a budget that is flexible and allows for some wiggle room.
4. Write grocery lists
When you’re at the grocery store, especially with the kids or when you’re hungry, it’s easy to purchase more than the items you actually needed. By always using a grocery list, you’ll be more efficient, you’ll stick to the list, and you won’t buy extra groceries because they looked good in the moment.
Other tips to tackling the grocery store? Shop generic brands to save money and avoid the ‘brand name tax.’ Also, try to cook from scratch when possible. Using raw ingredients, versus pre-made sauces or dressings, will save you a lot of money in the long run. Lastly, become a couponer! Spend a little time each week cutting coupons or perusing popular coupon sites to discover easy savings.
5. Get the kids involved
Children can, understandably, be against a budget. Having to tell them ‘no’ when they want a toy, game, or candy can be difficult. Introduce them to financial responsibility early! Instead of simply saying ‘no’, tell them they should remember what they wanted and to add it to a list. From there, they can prioritize their wants by what’s most important to them.
6. Utilize budgeting tools
Luckily, you don’t have to budget by hand. Try out helpful budgeting tools, like Mint, to track your expenses, income and budget with ease.