Quick Tips to Set Up a Family Budget
How to stretch your money without feeling the crunch
Start living on a budget that works for you and your family. Make healthy financial choices to eliminate debt, decrease costs, save money, and stretch a paycheck without constantly crunching numbers. Quickly evaluate your financial situation, and start saving with these easy tips to set up a family budget today.
Create a Budget
The first step to living on a budget is to track your family's income and expenses. Gather all of your bills, paycheck stubs, bank statements—everything you have that shows money coming in or going out. Write a frugal budget to manage your money.
When you wing it every month without a budget in mind, you're passing up opportunities to slash unnecessary costs and save money. A few minutes spent creating a budget now can save you big money later.
Set Financial Goals
Saving money seems like a long-term goal that's always out of reach when you're struggling from month to month just to pay the bills. Whether you want to save money for your child's college fund or you'd like to tuck money away for your retirement, setting financial goals is an important step in protecting your family's future.
Don't neglect your short-term goals either. Your financial goals can include quick reductions on utility bills, cable bills, and other expenses that are keeping you from saving more money each month.
Get Out of Debt
While being in debt can feel overwhelming, managing your debt is easy when you set realistic goals. A debt management plan can be built into your budget so you can pay off your credit cards and mortgage and eliminate your overall debt.
You might not be able to pay off all of your debt today, but you can create a realistic plan to work toward paying it off. Your budget will show you where your money is being squandered with high-interest charges and unnecessary expenses so you can then identify where your money truly needs to go.
Lower Your Taxes
Stop dreading the spring tax deadline every year. Simple tweaks can reduce your taxes and add money to your family's bottom line.
Choosing the right filing status, studying current tax rules on claiming dependents, claiming the Child Tax Credit, and taking advantage of child care and dependent care expenses are a few of the tax rules you should be aware of every year when it's time to file. You'll have a little more time for all this in 2021, because the IRS has pushed back the annual filing deadline to May 17 in response to the coronavirus pandemic.
The Child Tax Credit and the Child and Dependent Care Tax Credit have been beefed up for the 2021 tax year—the return you'll file in 2022—so you definitely won't want to overlook claiming these if you qualify.
People overspend on taxes every year. Make sure you're not being overly generous to Uncle Sam.
Plan for Financial Emergencies
The stress of a financial crisis can put a strain on the wealthiest families. Establishing an emergency fund helps you build up savings for unexpected expenses.
Life insurance and a last will and testament can also shield your family from financial hardship if something should happen to you or your spouse. The benefits and peace of mind of having them in place often outweigh the costs.
Control Spending on Food
Cut the costs of feeding your family with a well-planned food budget. Save money on groceries with a ready-made shopping list of your family's favorite recipes. You'll always know what you need and can spot a sale on your staples. This keeps your kitchen pantry stocked without having to pay full price.
Think outside the grocery store to find even more savings. "Kids eat free" deals at restaurants are also budget-friendly options that give you a break from the kitchen without draining your bank account.
Budget for Travel
Many families think a vacation is an automatic budget buster. Stretching your travel dollars can make your dream trip a reality, though. With a few extra steps, you can save money on your vacation to make a getaway a part of your budget.
If you discover that your budget just won't allow your family to travel, plan a staycation that keeps everyone close to home but still has room for day trips and fun activities to fit any budget.